The Los Angeles Homeless Services Authority (LAHSA) announced on Tuesday that it is terminating contracts with the nonprofit Home at Last Community Development Corp. after the organization informed LAHSA last month it would close two temporary homeless housing sites. The closure was reportedly prompted by disputes over delayed payments from LAHSA to Home at Last for its operations.

In its statement, LAHSA acknowledged recurring difficulties with late payments to nonprofit providers, a concern previously cited by the Trump administration as justification for suspending federal funding to the joint city-county agency. However, LAHSA maintained that it had provided Home at Last with sufficient funds to cover operations.

The agency also disclosed that the Internal Revenue Service (IRS) recently notified it of a seizure of cash from an address associated with Michael Young, one of Home at Last’s founders. The IRS indicated that the seized funds were subject to criminal forfeiture but that LAHSA might be able to claim the money. Young did not respond to requests for comment regarding the matter.

Shana Elson, an attorney representing Home at Last, attributed the nonprofit’s financial difficulties to LAHSA’s payment delays. She said that had LAHSA continued paying invoices or assured the nonprofit of forthcoming payments, the closure might have been averted, allowing Home at Last to continue providing services aligned with its mission.

According to the nonprofit’s 2024 tax filings, Michael Young worked full-time at Home at Last and received a salary exceeding $150,000.

The revelation about the IRS cash seizure arises amid increased scrutiny over the use of public funds in homelessness programs. Federal authorities have recently initiated multiple fraud investigations involving misuse of money intended for homeless services, including a case involving the director of another homeless housing nonprofit accused of using funds for personal expenses such as homes, vacations, and luxury vehicles.

Following Home at Last’s notice of closure, LAHSA said it moved to terminate the nonprofit’s contracts for cause, citing failure to perform contracted services. The termination is set to take effect on July 22.

LAHSA reported active efforts to rehouse most of the approximately 181 residents affected by the closures. “Our absolute priority throughout this transition was the safety, stability, and well-being of the unhoused residents living at these sites,” stated Gita O’Neill, LAHSA’s interim chief executive.