Overview
- HUD suspended roughly $240 million in Continuum of Care funds to the Los Angeles Homeless Services Authority in June while opening an investigation into alleged long‑running mismanagement.
- LAHSA sued to block the suspension and argued in court that HUD failed to follow required procedures and relied on outdated audits when it moved to freeze the funds.
- Thursday's federal hearing before Judge David O. Carter heard prosecutors and HUD lawyers cite audits going back two decades and allegations that LAHSA failed to verify about 2,300 housing sites, made false certifications, and lacked basic financial controls.
- Regional providers warned that removing LAHSA from grant administration could disrupt payments to roughly 200 organizations and programs that house about 11,000 people, forcing many providers to apply directly to HUD.
- HUD’s inspector general continues to investigate and federal prosecutors have signaled possible debarment or criminal referrals, with a key Aug. 26 application deadline for Continuum funding adding immediate operational pressure.