San Diego isn’t properly reporting or evaluating hundreds of millions in homelessness spending, state audit finds

San Diego city officials have spent hundreds of millions of dollars over three years to combat the growing homeless crisis, but have failed to fully account for their revenues and expenditures — or even to evaluate the effectiveness of many programs, according to a state audit released Tuesday.

In the three fiscal years between July 2020 and June 2023, San Diego spent more than $218 million from federal, state and local sources on myriad programs.

But San Diego officials have not clearly defined performance measures tied to much of that spending or ensured that service providers are getting good results for the work they were paid to do, the officials said. state auditors.

“For example, in a $1.6 million deal for transitional housing and supportive services, the housing authority did not specify how many people the provider was to serve or set an occupancy goal,” the report says.

“Housing Commission staff explained that attaching goals to certain metrics can create unintended unwanted behaviors from service providers to achieve those goals,” it adds.

The California State Auditor’s report examined homeless-related spending in the cities of San Diego and San Jose. The study found similar deficiencies in spending and reporting practices in San Jose, which spent more than $300 million over the same three-year period.

“Both cities use transitional housing as a way to provide shelter to people experiencing homelessness, but they both need to develop additional permanent housing,” Auditor Grant Parks wrote.

“Data consistently shows that permanent housing placements perform significantly better than transitional housing placements,” Parks added.

San Diego officials generally agreed with the state auditor’s recommendations and indicated they would take steps to implement them where possible.

The San Diego Housing Commission, a separate agency under the city’s housing authority and made up of nine City Council members, disagrees with several of the auditor’s findings and conclusions.

The audit examining homelessness-related spending in San Diego and San Jose was released in conjunction with another report evaluating homelessness efforts statewide.

This report notes that more than 180,000 people in California experienced homelessness in 2023, an increase of 53% from a decade earlier. Nine state agencies have invested billions of dollars over the past five years without systematically tracking or evaluating that spending.

The number of unhoused people has increased in San Diego in recent years, according to the audit, but not as sharply as in the state overall.

Between 2015 and 2023, the audit says the number of people experiencing homelessness in San Diego increased from 5,538 to 6,500, based on the city’s point-in-time counts, an increase of just over 17 percent. During the same period, the number of unhoused people in San Jose jumped 56 percent.

The findings may be particularly significant because San Diego and San Jose have huge amounts of homeless funding that they have yet to spend.

According to the state’s review, San Diego had more than $52 million in unspent state and federal funds. Most of that came from $21 million in state housing assistance and homelessness prevention grants and $22 million earmarked for a permanent housing program.

San Jose held more than $86 million in unallocated money intended for homelessness programs, according to the audit.

“To inform policymakers and ensure transparency, cities should track and report in one place all funding they receive and use to reduce homelessness,” state auditors wrote in their recommendations.

The report commends both cities for adopting specific plans to combat increasing homelessness in their jurisdictions. But the audit says each city could improve how it reports its goals and results.

“Neither San Jose nor San Diego has measured the effectiveness of all of their programs in addressing the risk of homelessness,” the report said.

The audit also states that neither city “has a clear long-term plan to address its need for permanent supportive housing.”

Specifically, auditors examined 14 separate programs run by each of the two cities.

San Jose failed to set clearly defined goals in any of the 14 agreements reviewed by auditors. San Diego adopted specific performance measures in eight of the 14 projects reviewed; the other projects had undefined objectives or no objectives at all.

“Although both cities claimed to monitor or review the performance of their service providers, their staff did not always document overall conclusions about the effectiveness of the service providers’ efforts,” the auditors wrote.

“One reason for this gap is that cities’ procedures do not require staff to formally document such assessments,” they added.

The audit was released five days after San Diego Mayor Todd Gloria introduced a new shelter plan in the Middletown neighborhood, just north of Little Italy. This plan, which lacks details and has not yet been approved by the city council, would add at least 1,000 shelter beds.

It also comes as the city faces a budget deficit of more than $160 million for the fiscal year that begins July 1.

Despite this, San Diego increased its spending on health and safety programs during the three years studied by auditors, from $32.3 million for the fiscal year ending June 30, 2021, to $42.9 million. million dollars for the fiscal year ending June 30, 2023.

This money was used to fund things like sidewalk cleaning, day centers, outreach work, and designated camping and parking programs.

“Although the city tracked this data and set certain expectations for how often Clean SD would provide services, it did not develop performance measures to evaluate the program’s effectiveness, such as a reduction in health incidents resulting from the encampments,” the report states. .

Both cities also need to do a better job of moving people into permanent housing, according to the state review. In each jurisdiction, more than 85 percent of people placed in housing were accommodated in temporary accommodation.

“Furthermore, placements within a city are not necessarily the direct responsibility of that city’s government,” the audit found.

In every city, people of color are overrepresented among the homeless population.

In San Diego, for example, black people make up nearly 25 percent of the homeless population, or 4.5 times their number in the overall population, according to the audit. Indigenous people make up a similarly disproportionate share of the homeless population.

The audit says both cities should ensure clearly defined performance measures are established when entering into new agreements with service providers. Cities should also require annual documentation of performance and efficiency, it says.

In response to the audit, city officials generally agreed with the state’s findings but said they were already complying with much of the audit’s recommendations.

“The city already has spending plans in place, but will make them public in one location,” COO Eric Dargan wrote. “The city already requires performance measures, and an overall review and evaluation of the effectiveness of service providers is underway.”

Dargan recently told the San Diego Union-Tribune that he wants to eliminate the city’s Department of Homeless Services and rely more on private philanthropy to combat homelessness.

The Housing Commission issued a more critical response to the audit’s findings.

Commission Chair Lisa Jones said the agency had already launched a series of high-impact programs and was regularly exercising and upgrading its various monitoring tools.

“It is unfortunate that the audit report’s discussion of SDHC and its efforts was too narrowly focused, does not reflect an understanding of the breadth of SDHC’s considerable efforts, and lacks the context necessary for a comprehensive assessment of the system of shelters and services for the homeless,” Jones wrote. .

The auditor’s response indicates that the office stands by its findings.