Read the full report here: https://www.auditor.ca.gov/reports/2023-102.1/index.html

SUMMARY

The Joint Legislative Audit Committee requested an audit of the State’s homelessness funding, including an evaluation of the efforts undertaken by the State and two cities to monitor the cost‑effectiveness of such spending. This report (2023‑102.1) focuses primarily on the State’s activities—in particular, the California Interagency Council on Homelessness (Cal ICH)—and a separate report (2023‑102.2) details our findings and conclusions about homelessness spending by the cities of San José and San Diego.

More than 180,000 Californians experienced homelessness in 2023—a 53 percent increase from 2013. To address this ongoing crisis, nine state agencies have collectively spent billions of dollars in state funding over the past five years, administering at least 30 programs dedicated to preventing and ending homelessness. Cal ICH is responsible for coordinating, developing, and evaluating the efforts of these nine agencies. In this audit, we reviewed the State’s efforts to track and evaluate the effectiveness of the homelessness programs that it funds, and we drew the following conclusions:

Cal ICH Has Not Consistently Tracked and Evaluated the State’s Efforts to End Homelessness

In February 2021, we reported that the lack of coordination among the State’s homelessness programs had hampered the effectiveness of the State’s efforts to end homelessness. ¹ Subsequently, the Legislature required Cal ICH to evaluate and report financial information related to all state‑funded homelessness programs. Cal ICH published this assessment in 2023, and it covered fiscal years 2018–19 through 2020–21; however, it has not continued to track and report on this information since that time. Further, it has not aligned its action plan for addressing homelessness with its statutory goals, nor has it ensured that it collects accurate, complete, and comparable financial and outcome information from homelessness programs. Until Cal ICH takes these critical steps, the State will lack up‑to‑date information that it can use to make data‑driven policy decisions on how to effectively reduce homelessness.

Two of the Five State‑Funded Programs We Reviewed Are Likely Cost‑Effective, but the State Lacks Outcome Data for the Remaining Three

When we selected five of the State’s homelessness programs to review, we found that two were likely cost‑effective: Homekey and the CalWORKs Housing Support Program (housing support program). Specifically, Homekey refurbishes existing buildings to provide housing units to individuals experiencing homelessness for hundreds of thousands of dollars less than the cost of newly built units. Similarly, the Housing Support Program’s provision of financial support to families who were at risk of or experiencing homelessness has cost the State less than it would have spent had these families remained or become homeless. However, we were unable to fully assess the other three programs we reviewed—the State Rental Assistance Program, the Encampment Resolution Funding Program, and the Homeless Housing, Assistance, and Prevention Grant Program—because the State has not collected sufficient data on the programs’ outcomes. In the absence of this information, the State cannot determine whether these programs represent the best use of its funds.

Agency Comments

Cal ICH agreed with our recommendations and identified actions it plans to take to implement them.

Although we did not make recommendations to the California Department of Social Services (CDSS), it indicated that it reviewed the draft report for factual inaccuracies and found none.

RECOMMENDATIONS

The following are the recommendations we made as a result of our audit. Descriptions of the findings and conclusions that led to these recommendations can be found in the sections of this report.

Legislature

To promote transparency, accountability, and effective decision‑making related to the State’s efforts to address homelessness, the Legislature should amend state law to require Cal ICH, by March 2025, to mandate reporting by state agencies of costs and outcomes of state homelessness programs. To implement such reporting, the Legislature should require Cal ICH to develop guidance establishing specifics on the uniformity of data to be collected and how it is to be presented. The Legislature should require Cal ICH to annually compile and report this cost and outcome information publicly beginning in September 2025 and should provide resources for this effort, as necessary.

Cal ICH

To ensure that its 2024 update to its action plan aligns with the statutory goals that the Legislature has established, Cal ICH should clearly identify in that update the statutory goal or goals that each of the action plan’s objectives addresses.

To promote transparency, accountability, and effective decision‑making related to the State’s efforts to address homelessness, Cal ICH should request that state agencies responsible for administering state‑funded homelessness programs provide spending‑ and outcome‑related information for people entering, experiencing, and exiting homelessness. By March 2025, Cal ICH should develop and publish on its website a scorecard—or similar instrument—on the homelessness programs that would enable the Legislature and other policymakers to better understand each program’s specific costs and outcomes. Cal ICH should determine and request from the Legislature any necessary resources required for this effort.

To ensure that the State has consistent, accurate, and comparable data for all state‑funded homelessness programs, by March 2025, Cal ICH should work with CoCs to implement standardized data requirements that programs must follow when entering information into HMIS. The requirements should establish expectations defining CoCs’ responsibilities for ensuring data accuracy and reliability.

OTHER AREAS WE REVIEWED

To address the audit objectives approved by the Joint Legislative Audit Committee (Audit Committee), we also reviewed housing placements and the sharing of homelessness data.

Most Placements of Unsheltered People Into Interim Housing Do Not End Up in Permanent Housing

The vast majority of housing placements for Californians experiencing unsheltered homelessness involve interim housing. The text box describes the types of interim and the types of permanent housing. Interim housing is a critical service that protects people from many of the impacts of unsheltered homelessness, including health and safety risks. Using information in the state data system, we identified placements of unsheltered people into housing from July 2019 through March 2023. As Figure 6 shows, 86 percent of placements statewide moved people into interim housing rather than permanent housing. Appendix B shows additional details about placements. The placement of individuals into interim housing likely occurs in part because of the lack of available permanent housing in the State.

Nonetheless, the final phase of homelessness—exiting homelessness—should ideally culminate with individuals living in permanent housing. People experiencing unsheltered homelessness who were placed into interim housing had worse outcomes when exiting the placement than those placed into permanent housing. Specifically, the data show that only 13 percent of the exits from interim housing placements reported individuals moving into permanent housing. In contrast, the data show that 84 percent of exits from permanent housing placements reported individuals moving into other permanent housing. ⁷ The data further show that 44 percent of the exits from interim housing reported individuals returning to homelessness, as opposed to 4 percent of exits from permanent housing placements.

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