California failed to track how billions of dollars allocated for homelessness programs were spent: State audit report

(NEW YORK) — California failed to track the effectiveness of its billion-dollar spending on homelessness programs and “must do more to assess the cost-effectiveness of its homelessness programs,” according to a new state audit report.

Homelessness has been on the rise in California for the last decade, according to data from the U.S. Department of Housing and Urban Development (HUD).

In 2023, HUD recorded about 181,399 people who experienced homelessness on a given night in California. The state accounted for 28% of all people experiencing homelessness nationwide and 49% of all people experiencing unsheltered homelessness nationwide, HUD found.

According to the California State Auditor, nine state agencies managed by the California Interagency Council on Homelessness (Cal ICH) have collectively spent billions in state funds over the past five years to support at least 30 programs aimed at preventing and ending homelessness.

The audit reviewed five state-funded homelessness programs to assess their cost-effectiveness and found that at least two of the programs appear to be cost-effective: the Department of Housing and Community Development’s Homekey program and the California Department of Social Services’ CalWORKs Housing Support Program.

However, the effectiveness of these programs is unclear; the state audit found that some agencies lack data on the costs and outcomes of its homelessness programs in recent years “despite the significant amount of additional funding the State awarded to these efforts in the past two years.” In the report, the auditor argues that the council has not “aligned its action plan” to ensure accountability and results.

Having up-to-date information, the auditor states, allows the state agencies to “make data‑driven policy decisions on how to effectively reduce homelessness.”

“The State Auditor’s findings highlight the significant progress made in recent years to address homelessness at the state level, including the completion of a statewide assessment of homelessness programs,” Cal ICH said in a statement to ABC News. “But it also underscores a need to continue to hold local governments accountable, who are primarily responsible for implementing these programs and collecting data on outcomes that the state can use to evaluate program effectiveness.”

The statement continues: “The Council continues to improve its ability to ensure that taxpayer dollars are spent judiciously and effectively, including by providing technical support to local jurisdictions to help align data standards and reporting.”

The Homekey program turns hotels, motels, hostels, commercial properties and other facilities into permanent or temporary housing for the homeless, according to the California Department of Housing & Community Development.

The Housing Support Program offers financial assistance and housing-related supportive services to those in need, according to the California Department of Social Services.

Auditors were unable to assess the cost-effectiveness of several other programs because of the lack of data on the program outcomes. The report suggests that the legislature mandate data collection and public reporting of the costs and outcomes of their homelessness programs.

Democratic State Sen. Dave Cortese and Republican Sen. Josh Hoover, two of the lawmakers behind the request for the audit, say the audit was a “critical first step” in the state’s overall challenges with homelessness.

“This audit was a critical first step, but now the Legislature must take action to improve transparency and accountability,” said Hoover in an online statement.

Cortese acknowledged some of the positive data that came from the report in an online post, highlighting the audit’s note that people placed into permanent housing through these programs remained in stable housing.

The available data found that 84% of exits from permanent housing placements “reported individuals moving into other permanent housing,” the audit read.

However, the audit states that inconsistencies in the data collection of several housing programs “make the data unreliable.”

“Going forward, we will take a closer look at what we learned and how to improve transparency and outcome tracking in California’s cities,” Cortese said.