State audit flags issues with San Diego’s spending on homeless services

SAN DIEGO (FOX 5/KUSI) — A new state audit into San Diego’s efforts to combat homelessness released on Tuesday found the city has fallen short in key areas of its response, despite significant investments in recent years.

The report was released as part of a wider review of how effective California’s spending has been to address the crisis, which concluded elected officials “must do more to assess the cost-effectiveness of homelessness programs” — both at a local and state level.

In San Diego, the auditor identified issues with officials’ ability to monitor the effectiveness of their spending to help unhoused residents due to the absence of a cohesive tracking system that can be used to see how much money is put towards services across departments.

It also found inconsistent reviews of contracts by city officials with third-party contractors, such as non-profit shelter operators, to ensure they are meeting expected performance criteria.

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It also found the city does not have a “clear, long-term plan” to ensure there is enough permanent housing to move unhoused people out of temporary housing — accommodations that are also in short-supply.

The city of San Jose, which was also reviewed by the auditor alongside San Diego, had similar, albeit more glaring issues observed by the auditor.

“It’s not just the advocates saying this anymore,” Michael McConnell, an advocate for unhoused residents, told FOX 5. “Now you have the state auditor saying, ‘here you need to start measuring the effectiveness.'”

Given the complex and far-reaching footprint of homelessness, San Diego’s strategy towards tackling the homelessness crisis is a multi-department effort — each with differently structured budgets and their own procedures for tracking spending.

This fragmented budgeting, the audit says, makes it difficult for city officials to definitively identify all the revenues or expenditures related to its homelessness efforts, aside from a rough estimate.

The city’s efforts to monitor the performance of its homeless strategy also fall victim to issues arising from this patchwork of services, according to the audit.

City agencies all have their own standards to evaluate the effectiveness of their efforts to address homelessness. For instance, Environmental Services Department tracks the frequency in which it clears litter from places where unsheltered San Diegans are, but it does not have data that can help the city look at reductions in public health incidents arising from encampments.

Outside municipal agencies, San Diego relies heavily on contractors to provide services to its homeless residents, but the city often does not have clearly defined performance expectations detailed in its agreements with these third-parties.

The audit used one $1.6 million contract between San Diego and a non-profit for interim housing and services as an example, as it did not outline how many people city officials expect the provider to serve. It also did not have a set target for shelter occupancy in the contract.

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Where there are clear expectations in a contract, the auditor found that San Diego has not received all the necessary reporting from the provider to “determine the effectiveness of the services they purchased.”

“Without such analyses, it is unclear how the cities and the housing commission decide to renew agreements,” the audit read. “… both the city and the housing commission risk those providers’ using city dollars ineffectively and ultimately not reducing homelessness.”

Contributing to this difficulty in monitoring effectiveness, the auditor noted, is federal and state privacy laws that limit the sharing of unhoused people’s data between agencies.

However, data that is available paints a picture most people experiencing homelessness know all too well: There is not nearly enough permanent housing to move people out of temporary housing, causing a back-up that makes it difficult for others to seek those accommodations.

“San Diego does not complete the vast majority of its referrals of people experiencing unsheltered homelessness to the emergency shelters included in the coordinated intake process because San Diego lacks available beds,” the audit said, pointing to San Diego Housing Commission data that indicates the city’s shelters “consistently operate at or near full capacity.”

The audit recommended San Diego officials take the following steps over the next few months:

• “To promote transparency, accountability, and effective decision-making,” the city should publicly report in one place all the federal and state funding it receives, as well as any local funds put towards reducing homelessness.

• Regularly monitor the amount of unspent funds to ensure it complies with any future spending deadlines and “can adequately explain to the public the anticipated timing of its future spending.”

• Establish clearly defined performance measures when entering into agreements with service providers, as well as require staff to “at least annually document an overall performance review” of the providers’ efforts to meet this criteria.

• Develop performance measures to evaluate the effectiveness of the city’s public health and safety programs related to encampments, like reports on the number of public health incidents it responds to and the effects of any actions taken.

• Develop plans for “siting and building” permanent housing it has identified that it needs for people experiencing homelessness.

In the city’s reply to the auditor’s recommendation, officials “generally agreed with the recommendations” and indicated they would work to implement them “where feasible.”

It also explained the city is in the process of identifying new sites for permanent housing development after updating its comprehensive shelter strategy last June.

In a statement to FOX 5/KUSI, San Diego Mayor Todd Gloria echoed this sentiment, describing the audit as a “tool to understand how much more needs to be done in order to continue meaningfully addressing homelessness, and we hope to impress on state leaders the need for adequate and ongoing funding for California’s biggest crisis.”

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Even so, the CEO of the San Diego Housing Commission, the city’s primary administrator over homeless services, disagreed with some of the report’s findings in a separate response to the auditor, describing it as “too narrowly focused” and “lacked the context necessary for a comprehensive assessment of the homelessness shelters and service system.”

The housing commission reiterated their view of the auditor’s findings in a statement sent to FOX 5/KUSI on Tuesday, saying that they have met the needs of those in the city experiencing homelessness with “efficiency, effectiveness and accountability for ourselves and our partners.”

“We continue to work closely with the City of San Diego and additional partners on these ongoing, multifaceted efforts to provide shelter and a path to permanent housing that is person-focused and with as few barriers as possible,” the statement continued. “We shared this position and critical additional information with the state auditor’s office in our response.”

FOX 5’s Zara Barker contributed to this report.

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