California screws up COVID 19 funds for homeless

August 24, 2021

2020-611

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 authorized by state law, my office conducted a state high‑risk audit of the California Department of Housing and Community Development’s (department) management of certain federal funds related to the COVID‑19 pandemic. 

The department administers the Emergency Solutions Grant (ESG) program, which received $316 million in federal funding to prevent, prepare for, and respond to the COVID‑19 pandemic (ESG‑CV) for individuals who are at risk of or experiencing homelessness. The following report details our conclusion that the department failed to expedite access to federal funding to address the impact of the COVID‑19 pandemic on the homeless population.

The department’s delays in providing access to this funding hampered the efforts of Continuum of Care entities (CoCs), which are groups of organizations and individuals that collaborate on homeless services and prevention for specified geographic areas. The department did not give most CoCs access to the first round of federal funding until December 2020, seven months after the federal government announced the funding. The department also only recently gave most CoCs access to the second, larger round of funding. These delays slowed the CoCs’ abilities to contract with service providers and to expand services for the vulnerable homeless population.

Further hindering the CoCs’ ability to effectively administer this funding was the department’s delay in hiring a contractor to guide their design and administration of ESG-CV-funded activities. The department recognized in June 2020 that it lacked the capacity to manage the ESG-CV program and would need to work with a contractor to manage contracts with CoCs, monitor their spending, and provide them with such guidance. However, the department did not have a contractor in place for a full year; CoCs were left without necessary direction from December 2020, when they first received funds, until June 2021 when the contractor began managing the program.

The department’s delayed actions undermined the intent of the ESG‑CV funds to address the urgent needs of individuals experiencing homelessness during the pandemic, and they have increased the risk that the State may lose funding due to the September 2022 federal spending deadline that it could otherwise use to mitigate the homelessness crisis.

Respectfully submitted,

ELAINE M. HOWLE, CPA
California State Auditor