WASHINGTON (WOWO): The U.S. Department of Housing and Urban Development has announced the immediate suspension of the Los Angeles Homeless Services Authority as the lead agency overseeing homelessness response efforts in Los Angeles, citing allegations of fraud, mismanagement and conflicts of interest.

According to HUD Secretary Scott Turner, the action follows the opening of an investigation by HUD’s Office of Inspector General into the agency’s handling of federal funds.

HUD officials said they uncovered evidence of repeated false statements, inadequate financial controls and failures to implement safeguards against conflicts of interest. The department said those issues raised concerns about the stewardship of taxpayer dollars and the agency’s ability to manage federal homelessness funding.

According to HUD, the Los Angeles Continuum of Care, led by LAHSA, has received nearly $1 billion in federal funding over the past five years.

Federal officials cited several findings from audits and reviews, including allegations that LAHSA could not verify occupancy records for some transitional housing units, failed to document thousands of housing sites, and lacked a formal conflict-of-interest policy until 2025 despite certifying compliance with federal requirements.

HUD also pointed to findings that a former LAHSA chief executive officer resigned after allegations involving more than $2 million in federal funding committed to an organization employing her husband.

The department said Los Angeles has continued to experience significant homelessness challenges despite increases in federal funding and housing resources over the past decade.

HUD officials indicated that additional administrative actions, including possible permanent debarment from federal programs, could be considered depending on the outcome of the inspector general’s investigation.

LAHSA has not publicly responded to the latest announcement. The investigation remains ongoing.