The Trump administration on Thursday, Sept. 3, announced an investigation into what it called “waste, fraud and abuse” of federal funds allegedly linked to the troubled Los Angeles Homeless Services Authority (LAHSA) and called on Los Angeles Mayor Karen Bass to testify before Congress later this month.
In response, LAHSA officials welcomed the probe, saying that previous inquiries have found no corruption.
Rep. Tim Burchett, R-Tenn., chairman of the House Subcommittee on Delivering on Government Efficiency, summoned Bass to testify at a hearing titled “Fixing Fraud and Failure in Federally Funded Homelessness Services” on Sept. 15. In a letter, Burchett asked that Bass bring documents and communications related to “corrupt contracting and grant-making” by LAHSA, and be ready to discuss allegations of self-enrichment among nonprofits to whom LAHSA has awarded funds.
The DOGE subcommittee is investigating potential waste, fraud and abuse of federal grant funding intended to address homelessness in Los Angeles, according to the letter.
“Specifically, the Subcommittee is concerned about the potential misallocation of federal dollars by the Los Angeles Homeless Services Authority to nonprofits in Los Angeles and the surrounding area,” Burchett wrote. “Because Los Angeles officials have not adequately protected federal taxpayer dollars, it appears that many nonprofits to which those funds have been allocated are not using them for their intended purpose.”
Late Thursday, LAHSA responded to the DOGE allegations of misusing federal funds intended for homeless services in the following statement:
“LAHSA consistently welcomes audits and external assessments to continually improve its work, and none of these reviews have ever found evidence of fraud or corruption. Both internal and independent audits have recommended operational enhancements, and LAHSA has delivered demonstrable progress. This improvement is reflected in key performance indicators across vital system components, including interim housing occupancy and permanent housing utilization rates.”
To understand “the extent of the problem and the steps being taken to safeguard federal funds,” Burchett’s letter requested related documents and information from Bass’ office, and asked for her testimony at the hearing.
Bass had not responded to the request to testify by deadline on Thursday.
According to annual data from the U.S. Department of Housing and Urban Development, Burchett said, California has nearly 182,000 homeless people. Los Angeles County has 73,000 homeless people, and the city of Los Angeles has more than 45,000 homeless people, an increase of 3.4% from the year prior.
LAHSA has received over $1 billion in federal funds since 2021, including $220 million in 2024 alone. U.S. Department of Housing and Urban Development officials are investigating LAHSA’s use of federal funds stemming from allegations of fraud and widespread mismanagement.
In June, HUD abruptly suspended further federal funding to LAHSA until officials can show adequate safeguards are in place to protect taxpayer dollars. But last month, a Los Angeles federal judge blocked the decision, finding that the sudden loss of cash would jeopardize housing and services for more than 11,000 people across the region.
Also at stake is nearly $241 million already earmarked for the Los Angeles region by Congress, as well as immediate future funding for homelessness in the next fiscal year.
“This has great consequences for the Los Angeles region and impacts the region’s ability to compete with other cities across the country for limited homelessness funding nationwide,” Carter wrote in his order issued in Los Angeles federal court.
Los Angeles County Supervisor Kathryn Barger applauded Judge Carter’s ruling.
“Judge Carter’s ruling is fair, measured, and recognizes two realities that must be addressed simultaneously,” she said in a statement. “First, we cannot abruptly disrupt funding that people currently experiencing homelessness depend on to remain housed and connected to critical services. Second, meaningful reform of our region’s homeless services system cannot be delayed.”
The judge also stated that HUD has been “complicit” in the crisis facing LAHSA and has been on notice “of the very accusations it now brings against LAHSA concerning fraud and fiscal mismanagement. For decades, LAHSA and HUD have been in a joint partnership in failure,” according to Carter.
A hearing is set on the matter in Carter’s courtroom in Los Angeles on Sept. 22.
In his letter to Bass, Burchett wrote that homelessness “has grown worse” during her tenure as mayor.
“Yet, your administration continues to pursue policies that fail to address the mental health and drug abuse crises perpetuating the cycle of homelessness in Los Angeles,” he wrote. “The result is deteriorating public health, increased lawlessness and a bleak environment for small businesses.”
LAHSA is a joint powers authority formed in 1993 through an agreement between the city and county of Los Angeles. Half of the governing board of LAHSA is appointed by the mayor of Los Angeles and the Los Angeles City Council. The other half of LAHSA’s governing board is appointed by members of the L.A. County Board of Supervisors.
In the past year, Los Angeles County has removed its funding from LAHSA that would go to nonprofits delivering services on the streets of L.A. County. The L.A. County Board of Supervisors have shown that nonprofits were not paid on time, forcing some CEOs to pay their staff with their own personal credit cards.
More than a year ago, the Board voted to form its own department for managing and delivering homeless services. The county’s Homeless Services and Housing (HSH) Department has taken over the county’s portion of homeless services that was once left to LAHSA.
SCNG Staff Writer Steve Scauzillo and City News Service have contributed to this article.