The Trump administration cut off federal dollars to the Los Angeles Homeless Services Authority on Thursday after a 2024 audit showed the agency could not account for nearly $37 million in taxpayer money, roughly 73 percent of the funds it received.
The White House fraud task force, led by the office of Vice President JD Vance, announced the suspension as part of a broader crackdown on what it called "fraud and corruption" in government-funded programs. The Department of Housing and Urban Development worked alongside the task force and issued a suspension letter the same day.
The numbers are blunt. Out of $50.79 million handed to LAHSA, the agency could account for $13.78 million. The remaining $37 million, just over, was unaccounted for. HUD told the New York Post that the case reflects an "astonishing pattern of failures" by LAHSA.
The 2024 audit did not materialize out of thin air. It grew from a yearslong legal fight launched in 2020 by the LA Alliance for Human Rights, a coalition of homeowners, businesses, and homeless individuals who filed suit to find out where the money was going. U.S. District Judge David O. Carter eventually ordered a broader review covering $2.3 billion in homeless spending across Los Angeles.
That review produced the audit figures that the White House fraud task force seized upon. The $50 million examined was only a slice of the total. And the missing funds were spread across multiple nonprofits that received advances from LAHSA and never returned them.
The organizations with the largest unrecovered advances, as identified in the audit: People Assisting the Homeless (PATH) at $8.23 million, LA Family Housing at $4.5 million, Volunteers of America Los Angeles at $3.42 million, and Venice-based St. Joseph Center at about $2.5 million.
The federal suspension letter issued Thursday singled out Va Lecia Adams Kellum, the former CEO of LAHSA who oversaw the agency during the period in question. Federal officials allege that LAHSA, under Adams Kellum's leadership, approved more than $2.1 million in federal funding for a nonprofit that employed her husband in a senior role, without obtaining a required conflict-of-interest waiver.
Adams Kellum, who previously ran St. Joseph Center before taking the top job at LAHSA, earned just under $500,000 per year. She resigned last year after the federal government began asking questions about her dealings involving her husband.
The suspension letter named both Adams Kellum and the nonprofit connected to her husband. Neither Adams Kellum's husband nor the specific nonprofit was identified by name in the Post's reporting.
This pattern, a well-compensated executive presiding over an agency that cannot track its own money, while potential conflicts of interest go undisclosed, is exactly the kind of institutional failure that erodes public trust in government spending. It is also the kind of failure that puts political leaders on the defensive when the facts finally surface.
HUD Secretary Scott Turner did not hold back about what the audit revealed. In a statement, Turner said:
"LAHSA's record of fraud, failure, and flagrant mismanagement has abused hundreds of millions of tax dollars per year."
Turner's characterization went beyond the specific $37 million gap. His reference to "hundreds of millions" per year points to a broader pattern of waste that the administration believes extends well past the audit's narrow scope.
The Post also asked the Department of Justice whether the findings in HUD's suspension letter had triggered criminal investigations. A DOJ spokesman responded with the standard non-answer: "Per DOJ policy, we can neither confirm nor deny the existence of investigations."
That formula is familiar. But the DOJ has already shown willingness to act in this space. Prosecutors previously filed criminal charges against Alexander Soofer, a Westwood businessman accused of stealing more than $23 million intended for homelessness programs. The Soofer case is a reminder that LA's homelessness spending has attracted not just bureaucratic negligence but alleged outright theft.
The funding suspension put Los Angeles city officials in an awkward position. They had to defend the city's interests without defending LAHSA's record, a record they themselves have criticized.
A spokesperson for Nithya Raman, who chairs the Los Angeles City Council's Homelessness and Housing Committee, issued a statement that tried to thread that needle:
"This action directly threatens the housing stability of Angelenos who are housed right now because of this funding, with no plan to ensure they don't end up back on our streets."
The same spokesperson also said:
"This is exactly what I have been concerned about, and why I have pushed for years for the City to build the capacity to manage our own contracts, programs and dollars."
Raman, a mayoral candidate, chairs the committee that reviews homelessness contracts, funding allocations, performance reports, and policy recommendations before they advance through City Hall. If she has pushed for years to build the city's capacity to manage its own programs, the question is why that capacity was never built, and why LAHSA continued to receive and distribute funds it could not track.
The Trump White House has moved aggressively on multiple policy fronts, and the LAHSA suspension fits a pattern of using executive action to force accountability where local leadership has failed to deliver it.
Mayor Karen Bass's office responded with a statement that acknowledged LAHSA's problems while objecting to the federal remedy. A spokesperson said Bass "has grave concerns about LAHSA and zero tolerance for mismanagement and negligence, which is why she previously directed the City to evaluate how to move away from the agency."
But the spokesperson went further, warning about consequences:
"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. 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."
The argument amounts to this: we know the money was mismanaged, but please keep sending it anyway. Bass's spokesperson claimed the mayor led progress in reducing homelessness for two consecutive years. Whether that progress was achieved despite LAHSA's failures or because of spending that cannot be accounted for is a question the mayor's office did not address.
The broader political dynamic is familiar. When federal money flows to local agencies with minimal oversight, the locals take credit for any progress and blame Washington when the spigot closes. The ongoing clashes between Democrats and the Trump administration over federal spending priorities make this fight about more than one agency in one city.
The $37 million gap at LAHSA is a fraction of the larger picture. Judge Carter's court-ordered review covered $2.3 billion in homeless spending across Los Angeles, a staggering sum that dwarfs the budgets of many American cities. The audit that prompted the federal suspension examined only $50.79 million of that total.
If the rate of unaccounted funds holds across the broader spending pool, the potential waste runs into the hundreds of millions. That is speculative, but the audit's findings give it plausibility. And the Soofer prosecution, more than $23 million allegedly stolen from homelessness programs, suggests the problem extends beyond one agency's bookkeeping.
Los Angeles has spent years pouring money into homelessness programs while the crisis on its streets grew worse. The city's own leaders now acknowledge that LAHSA, the agency at the center of that spending, cannot be trusted to manage the funds. The question is why it took a federal task force to act on what a 2020 lawsuit and a 2024 audit had already made plain.
The administration's willingness to force disclosure and accountability where institutions have resisted it is a recurring theme. In this case, the disclosure came in the form of an audit that local officials had years to act on and did not.
Several questions hang over this story. The DOJ will not say whether the suspension letter's findings have led to criminal investigations beyond the Soofer case. The identity of Adams Kellum's husband and the nonprofit he worked for remain publicly unspecified. The exact federal programs affected by the funding halt have not been detailed.
And the biggest question: where did the $37 million go? The audit established that LAHSA could not account for it. That does not necessarily mean it was stolen. It may have been spent on legitimate services with records so poor that no one can verify it. But in government, the inability to account for public money is itself a failure, and when the sums reach eight figures, it demands more than a shrug and a promise to do better.
Local officials want HUD to keep the funding flowing while they sort out the mess. But the Trump administration's position is clear: agencies that cannot track tens of millions in taxpayer dollars do not get to keep receiving them. That is not a radical position. It is basic stewardship.
Billions spent, tens of millions missing, a CEO who resigned under a cloud, and a city that wants Washington to keep writing checks anyway. If Los Angeles wants to know why the federal government lost patience, the answer is in its own audit.
