Commentary

Twenty-Four Billion and No Scoreboard

Posted on by Bill McCarthy

California put roughly 24 billion dollars into homelessness and housing programs over five fiscal years ending in 2022-23. Nine state agencies ran more than thirty separate efforts. The State Auditor’s April 2024 report found that the agency charged with tracking the results had stopped analyzing the spending after 2021. Of five major programs that together received about 13.7 billion, only two produced enough data to judge whether they were cost-effective. The other three, which took 9.4 billion, could not be evaluated at all. The money left the treasury. The state cannot say what it bought.

What the auditor counted

State Auditor Grant Parks wrote that the state does not have current information on the ongoing costs and results of its homelessness programs. The California Interagency Council on Homelessness, the body created to coordinate the work, had analyzed nothing past fiscal 2021. It had no consistent method for collecting outcome data across programs and did not verify the accuracy of the numbers cities and counties submitted. Three of the five programs the audit examined—including the state’s main homelessness funding stream—did not generate enough information for the auditor to determine whether they worked. The two that could be assessed, Homekey and the CalWORKs Housing Support Program, were judged “likely cost-effective.” Homekey converts hotels and motels into housing at a reported average of about 144,000 dollars a unit in its first round, cheaper than new construction. That is the exception the data allowed. The rest is a blank.

The same pattern appeared locally. San Jose and San Diego, both examined in the audit, failed to thoroughly account for their spending or measure the success of many of their programs. Nearly a third of the people who left placements funded by one major grant program in several large counties left for “unknown” destinations. The auditor’s letter to the governor and the Legislature stated the plain consequence: in the absence of this information, the state cannot determine whether these programs represent the best use of its funds. The Legislative Analyst’s Office figure of 24 billion is the sum that was allocated. The auditor’s finding is that the sum was spent without a scoreboard.

Who signed the checks and who stopped counting

The governor’s administration oversees the agencies that wrote the checks. The Interagency Council was stood up under that administration and then ceased the tracking work after 2021. Nine separate departments administered the thirty-plus programs; none of them was required, in real time, to feed standardized cost and outcome numbers into a single system the Legislature could read. The Legislature appropriated the money year after year, including multi-billion-dollar peaks during the surplus years, without embedding the data requirements that would have made the later audit unnecessary. Local governments received large shares and, in the cities the auditor sampled, did not keep the books the state later needed.

After the audit, the Legislature passed measures that would have required annual public reporting of cost and outcome data for each state homelessness program and an evaluation of the main local grant program. The governor vetoed them. He said the requirements duplicated reporting already present in budget language and recent policy, and that they would add needless work. The vetoes left the data desert the auditor described in place. A criminal task force was later announced by the U.S. Attorney for the Central District to examine fraud and waste in homelessness funds in the Los Angeles area; that is a separate inquiry into possible theft, not a substitute for the missing statewide accounting.

What the missing numbers mean

The homelessness count did not fall in proportion to the spending. In many cities it rose. The 24 billion dollars is not a sum that vanished from bank accounts in a single embezzlement. It is a sum that was distributed through dozens of programs, to nonprofits, to developers, to local governments, and to hotel conversions, without the state maintaining the records that would show which dollars produced which exits from the street. When the tracking stopped in 2021, billions more continued to go out the door. The vetoes in 2024 declined to restart the count on the terms the Legislature had written.

Responsibility sits with the officials who controlled the agencies, the council that stopped measuring, the Legislature that kept appropriating without the data rules, and the governor who rejected the later attempt to impose them. The result is a five-year outlay whose largest pieces cannot be scored. Taxpayers know the total. They do not know the return. That is the mess the audit recorded.

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