The Trump administration has moved to halt federal funding for the Los Angeles agency that oversees homelessness programs, citing allegations of fraud, financial mismanagement, and inadequate oversight.
According to documents reviewed by Fox News Digital, the U.S. Department of Housing and Urban Development (HUD) has suspended funding to the Los Angeles Homeless Services Authority (LAHSA) while the agency’s inspector general investigates potential wrongdoing involving LAHSA and its leadership. HUD is also part of the White House fraud task force chaired by Vice President JD Vance.
In a letter sent to LAHSA Board Chair Wendy Greuel and CEO Gita O’Neill, HUD outlined concerns including conflicts of interest, poor financial controls, fraud allegations, and failures in accountability. The agency has faced increasing scrutiny in recent years, with both city and county officials exploring ways to assume greater control over its operations.
“HUD cannot ignore LAHSA’s wanton mismanagement of public funds. HUD’s mission is to reduce the plague of homelessness in America,” the agency’s letter to LAHSA leadership on Thursday stated. “Turning over billions of dollars from American taxpayers to an organization under investigation and suspected of gross misuse of federal funding and ‘obvious fraud’ does nothing to reduce homelessness. Indeed, diverting dollars from worthy programs to LAHSA merely makes the homeless crisis worse.”
The decision places one of the nation’s largest homelessness service organizations under intensified federal examination. Critics have long argued that despite billions of dollars being directed toward homelessness initiatives in Los Angeles, conditions on the ground have shown limited improvement. HUD noted that LAHSA has received close to $1 billion in federal funding alone since 2021, in addition to support from local and state governments.
“Suspending LAHSA’s participation in federal government programs is a necessary step in accomplishing that critical mission in Los Angeles,” HUD wrote in the letter. “LAHSA’s failures have been so severe and pervasive that Los Angeles County has withdrawn its funding for the agency, and the City of Los Angeles is considering doing so as well.”
Concerns about the agency have surfaced repeatedly in recent years. Former LAHSA Executive Director Va Lecia Adams Kellum stepped down last year after findings showed she had participated in directing $2.1 million in federal funds managed by LAHSA to a nonprofit organization in Santa Monica that employed her husband.
HUD also referenced a federal court ruling from last year in which a judge determined that LAHSA had engaged in “obvious fraud” by continuing to seek funding for an 88-bed shelter despite allegedly knowing that the facility was operating at roughly half of its intended capacity.
Another issue highlighted by HUD involved nearly 2,300 housing locations that LAHSA reportedly could not verify. The department further stated that approximately 70% of contracts associated with those sites showed no reported expenditures during the previous year.
Independent audits have also raised concerns about LAHSA’s administration of homelessness programs. According to reporting from the Associated Press, auditors found recurring problems with late payments to service providers and inadequate recordkeeping that hindered contract monitoring. The audits also identified $5 million in cash advances distributed to five separate providers. HUD additionally cited a November 2024 review by the City Controller’s Office, which found that LAHSA left $513 million in budgeted public funds unspent during fiscal year 2024, attributing the shortfall to staffing shortages and outdated technology systems.
“Under President Trump’s leadership, HUD will fund results, not corrupt failure or the homeless industrial complex,” HUD Secretary Scott Turner said in a statement to Fox News Digital. “Year after year, hundreds of millions of taxpayer dollars were funneled to LAHSA with little accountability. Meanwhile, homelessness skyrocketed. Taxpayers will no longer bankroll an organization that puts its own self-interests ahead of the Americans it was created to serve.”
