L.A. Mayor ‘Has Grave Concerns’ Amid Allegations at Homeless Agency

The Trump administration suspended funding for a prominent Los Angeles homeless services agency due to what federal officials say are failures and a “clear pattern of fraud” in the nation’s capital for homelessness.

The U.S. Department of Housing and Urban Development (HUD) said the Los Angeles Homeless Services Authority (LAHSA) may have violated federal law and alleged irresponsible actions and failures, including a “lack of financial management, internal controls and safeguards against conflicts of interest.”

“HUD has determined it cannot reasonably rely on LAHSA’s ability to operationally and effectively coordinate, manage, distribute and monitor taxpayer dollars in a responsible manner,” an announcement letter read. “LAHSA’s repeated false statements, actions and inactions represent serious violations of multiple HUD regulations and programmatic requirements, and are highly irresponsible.

“Los Angeles is, and for years has been, the epicenter of the homelessness crisis in America,” the letter adds.

HUD said funding will be suspended immediately, pending an investigation, that could result in funding being restored or permanently stopped. LAHSA has received more than $1.16 billion in public funds over the last five years, according to HUD, and federal funding made up 8 percent of its annual budget this year, according to the L.A. Times.

LAHSA said it is working on the alleged mismanagement, and said HUD’s action could “put thousands of formerly homeless people back on the street.”

“This appears to be a blatant attempt to pull yet more resources from Los Angeles, a city they have targeted time and again, when it is clear that LAHSA has either corrected or is in the process of correcting nearly all of the issues raised,” the agency said in a statement sent to CO. “Local oversight actions have already resulted in strong repairs and reforms to LAHSA’s internal controls, which are accountable and viewable to the public.”

LAHSA added that it is implementing recommendations to modernize its financial systems and prevent similar findings from occurring again. 

“[HUD’s inspector general] will clearly see how our systems now allow us to clearly track the work and investments that have resulted in L.A. outperforming the nation by reducing homelessness over the last two years,” the statement continued. 

L.A. Mayor Karen Bass also has “grave concerns” about LAHSA’s alleged management, and has previously directed the city to evaluate how to move away from the agency.

“Threatening federal funds does nothing to house people and jeopardizes the progress Mayor Bass has led to reduce homelessness for two years in a row, after it only went up in Los Angeles for years,” Bass’s office said in a statement sent to CO. “Ultimately, people will lose their lives. We urge HUD to work with the City of Los Angeles to provide the necessary funding to reduce homelessness.”

Gregory Cornfield can be reached at gcornfield@commercialobserver.com.