The Trump administration has cut off funding to the Los Angeles Homeless Services Authority (LAHSA) amid an explosive fraud investigation. The Department of Housing and Urban Development (HUD) has suspended LAHSA’s federal funding while its inspector general investigates potential offenses by the agency and its leadership.

Fraud and Mismanagement Allegations

LAHSA has faced criticism for its handling of billions of dollars in homelessness spending, with allegations of conflicts of interest, financial mismanagement, and lack of oversight. The agency’s former top executive, Va Lecia Adams Kellum, resigned last year after it was found that she had directed $2.1 million in federal funds to her husband’s nonprofit employer.

A federal judge has also concluded that LAHSA committed “obvious fraud” by requesting funding for an 88-bed shelter that was operating at half-capacity. Public audits have found that LAHSA routinely paid service providers late and had poor record-keeping, making it difficult to track the effectiveness of its spending.

Consequences and Next Steps

The suspension of federal funding is a significant blow to LAHSA, which receives nearly $1 billion in federal funding annually. The move comes after Los Angeles city and county officials had already begun to distance themselves from the agency, with the city council exploring alternative contracting arrangements and the county redirecting hundreds of millions of dollars in funding to a new department.

Federal Trade Commission Chairman Andrew Ferguson praised the Trump administration’s actions, saying that it is “unconscionable” that Los Angeles has wasted billions of taxpayer dollars on homelessness programs that have failed to produce results.

Original reporting: Fox News (HLL/CB) — read the source article.