(The Center Square) – According to an audit, California is not sufficiently tracking homelessness program costs and outcomes. The state has not evaluated program’ success in addressing homelessness, and only two of the five of the state homelessness programs assessed are likely to be cost effective. The other three could not be assessed due to lack of data.
The audit was called for by Assemblyman Josh Hoover, R-Folsom, in conjunction with Assemblyman Evan Low, D-Silicon Valley, State Sen. Roger Niello, R-Fair Oaks, and State Sen. Dave Cortese, D-San Jose.
“Our current approach to homelessness is failing to get the results our communities need,” Hoover said in a statement. “What this audit clearly shows is that the state continues to prioritize spending taxpayer dollars over getting actual results.”
Homelessness in California increased 53% from 2013 to 2023, rising to more than 180,000 in the 2023 homelessness count. The state-funded Legislative Analyst’s office found the state government allocated $24 billion on homelessness in the last five fiscal years through the 2022-2023 fiscal year. Much of the state’s programs are administered and reviewed by the California Interagency Council on Homelessness, which was created in 2017.
“The State lacks current information on the ongoing costs and outcomes of its homelessness programs, because Cal ICH has not consistently tracked and evaluated the State’s efforts to prevent and end homelessness,” wrote California State Auditor Grant Parks. “Thus, it lacks assurance that the actions it takes will effectively enable it to achieve those goals.”
ICH, which the auditor says “agreed with our recommendations and identified actions it plans to take to implement them,” pointed to poor data input by local service providers and agencies that work together to provide local “Continuums of Care” as the culprit for the lack of reliable information.
The audit “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,” said ICH Executive Director Meghan Marshall in a statement to The Center Square.
The audit appears to in part agree with this assessment, finding, “The State and HUD provide funding through a variety of programs to CoCs and to the entities within CoCs, such as counties, cites, and nonprofits. Those entities are responsible for following the eligible uses and reporting requirements of the funding they receive.”
Auditors noted CoC inputs to the state data system “included more than 100 enrollment records with client names such as ‘Mickey Mouse,’ ‘Super Woman,’ or a name indicating it was a test client, such as ‘Test Participant,’” because “a CoC could enter similar records using any name.”
For programs that use the number of beneficiaries to receive funding, this could be a major issue for fraud by providers seeking to get funding by registering fictitious clients.
The audit found one shelter “reported nearly 1,100 people enrolled in fewer than 300 beds,” with ICH staff saying “enrollment records do not always show when individuals stopped receiving services,” thereby leading to a situation where “enrollment numbers … may be overstated.”
The audit was nonetheless able to assess two of the five state programs. Project Homekey was found to provide completed motel-to-homeless-housing conversions at a cost of $144,000 per unit, compared to typical construction costs of $380,000 to $570,000 per unit of “affordable” income-restricted housing. While the audit said this is “likely cost-effective,” the audit did not include daily operating costs.
Though Homekey operating costs at a statewide level are not available, one site’s estimated cost of $85 per unit per day leads to an annual per unit operating cost of $31,025, which means the state’s 14,040 Homekey units could cost approximately $436 million to operate each year.
With the state audit reporting figures that a homeless individual in Los Angeles County makes use of approximately $35,000 in crisis response services each year, Homekey appears to be cost-effective as a rapidly-secured housing source but potentially not as a services source.
Auditors also assessed the state’s Housing Support Program, which provides financial assistance to families at risk of or experiencing homelessness, and also found it “likely cost‑effective”. The 6,000 families on HSP received an average of $12,000 to $22,000 per year, with families being, at least, one parent and one child.
For the other three programs supposed to be assessed, which have received more than $9.4 billion in funding since 2020, the auditors did not have enough data to make any conclusion.
The state’s $4.8 billion COVID-19-era rental assistance program provided nearly $12,000 per household while it was active, but it did not track evictions or information on how many recipients have since avoided homelessness.
The state’s $4 billion Homeless Housing Assistance and Prevention Program had ⅓ of the individuals using its services fail to provide information on what happened when they left the program’s interim housing, leading the auditor to be unable to evaluate its effectiveness.
The state’s $1.2 billion Encampment Resolution Funding program, which transitions people from encampments into safe and stable housing, data was not routinely collected on the served homeless, with some grantees writing “data not collected” or just leaving information blank.
With the state facing a $73 billion deficit for the 2024-2025 fiscal year currently being budgeted for, the effectiveness of the state’s costly homelessness programs is likely to be an issue in the coming months as the state decides where spending must be cut.
