2017-112

The Governor of California

President pro Tempore of the Senate

Speaker of the Assembly

State Capitol

Sacramento, California 95814



Dear Governor and Legislative Leaders:

As requested by the Joint Legislative Audit Committee, the California State Auditor presents this audit report concerning homelessness in California and the Los Angeles Homeless Services Authority’s (Authority) administration of public funds. This report concludes that the State should increase its efforts to better address homelessness while the Authority should strengthen its process for reviewing applications to provide homeless services. Based on 2017 information from the U.S. Department of Housing and Urban Development (HUD), California leads the nation with both the highest number of people experiencing homelessness—about 134,000, or 24 percent of the nation’s total—and the highest proportion of unsheltered homeless persons (68 percent) of any state. In contrast, New York City and Boston shelter all but 5 percent and 3 percent, respectively, of their homeless populations.

One factor that contributes to other entities having lower proportions of unsheltered homeless individuals is the existence of a specific organization dedicated to addressing homelessness. In 2016 state law created the Homeless Coordinating and Financing Council (state homeless council). However, because it has no permanent staff and no funding for such staff, the state homeless council faces challenges in establishing a coordinated response to address homelessness in California. For instance, the lead agencies for California’s Continuum of Care (CoC) areas (HUD administers the CoC program to provide funding to address homelessness) asserted that they are not equipped organizationally or financially to fully address homelessness. A single state entity could help the lead agencies resolve issues such as the need for additional resources to implement HUD-recommended activities and the ability to better implement HUD requirements and improve services for California’s homeless population.

Regarding the Los Angeles City and County CoC area, its 55,000 homeless individuals is the largest homeless population in the State. The Authority is its lead agency and is responsible for distributing public funding to providers of homeless services in the county’s eight service planning areas (service areas). Primary sources of funding that the Authority distributes are HUD, Los Angeles County, and the city of Los Angeles. Although the Authority used a reasonable process to evaluate and approve applications for funding new homeless projects, it should address certain deficiencies, including outdated written procedures and a flawed documentation process. The Authority stated it has begun addressing some of these issues. Moreover, the Authority awarded the smallest funding amounts to service areas outside the city of Los Angeles. Two reasons cause this variation: some funding sources restrict the geographic areas where the Authority can allocate its funds and fewer providers apply for funding in these service areas. Although the Authority has technical assistance programs to help increase capacity of its service providers, its limited data hinder its ability to identify and address funding variations across service areas.

Respectfully submitted,



ELAINE M. HOWLE, CPA

State Auditor

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