The report states that the state "must do more to assess the cost-effectiveness of its homelessness programs."

Homelessness has become an escalating issue in California over the past decade, as data from the U.S. Department of Housing and Urban Development (HUD) shows. In 2023, HUD recorded a staggering 181,399 people experiencing homelessness on a given night in California alone. This accounted for 28% of all people experiencing homelessness nationwide and 49% of all people enduring unsheltered homelessness across the country.

The California State Auditor conducted a review of nine state agencies managed by the California Interagency Council on Homelessness (Cal ICH), which collectively spent billions of state funds over the last five years to support 30 homelessness programs. The audit specifically focused on five state-funded programs to assess their cost-effectiveness.

Surprisingly, the audit found that at least two programs appeared to be cost-effective: the Department of Housing and Community Development's Homekey program and the California Department of Social Services' CalWORKs Housing Support Program. However, the effectiveness of these programs remains uncertain due to a lack of data on costs and outcomes. Despite receiving significant additional funding in the past two years, some agencies have failed to provide up-to-date information on their homelessness programs.

The audit report also criticized the California Interagency Council on Homelessness for not aligning its action plan to ensure accountability and results. The state auditor emphasized the importance of having current information, stating that it enables data-driven policy decisions to effectively reduce homelessness.

In response to the audit report, Cal ICH highlighted the progress made by the state in addressing homelessness in recent years, including a statewide assessment of homelessness programs. However, the council acknowledged the need to hold local governments accountable, as they are primarily responsible for implementing and collecting data on the outcomes of these programs.

The Homekey program, which converts various establishments into temporary or permanent housing for the homeless, and the Housing Support Program, offering financial assistance and supportive services, were deemed cost-effective. However, auditors were unable to assess the cost-effectiveness of several other programs due to insufficient data on their outcomes.

Democratic State Sen. Dave Cortese and Republican Sen. Josh Hoover, who requested the audit, agreed that it was a critical first step towards addressing California's homelessness challenges. They both stressed the need for improved transparency and accountability and the importance of legislation mandating data collection and public reporting on the costs and outcomes of homelessness programs.

The audit report did highlight some positive findings, noting that individuals placed into permanent housing through these programs remained in stable housing. The available data showed that 84% of exits from permanent housing placements reported individuals moving into other permanent housing. However, inconsistencies in the data collection of several housing programs raised concerns regarding its reliability.

Moving forward, California lawmakers, led by Sen. Dave Cortese, plan to thoroughly analyze the findings of the audit and explore ways to enhance transparency and outcome tracking in the state's cities.