Summary

Audit Highlights . . .

Our audit of efforts to address homelessness in California by the State and Continuum of Care (CoC) agencies highlighted the following:

» The State’s approach to addressing homelessness is disjointed— at least nine state agencies administer and oversee 41 different programs that fund homeless services.
» Although established in 2017, the homeless council has yet to set priorities or a timeline for achieving its 18 statutory goals.

It cannot coordinate existing state and federal funding because it lacks expenditure data from state agencies.
Its planned statewide data system will lack information about some service providers.
It is not required to develop guidance or disseminate best practices to CoCs and does not have a mechanism to enforce them.

» The five CoCs we reviewed do not consistently employ best practices to improve homeless services in their areas.

None fully understand the homelessness needs and available services in their areas due to insufficient annual gaps analyses.
Some do not use a mobile application, which can make counting homeless individuals more reliable and efficient.
Some can improve how they prioritize the projects to receive federal funding.

Results in Brief

In recent years, the number of individuals experiencing homelessness in California has soared. More than 151,000 Californians were homeless in 2019, an increase of 15 percent from 2017, and the economic impact of the recent COVID‑19 pandemic is likely to further exacerbate this crisis. Both the federal government and the State have dedicated significant resources to addressing the growing problem of homelessness. Specifically, in 1993 the federal government established the Continuum of Care (CoC) system, which combats homelessness at the local level. A CoC is a group of organizations, such as homeless service providers, cities, counties, and other stakeholders, that receives funding from the U.S. Department of Housing and Urban Development (HUD) to carry out the goal of ending homelessness within a specified geographic area. Each CoC must designate an organization as its collaborative applicant to apply for funding from HUD for the CoC. In 2019 HUD awarded more than $441 million to the 44 CoCs that plan and coordinate funding for services and housing to address homelessness in California’s 58 counties. In addition, the State has provided more than $4 billion in each of the last three fiscal years to local entities to address aspects of homelessness.

Nonetheless, California continues to have the largest homeless population in the nation, likely in part because its approach to addressing homelessness has been disjointed. Unlike in some other states, no single state entity in California oversees efforts to address homelessness or is responsible for developing a statewide strategic plan. Instead, at least nine state agencies administer and oversee 41 different programs that provide funding for purposes related to homelessness. In 2017 the State established the Homeless Coordinating and Financing Council (homeless council)—which includes representatives of state agencies, advocacy groups for the homeless, and other stakeholders. The statute that created the homeless council assigned it 18 goals, including coordinating existing funding, creating a statewide data system, and establishing partnerships with stakeholders to develop strategies to end homelessness. However, homeless council staff stated that the council has not set priorities or timelines for achieving all 18 statutory goals. Further, the homeless council still has not finalized an action plan that homeless council staff believe will serve as the council’s strategic plan.

The homeless council has yet to fulfill some of its most critical goals. For example, it is charged with coordinating existing state and federal funding and any related applications for competitive funding. However, homeless council staff stated that although it has established coordination channels with some state agencies and can request information from them, it does not currently have the authority to require this information from other state agencies and has not been able to track program spending to date. In addition, homeless council staff explained that it needs additional statutory authority to collect expenditure data from other state agencies that could be useful in streamlining its collection of this information. As a result, the State continues to lack a comprehensive understanding of its spending to address homelessness. The homeless council has taken steps toward another goal: establishing a statewide data system that will collect information such as the number and characteristics of people receiving assistance from homelessness programs and the types of services they receive. However, because the new system will obtain its data from each CoC’s database, known as the Homeless Management Information System (HMIS), it may lack information on service providers that do not receive CoC Program funding. A clear understanding of all state and federal funding related to homelessness programs, and the specific services the programs provide, is critical to make effective policy and program decisions at the state level.

Further, although the homeless council is well positioned to provide guidance to CoCs, state law lacks a definite requirement to develop guidance or disseminate best practices to CoCs or a mechanism to enforce them. Because HUD’s guidance allows for extraordinary discretion in how CoCs implement the suggested practices and CoCs do not always employ best practices, the State has an opportunity to help CoCs improve their efforts to combat homelessness within their areas. For this audit, we reviewed five CoCs: Fresno City and County/Madera County CoC (Fresno‑Madera CoC), Mendocino County Homeless Services CoC (Mendocino CoC), County of Riverside CoC (Riverside CoC), Santa Maria/Santa Barbara County CoC (Santa Barbara CoC), and San José/Santa Clara City and County CoC (Santa Clara CoC).¹ The respective counties for the Mendocino, Riverside, Santa Barbara, and Santa Clara CoCs are the collaborative applicants for those CoCs. The Housing Authority of the City of Fresno (Fresno City Housing Authority) is the collaborative applicant for the Fresno‑Madera CoC. We have made our recommendations to the collaborative applicant because it is generally responsible for carrying out various activities at the direction of the CoC board. We found that they have not conducted sufficiently comprehensive annual gaps analyses to fully understand the needs of those facing homelessness in their areas and whether the services that their networks of service providers offer are sufficient to meet those needs. Although federal regulations require CoCs to plan for such analyses, HUD has not provided detailed guidance on conducting them. The homeless council is best positioned to provide this type of guidance and to disseminate best practices to help ensure that the State’s CoCs are taking all steps necessary to ensure the effectiveness of their efforts to address homelessness.

In addition to the lack of comprehensive gaps analyses, we identified other weaknesses in the five CoCs’ coordination and provision of homeless services. For example, the Fresno‑Madera and Riverside CoCs do not have federally required plans in place that contain clear, long‑term strategies for identifying individuals in need of services and coordinating with service providers. Further, when conducting counts of individuals experiencing homelessness within their areas, the Mendocino and Santa Clara CoCs currently use paper surveys rather than a mobile application, even though the use of this technology can make the counts more reliable and efficient. Given the increasing size of California’s homeless population, it is critical that each CoC understand the needs of those experiencing homelessness in their areas, determine whether adequate numbers and types of service providers exist to meet those needs, and adjust their long‑term strategies to address any deficiencies in the types of services that are available in their communities.

Some CoCs we reviewed could also improve their processes for ensuring that people experiencing homelessness can access available services. For example, each CoC is required to have a process—referred to as a coordinated entry process—to identify individuals needing assistance, assess their housing needs and vulnerabilities, and refer them to available services within the area. However, some of the five CoCs we reviewed have not always followed best practices related to the coordinated entry process, such as establishing a dedicated telephone hotline or having an outreach team to identify individuals needing assistance. Moreover, most of the CoCs we reviewed stated that because the demand for services like housing exceeds the availability, individuals may have to wait weeks or even months after their initial assessments for the CoC to match them with service providers. At that point, difficulties in locating the individuals—who are generally transient—can cause an even longer delay before they receive needed services. However, four of the five CoCs do not track how long it takes to locate people after their initial assessment and referral to a service provider, in part, because HUD did not require them to do so until October 2020. Only the Santa Clara CoC has taken steps to address this problem; it tracked the time required to locate people after they were referred to a service provider, determined that there was a delay in locating people, and established a dedicated team to go into the community to quickly locate individuals for whom it has identified available services.

Finally, two of the CoCs we reviewed have not adequately ensured that they prioritize the most effective local projects to receive federal funding. HUD requires each CoC to design and implement a process for homeless service providers to apply for CoC Program funding each year. The providers submit their applications to the CoC, which reviews and ranks them based on its established scoring criteria. It then submits the applications and its ranked list to HUD, which typically uses the CoC’s list to make funding decisions. Although each of the CoCs we reviewed has policies in place for this process, the Mendocino and Riverside CoCs’ policies and application scoring tools do not ensure that they consistently prioritize the projects that are likely to be the most effective. Specifically, their policies and scoring tools favor projects that have received funding in the past (renewal projects) over new projects, even if the new projects show significant potential.

Given the magnitude of the homelessness crisis in California and the amount of funding the state and federal governments are committing to combat this crisis, the State needs to ensure that its system for addressing problems at both the CoC and the state level is coherent, consistent, and effective. Centralizing performance data collection from service providers and tracking federal and state funds dedicated to combating homelessness is a critical step toward that goal. By investing added responsibility and authority in the homeless council to coordinate the State’s response to homelessness, the Legislature can ensure that decision makers have the ability to clearly assess the State’s efforts, successes, and challenges and to make informed decisions in the fight to reduce homelessness.

Selected Recommendations

Legislature

To ensure that the State effectively addresses the statewide issue of homelessness, the Legislature should provide the homeless council with the authority and the responsibility to work with all state agencies that administer programs that provide state and federal funding for addressing homelessness to collect and track funding data on all homelessness programs, including the amount of funding available and expended each year, the types of activities funded, and types of entities that received the funds.

The Legislature should require the homeless council to prioritize its statutory goals, with an emphasis on giving higher priority to coordination of statewide efforts to combat homelessness. The Legislature should further require the homeless council to finalize its action plan and ensure that the plan documents the State’s approach to addressing homelessness in California and that the action plan is updated regularly.

To ensure that the State has access to comprehensive data about homelessness, the Legislature should require all state entities that administer state funding for homelessness to ensure that recipient service providers enter relevant data into their CoC’s HMIS, as law allows, as a condition of state funding. The required information should include, at a minimum, the same or similar information that recipients of federal CoC programs must enter.

CoCs

To help ensure that they have adequate levels of services and service providers in their respective areas to meet the needs of people who are experiencing homelessness, the counties of Mendocino, Riverside, Santa Barbara, and Santa Clara, and the Fresno City Housing Authority should coordinate with their CoCs to ensure that the CoCs annually conduct a comprehensive gaps analysis in accordance with the plans they have developed under federal regulations. To be effective, the gaps analyses should consider whether adequate services are available in the areas where individuals are experiencing homelessness and should contain strategies to address any deficiencies.

To ensure that they adequately identify their long‑term strategies to address homelessness, the county of Riverside and the Fresno City Housing Authority should coordinate with their CoCs to implement a planning process and develop a comprehensive plan that meets all federal requirements by August 2021. The planning process should ensure that the CoCs update their comprehensive plans at least every five years.

To ensure that individuals experiencing homelessness have adequate access to the coordinated entry process, the county of Mendocino and the Fresno City Housing Authority should, by August 2021, coordinate with their CoCs to assess the feasibility of establishing a dedicated telephone hotline for providing information about available services, assessing individuals’ needs, and referring those individuals to appropriate housing or homeless service providers.

To increase the efficiency of the coordinated entry process, the counties of Mendocino, Riverside, and Santa Barbara and the Fresno City Housing Authority should coordinate with their CoCs to determine how long it takes to locate individuals after they have been matched with a service provider. Specifically, they should use the referral data that HUD required CoCs to collect as of October 2020 to determine whether locating individuals after they have been matched with a service provider is a cause of delay in providing them with services. If these entities find that excessive delays exist, they should coordinate with their CoCs to implement processes, such as deploying a dedicated team to locate these individuals when appropriate housing and services become available.

To ensure that it identifies the projects that offer the greatest possible benefits when ranking applications for CoC Program funds, the counties of Mendocino and Riverside should, by August 2021, coordinate with their CoC to update the CoCs’ scoring tools and review‑and‑rank policies and procedures to give new and renewal projects an equal opportunity to receive federal funding.

Agency Comments

The counties of Mendocino, Riverside, Santa Barbara, and Santa Clara generally agreed with our recommendations and stated that they will take actions to implement them. The Fresno City Housing Authority disagreed with some of our recommendations. For example, it did not agree with our recommendation to annually conduct a comprehensive gaps analysis and to assess the feasibility of establishing a dedicated telephone hotline. Moreover, although we did not make any recommendations to the Homeless Council, it stated that it is ready to work with the Legislature on opportunities to strengthen existing law to enable more effective efforts to prevent and end homelessness in the State.