California hasn’t been tracking homeless programs’ effectiveness, audit finds

SACRAMENTO, Calif. - California spent $24 billion to tackle homelessness over a five-year period but didn’t consistently track the outcomes or effectiveness of its programs, according to state audit released Tuesday.

The report attempts to assess how effective the state and local cities have been spending billions of dollars to address the ongoing homelessness crisis in California.

An estimated 171,000 people are homeless in California, which amounts to roughly 30% of all of the homeless people in the U.S. Despite the roughly $24 billion spent on homeless and housing programs during the 2018-2023 fiscal years, the problem didn’t improve in many cities.

It all started when State Senator Dave Cortese visited one of the largest homeless encampments in San Jose. He said he began asking the city whether the money spent on housing programs was cost-effective.

When he found insufficient data collected at the city-level, he and other state leaders penned a letter asking the Joint Legislative Audit Committee to look into it. The letter included Assemblymembers Evan Low and Josh Hoover, as well as, Senators Rosilicie Ochoa Bogh and Roger Niello.

"Up until last year, midway through 2023, there was no centralization of data around the flow of dollars from the state to local jurisdictions," said Cortese.

Among other things, the report found that the California Interagency Council on Homelessness, which is responsible for coordinating agencies and allocating resources for homelessness programs, stopped tracking spending on programs and their outcomes in 2021 despite the continuous funding from the state. It also failed to develop a collect and evaluate outcome data of these programs due to the lack of a consistent method.

The audit said the Council "has not established a consistent method for gathering information on homelessness programs’ costs and outcomes, leaving the state without information that would allow decision-makers to make data-driven decisions."

A spokesperson from the Council wrote in an emailed statement: "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. 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 went on to say, "The council continues to improve its ability to ensure that taxpayer dollars are spent judiciously and effectively."

With makeshift tents lining streets and disrupting businesses in communities across the state, homelessness has become one of the most frustrating issues in California.

The report notes that some data regarding the number of program participants and bed inventory in the state system might not be accurate or reliable.

The council, which lawmakers created to help the state deal with its homelessness problem, also has only reported on homelessness spending once since its creation in 2017, according to the report.

Without reliable and recent data on its spending, "the state will continue to lack complete and timely information about the ongoing costs and associated outcomes of its homelessness programs," the audit contends.

California funds more than 30 programs to tackle homelessness. The audit assesses five initiatives and finds only two of them — the efforts to turn hotel and motel rooms into housing and housing-related support program — are "likely cost-effective." The remaining programs, which received collectively $9.4 billion since 2020, did not have enough data to be fully assessed, the report says.

The state auditor also reviewed homelessness spending in two major cities, San Jose and San Diego, and found both failed to effectively track revenues and spending due to the lack of spending plans.

"I think what the report is clear on is we need an all above reproach, we need low rungs on the ladder, basic dignified shelter as well as the long term solution which is building more affordable housing. we need a comprehensive framework for data and performance measurement," said San Jose Mayor Matt Mahan.

"This audit will establish somewhat of a blueprint for legislative direction and guardrails going forward, to improve upon some of these areas, these deficiencies and systemic issues that this audit calls out," said Cortese.

Cortese also said auditors tell him there is no evidence of fraud, and he doesn’t think the state should stop sending funding, but instead, focus on record keeping and transparency, so the money can be allocated in a way that makes the best impact.

Associated Press contributed to this report.