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MIAMI BEACH, Fla. — Local authorities have launched an investigation of the organizers of the World OutGames Miami over their decision to abruptly cancel almost all of its sporting events.

The Miami Herald reported the Miami Beach Police Department and the Miami-Dade County State Attorney’s Office on Friday announced they will investigate “the potential misappropriation of funds.”

“Due to the potential misappropriation of funds, the Miami Beach Police Department and the State Attorney’s Office have conferred and are jointly opening a fraud investigation,” said Melissa Berthier, a spokesperson for the city of Miami Beach, according to the Miami New Times.

OutGames organizers on Friday said in an email that “financial challenges” prompted them to cancel nearly all of the sporting events associated with the games that were scheduled to take place through June 4. The opening ceremony, which was scheduled to take place in Miami Beach on Saturday, and the closing ceremony were also cancelled.

The Miami Herald reported the city of Miami Beach spent $200,000 to sponsor the OutGames and waved permit fees associated with events. The newspaper also said Miami-Dade County agreed to reimburse $18,000 in expenses.

The Miami Herald reported Miami Beach officials in recent months grew increasingly concerned that game organizers were unable to meet their fundraising. It obtained a memo from City Manager Jimmy Morales on Thursday that said OutGames officials had not paid a $5,000 deposit for event permits and they owe the National Hotel, which is the games’ official hotel, a “substantial amount of money.”

The Gay and Lesbian International Sport Association in a statement said it “had received repeated assurances that all events would proceed as planned.”

“The OutGames model is built upon the three pillars of sport, culture and human rights,” it notes. “Under the license agreement entered into with World OutGames Miami 2017 (the host city organization in Miami), they had sole and full responsibility for all planning and execution related to delivery of the event.”

Local LGBT sport groups, businesses rallying behind athletes

Thousands of athletes from around the world were expected to participate in the OutGames. Organizers announced their decision to cancel most of the sporting events as hundreds of them were traveling to Miami Beach.

Miami-Dade Gay and Lesbian Chamber of Commerce President Steve Adkins told the Miami Herald that his organization feels “terrible that this is happening.” He also noted local businesses and other members of Miami Beach’s LGBT community are “trying to do everything we can to create activities and entertainment options for all the wonderful visitors who have come to Miami and Miami Beach.”

Local LGBT sport groups are working to secure venues that would allow some of the cancelled sporting events to take place.

OutGames participants on Friday received free admission to the Miami Gay Men’s Chorus’ performance at the Colony Theater. The nearby Hotel Gaythering has offered them free drinks, sauna access and transportation to Haulover Nude Beach through June 4.

“We are deeply sorry the World OutGames Miami let you down,” wrote the Hotel Gaythering in a message to OutGames participants that it posted to its Facebook page. “Please know that our place is yours.”

The first World OutGames took place in Montreal in 2006.

D.C. is among the three finalists to host the Gay Games XI in 2022.

The Federation of Gay Games organizes the Gay Games. The Gay and Lesbian International Sport Association licenses the World OutGames.