Summary

Results in Brief

California should do more to address homelessness. Currently, California has more people experiencing homelessness (the homeless population) than any other state in the nation, and it does a poor job of sheltering this vulnerable population. According to the U.S. Department of Housing and Urban Development’s (HUD) 2017 annual homelessness report to Congress (2017 homeless report), in January 2017 California had about 134,000 homeless individuals, which represented about 24 percent of the total homeless population in the nation.¹ California also has the highest rate of unsheltered homeless: more than two‑thirds of California’s homeless are living in vehicles, abandoned buildings, parks, or on the street. Furthermore, 82 percent of California’s unaccompanied homeless youth are unsheltered; in contrast, 38 percent of unaccompanied homeless youth in the rest of the nation are unsheltered.²

The lack of shelter for California’s homeless population can be expensive for communities and can have severe consequences for homeless people. Homelessness and lack of shelter for the homeless population can affect the surrounding communities financially and physically. For example, according to the administrative officer for the city of Los Angeles in a 2015 report, at least 15 agencies regularly engaged with the homeless population, with some departments incurring large costs. Additionally, the unsheltered homeless population has an increased risk of exposure to communicable diseases. For example, the homeless populations in four California counties were affected by the largest person‑to‑person hepatitis A outbreak in the United States since a vaccine for it became available in 1996. In contrast to California, the New York City and Boston Continuum of Care (CoC) areas shelter more than 95 percent of their homeless populations. Two reasons may explain why California’s unsheltered homeless population exceeds that of other entities .First, other entities have a single entity charged specifically with addressing homelessness. Furthermore, other entities invest significantly in administering and funding homeless services.

California’s relative position regarding its homeless population points to the need for a single entity to oversee an effective and efficient system to address homelessness. However, until recently, California lacked such an entity and had no single mechanism by which to coordinate the multitude of homeless programs that the State funds. In 2016 state law created the Homeless Coordinating and Financing Council (state homeless council). The state homeless council’s goals include aligning existing state homeless service programs to ensure that they quickly and successfully connect individuals and families experiencing homelessness to permanent housing without preconditions or barriers to entry, such as sobriety. Another goal of the state homeless council is to create partnerships among state agencies and departments, local government agencies, and participants in HUD’s CoC program to arrive at specific strategies to end homelessness. Although creating the state homeless council is a first step toward addressing California’s homelessness at a statewide level, it could face critical challenges to quickly establishing a coordinated response to homelessness and meeting its statutory goals because it has no permanent staff and no funding for such staff. Even though state law dictates that any structures the state homeless council establishes to assist in its efforts must work “within existing funding” and that the Department of Housing and Community Development must provide staff assistance, it will be difficult for the state homeless council to develop and implement a statewide plan to address homelessness without its own permanent staff resources.

To address homelessness at a local level, California currently has 43 CoC areas that cover the entire state. We surveyed the lead agencies for the CoC areas to obtain some perspective related to best practices of homeless services across the State. Lead agencies in each CoC area are responsible for planning the administration of homeless services. The CoC lead agencies indicated a need for additional resources and direction from the State. Specifically, lead agencies reported that they lacked funding, staff, and other resources to implement HUD‑recommended activities such as conducting annual counts of unsheltered homeless, raising funds from nonfederal sources, and coordinating with other homeless service agencies. Rural CoC lead agencies also reported difficulties in implementing HUD requirements related to developing a coordinated entry system (entry system) and administering their Homeless Management Information Systems (HMIS).

The state homeless council could address the absence of strong state leadership from a single state entity, which currently creates challenges for rural CoC areas. HUD encourages CoC areas to merge with one or more other CoC areas if they have struggled in the competition for HUD funding. A balance‑of‑state CoC area can consist of multiple rural counties. If the state homeless council facilitated discussions with existing CoC lead agencies about forming a balance‑of‑state CoC area, it could create opportunities to remove some of the administrative burdens from local entities. This could result in more resources to implement HUD‑recommended activities and improve services for California’s homeless population.

Los Angeles County has the largest homeless population in the State and the second largest in the nation. The Los Angeles Homeless Services Authority (Authority) as well as the housing authorities for Los Angeles County and the city of Los Angeles are responsible for distributing public funding for homeless services in eight service planning areas (service areas) throughout Los Angeles County. Of the HUD CoC program amounts awarded to the Los Angeles City and County CoC (Los Angeles CoC) area for 2014 through 2016, the Authority received, on average, 27 percent, while the Housing Authority of Los Angeles County and the Housing Authority of the city of Los Angeles received approximately 16 percent and 45 percent, respectively. Regarding the Authority’s distributions, we found significant funding variations between the eight service areas. During fiscal years 2014–15 through 2016–17, the Authority generally awarded the smallest amount of new project funding to service areas outside the city of Los Angeles.

However, we found that the Authority consistently used the same reasonable process to evaluate competitive applications for funding for new projects without regard to service area. Multiple reviewers from several departments within the Authority and one external reviewer evaluate various portions of funding applications, and score and rank them according to published criteria. The Authority then submits its recommendations for funding to its commission for approval.

Although the Authority consistently followed its evaluation process for all applications we reviewed, it could make some improvements to its process. To begin with, although the Authority hired a contractor in 2016 to update policies and procedures, it does not have current written procedures for much of its application evaluation process. For example, the procedures it provided us did not include the electronic application system the Authority implemented in 2014, nor the steps its staff started using in 2016 for creating tools used to evaluate an application (evaluation tools), including scoring rubrics and summary scoring sheets.

Additionally, we found that the Authority did not fully document certain aspects of its evaluation process. Specifically, it did not document its determination of whether an application passed or failed the first phase on 21 of the 26 applications we reviewed for fiscal years 2015–16 through 2016–17. It also did not include evidence of supervisory review on the evaluation tools, but instead completed the review process through email between staff members, management, and the director of finance. We also found that the Authority’s staff do not use its network hard drive consistently to store documents, which creates inefficiencies and decreases the transparency of the application evaluation process. The Authority has begun to address some of these issues. For example, after we brought our concerns to the attention of the Authority’s management, it began documenting meetings in which it discusses funding decisions. However, it should fully implement and formalize its improvements when it updates its policies and procedures to ensure that its efforts are efficient, effective, and transparent.
One factor contributing to the funding variations across service areas is that allocation decisions can be outside the control of the Authority. First, the Authority does not have final control over which service areas it awards public funding. For instance, two funding sources—the city of Los Angeles and Los Angeles County—impose rules on the funds they provide. The city and county each have restrictions based on geography: the city of Los Angeles funds must be used to fund services within the city, whereas the Authority is required to consider the needs of urban county areas when evaluating a project for county funding. Second, HUD’s evaluation criteria do not include service areas; it makes the final determination on who receives its awards based on the strength of individual applications.

In addition, some service areas appear to lack a sufficient number of service providers to apply for funding. The Authority has made attempts to offset some funding variations by reserving funds for underserved service areas and providing technical assistance to increase the pool of qualified service providers in these areas. For example, although the Authority cannot unilaterally reduce the amount of county funding to providers within the city boundaries, it sometimes gives preference for county funding to service areas outside those boundaries. The Authority has also revised its application process to improve the success of its applicants. It now evaluates whether providers meet minimum requirements to manage public funds before they apply for a competitive grant. This allows Authority staff to provide feedback that helps providers qualify to apply.

Despite these steps, we found that the Authority has not adequately used data to analyze the effects of its efforts. First, the Authority could not accurately determine how much money it distributed to each service area for our audit period. In addition, it lacked organized application evaluation data and struggled to provide us with a complete and accurate record of its evaluation results for fiscal years 2014–15 through 2016–17. The Authority’s limited data hinder its ability to identify and address funding variations across service areas. Specifically, the Authority has technical assistance programs to help increase the administrative capacity of its service providers, and if it aggregated and analyzed its application data, it could increase the efficiency of its technical assistance programs by proactively identifying the needs of and providing specialized assistance to service providers. In addition, it could more effectively identify and communicate its funding needs to funders. The Authority is beginning to improve its accounting system and is implementing a new contract management system. However, to have a complete picture of the homeless services in the Los Angeles CoC area, it should have complete and accurate data at each point of the funding process, including the application evaluation process. This should include the number of eligible providers, the reason providers do not apply for certain requests for proposals, which providers win funds and why, where they are located, and how programs are affecting homelessness. The Authority is the only entity that has access to all of this information and how it intersects.

Recommendations

Legislature

To better serve the needs of homeless Californians, and to provide statewide leadership to agencies at all levels for better coordination of efforts to address homelessness, the Legislature should enact legislation and include funding within the Budget Act of 2018 that will allow for the following actions:

The state homeless council to hire permanent staff, including the appointment of an executive director.
California’s CoCs to obtain the state funding necessary to better implement HUD‑recommended activities, including annually counting unsheltered homeless, improving efforts to raise nonfederal funding, and improving their coordination with other agencies; and to more fully meet HUD requirements, including implementation and administration of the HMIS and entry systems.

Furthermore, the Legislature should require the state homeless council to take the following actions:

By April 1, 2019, develop and implement a statewide strategic plan for addressing homelessness in California, including goals and objectives and timelines for achieving them, and metrics for measuring their achievement. Included among the goals and objectives should be the identification of additional funding sources that state and local agencies can use to better address California’s homelessness issues.
By January 1, 2019, implement steps to assist CoC lead agencies in better implementing HUD‑recommended activities, including conducting annual counts of the unsheltered homeless population, raising nonfederal funding, and coordinating with other agencies.
By January 1, 2019, implement steps to assist CoC lead agencies in better meeting HUD requirements, including implementation of the HMIS and entry systems. The state homeless council should include among its considerations the establishment of a balance‑of‑state CoC area to help alleviate the administrative burdens imposed on CoC lead agencies, especially in rural areas.

Selected Recommendations

The Authority

To ensure the consistency and transparency of its processes, the Authority should do the following:

Implement updated written policies and procedures by July 2018.
Update its written policies and procedures regularly to accurately reflect changes in its processes.

To ensure that its funding recommendations are effective, consistent, and transparent, by July 2018 the Authority should do the following:

Develop and implement a process to ensure that staff use evaluation tools as intended.
Develop and implement a process to document supervisory review of its application evaluation process, and of meetings in which it makes funding decisions.
Include these changes in its updated written policies and procedures.

To expand the number of service providers through targeted technical assistance, the Authority should do the following:

Develop and implement a process to track aggregate application evaluation data, including the common reasons for failed applications, among other information, by December 2018.
Continue its efforts to develop and implement technical assistance programs for service providers, and track and analyze the results of its assistance by April 2019.

Agency Comments

The Authority concurs with the recommendations we addressed to it and asserts that it has already begun implementing some of them.

Footnotes

¹ For its annual homeless report to Congress, 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. Therefore, HUD based the homeless population numbers in its 2017 homeless report on counts that occurred in January 2017. The numbers and percentages pertaining to homeless persons in our report are based on the California State Auditor’s analyses of the results that HUD included in its annual homeless reports and on HUD’s point‑in‑time counts obtained from its website.

Furthermore, HUD administers homeless assistance grants, including grants for the CoC program. A CoC is a group organized to carry out the CoC program’s responsibilities within a specified geographic area.
Go back to text

² 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.
Go back to text