California failed to track how billions are spent to combat homelessness programs, audit finds

California has failed to consistently track the ongoing costs and outcomes of its homelessness services despite spending billions of dollars over the past five years to combat the crisis, a new state audit report found.

Homelessness in America reached a record high last year, according to federal data, which recorded over 650,000 people experiencing homelessness on a given night in 2023. Of those hundreds of thousands, California accounted for 28% of the nation's unhoused population.

An estimated 181,399 people — with 68% unsheltered — are homeless in California, the U.S. Department of Urban Planning and Development reported last December. That number marks a 53% increase from 2013, according to the California auditor’s report released on Tuesday.

To address the crisis, the state allocated nearly $24 billion over the past five years to fund at least 30 homeless and housing programs during the last five fiscal years (2018-2023). But the state has not collected sufficient data to determine whether the programs have been effective, the report says.

The report cast some blame at the California Interagency Council on Homelessness, an 18-member council that oversees the state's "Housing First" model and regulations to "reduce the prevalence and duration of homelessness in California," according to its mission statement.

The audit found that the council has not tracked and evaluated state programs since June 2021. It also noted that currently there is no reliable system to gather information on the costs and results of the programs.

"In general, this report concludes that the State must do more to assess the cost-effectiveness of its homelessness programs," California State Auditor Grant Parks wrote in a letter to Gov. Gavin Newsom and lawmakers.

Audit reveals a 'data desert' in California's investments

The audit reviewed five state-funded homelessness programs to assess their cost‑effectiveness and concluded that two — Homekey and the CalWORKs Housing Support Program — were "likely cost‑effective."

Since 2020, Homekey has received about 3.6 billion in funding to convert hotel and motel rooms into housing for people experiencing homelessness, according to the audit. The average costs of converting a room was "significantly lower than the costs of building other affordable housing," in the state, the report says.

CalWORKs Housing Support Program received about $760 million over the past five fiscal years and spent an average of $12,000 to $22,000 per fiscal year on families that received housing support through the program, according to the report. Studies have shown that states can spend as much as $30,000 to $50,000 per year on a single person experiencing homelessness, the report noted.

But the audit found that the three other programs, which received more than $9.4 billion in funding since 2020, couldn't be fully evaluated due to lack of data. "In the absence of this information, the State cannot determine whether these programs represent the best use of its funds," the report reads.

Democratic California state Sen. Dave Cortese had requested the audit after touring an encampment in San Jose in 2022. In a statement Tuesday, Cortese called for improved data and greater transparency at both the state and local levels. 

"Unfortunately, there is a balkanized approach to data collection and outcomes, with no centralized system for tracking our investments," Cortese said. "This data desert leaves the Legislature and the public without a system of checks and balances to answer basic questions about the effectiveness of our programs."

Republican California state Assemblymember Josh Hoover, who co-authored the request for the audit, said in a statement Tuesday that the audit was a "critical first step" in addressing the state's crisis.

"(California) has failed to solve its homelessness crisis and it doesn’t even know where the dollars are going. Without more transparency, we won’t see any accountability," Hoover said on X, formerly Twitter.

More funding for homeless in Proposition 1

The audit's findings came after Proposition 1 was narrowly approved by California voters last month. The measure — championed by Newsom — will help restructure the state's mental health system and curb the homeless crisis.

Prop. 1 had passed by less than half a percent of the vote and will allocate about $6.4 billion to build mental health treatment facilities and housing. It will also provide rental assistance for the unhoused who are chronically homeless and have mental health or addiction issues.

Funding will be used to add 11,150 new treatment beds and supportive housing units and over 26,00 outpatient spots, according to the governor's website. The bond includes $1 billion set aside specifically for veterans’ housing.

While the measure is not expected to significantly change the number of unhoused people in California, it received bipartisan support to boost funding for housing and mental health.

Contributing: Claire Thornton, Terry Collins, and Kathryn Palmer, USA TODAY