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Homelessness in California
State Government and the Los Angeles Homeless Services Authority Need to Strengthen Their Efforts to Address Homelessness

Report Number: 2017-112



Homelessness is an issue of concern to the United States generally and to California specifically. According to Opening Doors: Federal Strategic Plan to Prevent and End Homelessness (federal plan) issued in 2010 and updated in 2015 by the U.S. Interagency Council on Homelessness (federal homelessness council), more than 1 million Americans experience homelessness each year. The federal plan also states that for most of these people, homelessness is caused by the gap between income and the cost of housing. It adds that for many people living in poverty, the lack of stable housing leads to cycling through crisis‑driven systems, such as emergency rooms, psychiatric hospitals, detox centers, and jails. Homelessness therefore is costly not only to those who experience it firsthand but also to the entities that fund these crisis‑driven systems. The federal plan further mentions that stable housing is the foundation upon which people build their lives—without a safe, decent, affordable place to live, it is next to impossible to achieve good health, positive educational outcomes, or economic potential.

Key Definitions

Homeless: People who lack a fixed, regular, and adequate nighttime residence..

Sheltered homeless: People who are Key Definitionsstaying in emergency shelters, in housing programs that provide places to stay and supportive services for up to 24 months, or in “safe havens” that provide temporary shelters and services to hard-to-serve individuals.

Unsheltered homeless: People whose primary nighttime location is a public or private place not ordinarily used as a regular sleeping accommodation (for example, the streets, vehicles, abandoned buildings, parks, or camping grounds).

Sources: California State Auditor’s analysis of federal law and HUD’s 2017 homeless report.

According to a recent annual report issued by the U.S. Department of Housing and Urban Development (HUD), nearly 554,000 people were experiencing homelessness in the United States on a single night in January 2017.3 The report further states that the number of homeless people increased in 2017 for the first time in seven years, which HUD attributed to an increase in the number of those staying in unsheltered locations in major cities. As indicated in the text box, the unsheltered homeless include individuals whose primary nighttime location is not normally used as a sleeping accommodation. HUD also stated that half of all people experiencing homelessness did so in one of just five states: California, New York, Florida, Texas, or Washington. HUD’s report also points out that the largest absolute increase in the number of homeless between 2016 and 2017 occurred in California, where the homeless population increased by 16,136, or 14 percent.4 This increase was more than five times the increase of the next highest state—New York, with 3,151. According to the federal plan, homelessness is a problem that can be solved. Governments at the federal, state, and local levels are responding to the issue and have taken actions to address it.

The Federal Continuum of Care Program for Addressing Homelessness

At the federal level, HUD administers homeless assistance grants, including grants for the Continuum of Care (CoC) program. The purposes of the CoC program include promoting communitywide commitment to ending homelessness, providing funding for efforts by nonprofit providers and state and local governments to quickly rehouse homeless people, and optimizing self‑sufficiency among those experiencing homelessness. HUD has established CoC program requirements both for applying for and for administering grant funds as well as for the regulatory implementation of the CoC program and its responsibilities.

Federal regulations define a CoC as a group organized to carry out the CoC program’s responsibilities. Each group consists of representatives from organizations within a specified geographic area (CoC area), including nonprofit homeless service providers, victim service providers, faith‑based organizations, governments, businesses, advocates, and public housing agencies. For the purposes of its annual homeless report, HUD classifies CoC areas in three broad categories, as described in the text box.

Geographic Categories of CoC Areas

Major city CoC areas: 
Cover the 50 largest cities in the United States.

Balance-of-state or statewide CoC areas:

Typically composed of multiple rural counties or cover an entire state.

Smaller city, county, and regional CoC areas: Cover jurisdictions that are neither one of the 50 largest cities nor balance-of-state or statewide CoC areas.

Source: HUD’s 2017 annual homelessness report to Congress (2017 homeless report).

CoCs are responsible for coordinating implementation of a housing and service system within their geographic area. Each CoC must adopt and follow written procedures to establish a board (CoC board) to act on the CoC’s behalf. The CoCs are also required to designate and operate a Homeless Management Information System (HMIS) and develop and use a coordinated entry system (entry system), which we describe in the text box.

Requirements for CoCs

Federal law requires CoCs to establish and administer the following:

HMIS: A local information technology system used to collect client-level data and data on the provision of housing and services to homeless individuals and families and persons at risk of homelessness. Each CoC lead agency is responsible for selecting an HMIS software solution that complies with HUD’s data collection, management, and reporting standards.

Entry system: A process developed to ensure that all people experiencing a housing crisis have fair and equal access—and are quickly identified, assessed, referred, and connected—to housing and assistance based on their strengths and needs. Entry systems can include components such as regional coordination, housing navigation, outreach activities, case management, crisis and bridge housing, rapid rehousing, family solution centers, and prevention and diversion activities.

Sources: Federal regulations, HUD publications, and documents obtained from the Authority.

According to HUD, each CoC should designate a lead agency as part of its efforts to be effective. HUD advises that a lead agency with strong leadership, access to resources, and high visibility in the community can provide the CoC with the credibility necessary to attract broad‑based community participation. The lead agency can also be the collaborative applicant for CoC program funding. According to federal regulations, the collaborative applicant will collect and combine the required application information from all projects in the CoC area. The lead agency may also act as the lead for the CoC area’s HMIS, and must develop and administer the entry system for the CoC.

The State’s Response to Homelessness

Instead of having a single state department in charge of managing the State’s efforts to address homelessness, multiple state entities in California administer a variety of homeless services programs. As shown in Table 1, in fiscal years 2016–17 and 2017–18 six state entities administered at least 11 different programs that were funded in the State budget to provide direct assistance to homeless individuals and families. Entities including the Department of Housing and Community Development (HCD), the California Department of Social Services (CDSS), and the California Governor’s Office of Emergency Services administer programs for the homeless population. These programs provide services including housing, housing‑related supports, and outreach and advocacy services. We also identified other programs that address or likely address homelessness, but we did not include them in our table because the budget acts of 2016 and 2017 did not include discrete amounts for them or they only indirectly address homelessness. Entities administering these programs include the Department of Health Care Services, the California Department of Public Health (Public Health), and the California Department of Corrections and Rehabilitation.


Table 1
Several California Entities Administer Many Programs to Address Homelessness
(In Thousands)

  Budget ACT appropriation exampleS
for fiscal years
Administered By/
Program Name*
Program Purpose 2016–17 2017–18
No Place Like Home Program To finance permanent supportive housing for individuals or households that include individuals with a mental disorder who are homeless, chronically homeless, or at risk of chronic homelessness. $263,640 $262,000
California Emergency Solutions Grants Program To make grants to qualifying subrecipients throughout the State to implement activities that address the needs of homeless individuals and families and assist them to regain stability in permanent housing as quickly as possible. 35,000 None
Financial Assistance Program To provide funds to certain local governments and organizations for navigation centers for homeless individuals, and for permanent supportive and transitional housing to serve homeless and low-income individuals and families and those at risk of homelessness. None 28,000
Veterans Housing and Homeless Prevention Program To provide for the acquisition, construction, rehabilitation, and preservation of affordable multifamily supportive housing, affordable transitional housing, affordable rental housing, or related facilities for veterans and their families to allow veterans to access and maintain housing stability.  $75,000 $75,000
CalWORKs Housing Support Program To provide housing support, including financial assistance, and housing stabilization and relocation services to CalWORKs recipients who are experiencing homelessness or housing instability. $46,675 $46,675
Housing and Disability Income Advocacy Program To provide outreach, case management, advocacy services, and housing assistance to homeless Californians with disabilities. 43,461 43,461
Bringing Families Home Program To provide housing-related supports, including needs assessments, housing search services, and financial assistance, to eligible individuals and families experiencing homelessness. 9,694 None
School Supplies for Homeless Children Fund To provide school supplies and health-related products to homeless children. 530 530
California Department of Education
McKinney-Vento Homeless Children Education Program To facilitate the identification, enrollment, attendance, and success in school of homeless children and youth. $7,930 $9,711
Homeless Youth Assessment Fee Waiver Program To waive application fee for the high school certificate of proficiency exam for homeless children and youth. 25 21
California Governor’s Office of Emergency Services
Homeless Youth Emergency Service Pilot Projects To provide shelter and related services to homeless youth. $10,000 $10,000

Sources: California State Auditor’s review of the Legislative Analyst’s Office’s 2016 Overview of State Homelessness Programs, the budget acts of 2016 and 2017, other California and federal laws, and internet searches.

* Based on our review, this table presents a partial list of California programs intended to address various aspects of homelessness. These amounts are generally appropriations for local assistance and do not include amounts for state operations and other departments. These amounts are generally appropriations for local assistance, and do not include amounts for State operations and other departments. Our review identified other programs through which the State addresses or potentially addresses homelessness. However, we did not include them here because they directly serve the homeless, but the two budget acts we examined did not include discrete budget amounts for them; indirectly address homelessness by promoting the provision of affordable housing generally, whose beneficiaries could include populations in addition to homeless people; or provide benefits other than housing, including food assistance and health care, to populations that may include homeless people. Examples of these programs include Medi-Cal, Supplemental Security Income/State Supplementary Payment, Community Services Block Grant, Housing Opportunities for Persons with AIDS, and CalFresh.

HCD also administers the federal Emergency Solutions Grants program. The budget acts did not contain specific line item information for this program.

State law requires HCD, the California Housing Finance Agency, and the California Department of Veterans Affairs to work collaboratively pursuant to a memorandum of understanding to carry out the duties and functions associated with these programs.


Funding for California’s homelessness programs comes from a variety of sources and sometimes targets particular subpopulations within the homeless community. Some programs, such as the Homeless Children Education Program, are federally funded. Other programs, such as CDSS’s Housing and Disability Income Advocacy Program, which serves homeless Californians with disabilities, are funded by the State and require counties to provide matching funds.

In 2016 California passed a law requiring state agencies and departments that fund, implement, or administer housing or housing‑based services for homeless persons or those at risk of homelessness to adopt or revise guidelines and regulations to incorporate core components of the Housing First model of housing assistance.5 The same law required the Governor to create the Homeless Coordinating and Financing Council (state homeless council) by June 30, 2017. Aside from overseeing implementation of the adoption of Housing First core components, the state homeless council is responsible for identifying resources, benefits, and services that can be accessed to address homelessness in California, and for creating partnerships among federal, state, and local entities to develop specific strategies to reduce homelessness.

The Authority’s Structure

Sources: Bylaws for the Los Angeles CoC area and for the Authority, and the joint exercise of powers agreement between Los Angeles County and the city of Los Angeles.

Los Angeles County’s Response to Homelessness

At the local level in California, there are 43 CoC areas. The CoC for each area must design, operate, and follow a collaborative process for applying for HUD funding. The Los Angeles City and County CoC (Los Angeles CoC) area is composed of Los Angeles County, except the cities of Glendale, Long Beach, and Pasadena, each of which has its own CoC. The Los Angeles Homeless Services Authority (Authority) is the Los Angeles CoC’s lead agency. In December 1993, Los Angeles County and the city of Los Angeles entered into a joint exercise of powers agreement to create the Authority. The purpose of the Authority is to coordinate the operation of existing services to the homeless population that each entity formerly provided separately and to design, fund, and operate other homeless and related social services to assist those in the community. As the text box describes, a 10‑member commission governs the Authority. The Authority’s mission is to support, create, and sustain solutions to address homelessness in Los Angeles County by providing leadership, advocacy, planning, and management of program funding. According to the Authority, it partners with more than 100 nonprofit organizations that assist homeless persons to achieve independence and stability in permanent housing.

The bylaws for the Los Angeles CoC name the Authority as the collaborative applicant for submitting funding applications to HUD. Most service providers in the Los Angeles CoC apply for HUD CoC program funding by submitting applications to the Authority, the Housing Authority of the County of Los Angeles, or the Housing Authority of the City of Los Angeles. As the collaborative applicant, the Authority then submits a consolidated application for the Los Angeles CoC area to HUD for CoC program funding. Of the HUD CoC program amounts awarded to the Los Angeles CoC area for 2014 through 2016, the Authority received, on average, about 27 percent, while the Housing Authority of the County of Los Angeles and the Housing Authority of the city of Los Angeles received approximately 16 percent and 45 percent, respectively. Other entities within the Los Angeles CoC area, including housing authorities of cities other than Los Angeles and service providers, received the remaining 12 percent.

The Authority’s financial information shows that HUD, the city of Los Angeles, and Los Angeles County provide the majority of the Authority’s funding. The Authority also receives a minimal amount of funding from the State and other sources. As Figure 1 shows, the Authority’s funding has fluctuated over time.

Figure 1
The Authority's Revenue Has Fluctuated Over Time

A bar graph showing that the Authority’s revenue from Los Angeles County, City of Los Angeles, and HUD sources fluctuated from about $65 million in fiscal year 2009-2010 to almost $105 million in fiscal year 2016-2017.

Sources: California State Auditor’s analysis of financial information obtained from the Authority for the fiscal years shown.

Note: Because of their inconsistency, we do not include within the Authority’s funding displayed here annual amounts of state, local, or other funds, the totals of which ranged from a low of approximately $73,000 in fiscal year 2013–14 to a high of $1.2 million in fiscal year 2011–12.

* In fiscal year 2016–17 the Authority received funding increases from Los Angeles County and the city of Los Angeles for several purposes, including about $30 million to implement countywide strategies to address homelessness and for entry system programs.

HUD selects the projects and service providers that will receive its grant awards. The Authority, along with the Housing Authority of the city of Los Angeles and the Housing Authority of the County of Los Angeles, then reimburses the providers after they have rendered services. The city of Los Angeles and Los Angeles County also impose restrictions or priorities for the funds they contribute from their annual budgets. For example, the joint exercise of powers agreement states that city contributions shall be used only within the city while request for proposals (RFPs) can impose “priority consideration” for projects located within specific areas of the county. As shown in Figure 2, the Los Angeles CoC area is divided into eight geographic regions called service planning areas (service areas).

Figure 2
Eight Service Areas Cover the Los Angeles CoC Area

A map showing the boundaries of the eight service areas in Los Angeles County and the city of Los Angeles boundary.

Source: California State Auditor generated using geographic information system data.

Scope and Methodology

The Joint Legislative Audit Committee (Audit Committee) directed the State Auditor to audit the Authority’s administration of public funds. Table 2 lists the Audit Committee’s objectives and the methods we used to address them.

Table 2
Audit Objectives and the Methods Used to Address Them

1 Review and evaluate the laws, rules, and regulations significant to the audit objectives. Reviewed relevant laws, regulations, and other background materials applicable to the Authority and programs aimed at addressing homelessness.
2 Review and evaluate the Authority’s methods for processing applications for public funding during the most recent three fiscal years and do the following:
  • Interviewed relevant Authority staff.
  • Obtained and evaluated the Authority’s policies and procedures related to processing applications for public funding.
  • Reviewed and analyzed the list of applications and other relevant data obtained from the Authority. Also, reviewed the minutes of certain commission and committee meetings.
  • Reviewed and analyzed information related to 34 applications for funding for new projects that we selected.
  • Reviewed relevant documents related to 20 renewal projects for HUD’s CoC program that we selected, and five providers whose funding the Authority reallocated.
  • Reviewed and analyzed documents from the Authority’s website, and email blasts to the “Funding Opportunities” and “General Interest” distribution lists.
  • Reviewed and analyzed criteria for the evaluation of applications listed in three RFPs and compared the criteria to the instructions to reviewers and evaluation tools.
  • Summarized the results of the Authority’s application reviews by service area in Appendix A beginning on page 57.
a. Identify by program the number of applications the Authority received, reviewed, approved, denied, or deemed deficient. For those applications that were denied or deemed deficient, identify the reasons for denial or deficiency.
b. Determine the consistency of the review of applications for HUD’s CoC program and other similar programs across the eight service areas. If there is significant variation in the approval process between service areas, determine the cause.
c. Assess the Authority’s practices for communicating and publicizing its criteria for approving or denying applications. Determine whether the process is transparent.
3 Review the Authority’s methods for calculating and distributing public funding. Determine whether the Authority’s methods are consistent with relevant laws, regulations, and policies. For a selection of approved applications for public funding, determine whether the Authority’s distribution complied with the Authority’s methods for calculating and distributing public funds.
  • Interviewed staff and reviewed laws, regulations, policies, and other criteria to gain an understanding of the Authority’s methods for calculating and distributing public funding.
  • Obtained and examined the contracts and accounting data for a selection of 40 new projects to determine whether the contract requirements matched the grant requirements and applicant’s proposal, and to determine whether the Authority distributed funds according to the contracts.
  • We determined that the Authority’s distribution complied with its methods for calculating and distributing public funds.
4 Determine the total amount of public funding and CoC program funding the Authority distributed to the eight service areas. Analyze these amounts in relation to each service area’s per-capita homeless population or other relevant measurement. If there is significant variation in funding levels between service areas, determine the cause.
  • Interviewed relevant Authority staff.
  • Reviewed contracts, accounting records, and other relevant information.
  • Determined the total amount awarded related to applications for new projects by each service area for fiscal years 2014–15 through 2016–17.
  • Analyzed the amount of public funding each service area received for new projects in relation to its homeless population.
  • Summarized funding award amounts for new projects by service area in Appendix B beginning on page 61.
5 Research best practices for the administration of public funding for homeless services and determine whether the Authority should implement any alternative structures or processes.
  • Interviewed staff of the Authority, HUD, and HCD to obtain an understanding of best practices relevant to the administration of homeless services.
  • Researched best practices for the administration of public funding for homeless services from relevant agencies.
  • Reviewed HUD’s fiscal year 2016–17 CoC Notice of Funding Availability criteria.
  • Surveyed the lead agencies for California’s 43 CoC areas and analyzed the results.
6 Review and assess any other issues that are significant to the audit.
  • Reviewed and analyzed national homeless population information from HUD’s 2017 homeless report and 2017 point-in-time data.
  • Reviewed public agencies’ responses to homelessness.

Sources: California State Auditor’s analysis of the Audit Committee’s audit request number 2017-112, as well as information and documentation identified in the column Method.

Assessment of Data Reliability

In performing this audit, we obtained electronic data files extracted from the data sources listed in Table 3. The U.S. Government Accountability Office, whose standards we are statutorily required to follow, requires us to assess the sufficiency and appropriateness of the computer-processed information that we use to support our findings, conclusions, or recommendations. Table 3 describes the analyses we conducted using the data from these sources, our methods for testing, and the results of our assessments. Although these determinations may affect the precision of the numbers we present, there is sufficient evidence in total to support our audit findings, conclusions, and recommendations.

Table 3
Methods Used to Assess Data Reliability

Information System Purpose Methods and Results Conclusion

The Authority

MIP Fund Accounting reports (accounting reports) as of September 2017

To categorize and to calculate total expense and revenue transactions for the period July 1, 2014, through
June 30, 2017.
  • Performed data-set verification procedures and electronic testing of key data elements and we did not identify any issues.
  • To test the accuracy of the Authority’s accounting reports, we traced key data elements to supporting documentation for a selection of 29 revenue and expense transactions from July 1, 2014, through June 30, 2017, and found no errors.
  • To test the completeness of these accounting reports, we traced the total amounts of the expense and revenue transactions to the Authority’s fiscal years 2014–15 and 2015–16 audited financial statements and found the accounting reports to be complete. We were unable to trace the total amounts for fiscal year 2016–17 because the Authority had not published its audited financial statement for fiscal year 2016–17.

Undetermined reliability for the purpose of this audit.

Although this determination may affect the precision of the numbers we present, sufficient evidence exists in total to support our audit findings, conclusions, and recommendations.


Point-in-time homeless counts and housing inventory counts


  • To determine the number of sheltered and unsheltered homeless persons by CoC.
  • To determine the number of homeless shelter beds by CoC.
Did not perform accuracy and completeness testing of these data because HUD does not fall within our audit authority. To gain some assurance of the accuracy and completeness of these data, we performed data-set verification procedures and electronic testing of key data elements, and found no issues.

Undetermined reliability for the purpose of this audit.

Although this determination may affect the precision of the numbers we present, sufficient evidence exists in total to support our audit findings, conclusions, and recommendations.

The Authority

List of applications for RFPs

Fiscal years 2014–15 through 2016–17

  • To determine the number of applications the Authority received, reviewed, approved, denied, or deemed deficient.
  • To select applications for new projects to test the consistency of the Authority’s review.
  • To gain assurance of the completeness of the Authority’s list, we compared the list to the records of public meetings and worked with the Authority until we were satisfied that we had a complete set of data.
  • To gain assurance of the accuracy of the Authority’s list, we traced data for 23 fields to supporting documentation and found that nine of the 23 fields tested had two or more errors.

Not sufficiently reliable for the purpose of this audit.

Although this determination may affect the precision of the numbers we present, sufficient evidence exists in total to support our findings, conclusions, and recommendations.

The Authority

Grant Inventory Worksheet

Fiscal Year 2016–17

To select renewal projects for testing.
  • Performed key data‑set verification procedures and did not identify any significant issues.
  • To gain assurance of the completeness of the 2016 Grant Inventory Worksheet, we agreed certain information from the worksheet we acquired from the Authority to equivalent information in a worksheet that HUD provided to the Authority and to HUD’s summary sheet showing its 2016 CoC funding awards to California. We found the data to be complete.
Did not test the reliability of the data, but instead gained assurance that the population was complete.

Source: California State Auditor’s analysis of various documents, interviews, and data obtained from the Authority.


3 For its annual homeless report, HUD discloses the results of what it refers to as a point‑in‑time count of homeless individuals. According to HUD’s regulations, a point‑in‑time count is a count of sheltered and unsheltered homeless persons carried out on one night in the last 10 calendar days of January or at such other time as HUD requires. The numbers and percentages pertaining to homeless persons in our report are based on the California State Auditor’s (State Auditor) analyses of the results that HUD included in its annual homeless reports and on HUD’s point‑in‑time counts obtained from its website.
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4 We provide additional information regarding homelessness in California on our website. An interactive map shows conditions across the State, including the number of people who lack shelter and the amount of annual HUD funding awarded to various areas. Using HUD data, the map also shows changes in the size of the homeless population from 2007 to 2016.
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5 According to HUD, Housing First is a model for offering housing assistance without preconditions—such as sobriety or a minimum income threshold—or service participation requirements. Rapid placement and stabilization in permanent housing are its primary goals.
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