Follow-Up on Recommendations from Report No. 17-05, Audit of Housing First, Community Assistance Program, and Hale Mauliola Homeless Programs May 2021

From Honolulu City Auditor, May, 2021 (excerpt)

Background

The Audit of Housing First, Community Assistance Program, and Hale Mauliola Homeless Programs, Report No. 17-05, issued September 2017, was a self-initiated audit based on concerns expressed by the Honolulu City Council and the general public regarding homelessness in the community. The audit sought to evaluate the effectiveness and sustainability of the city’s homeless related programs, as well as the Department of Community Service’s (DCS) administration of related contracts. The report made eight recommendations.

This Follow-up on Recommendations from Report No. 17-05, Audit of Housing First, Community Assistance Program, and Hale Mauliola Homeless Programs, examines the status of the eight recommendations issued in the 2017 report. In addition, Section 3-502(d), Revised Charter of Honolulu, requires the city auditor to conduct follow-up audits and monitor compliance with audit recommendations by audited entities. This follow-up audit fulfills this requirement.

Report No. 17-05 found that while Hale Mauliola fell short of meeting its first year goals, the Housing First and Community Assistance Programs were successful in exceeding their contracted service goals. These programs were touted as housing first oriented initiatives which purport that cost savings from decreased incidents of arrest and emergency medical service use outweigh the costs to provide housing subsidies and other government services. The audit found quantitative data to show actual cost savings was lacking. Because cost savings were unverifiable, we concluded that the continued use of general funds for these programs questionable.

The audit also found that the Department of Community Services lacked formal policies and procedures for the management of contracts which led to the risk of fraud, waste, and abuse of $140,152 in security deposits. We also found insufficient internal controls permitted late invoice submissions from contractors and insufficient departmental invoice reviews led to delays in contractor reimbursements. The department’s Homeless Initiatives Group was responsible for over $14 million in homeless related programs, but was found to have inadequate resources, training, and support to consistently complete all of its job requirements putting funds under its care at risk.

The report also found that the city and state lack a coordinated strategic plan to leverage opportunities and potentially combine resources and efforts to more effectively combat homelessness. Neither the state or city governments have a comprehensive plan with measurable objectives, timelines, allocation of resources, or performance benchmarks that could increase measures of success and maximize resources to help more homeless individuals.

The audit made eight recommendations that the Department of Community Services should:

1. Upon contract completion, formally evaluate Housing First, Community Assistance Program, and Hale Mauliola (in particular) against program goals, objectives, performance metrics, and other pertinent criteria to determine future support, sustainability and viability;

2. Utilize the cost-benefits analysis data for hospital and emergency room use, as well as arrests and incarcerations, issued by the University of Hawai`i to evaluate the effectiveness of the city’s homeless programs and quantify cost savings as appropriate;

3. Establish formal policies and procedures for managing, administering, and monitoring homeless related program contracts;

4. If Housing First or Community Assistance Program continue, establish a requirement for contractors to account for the disposition of security and utility deposits separately in monthly reports;

5. Provide training to ensure that staff have the knowledge, skills, and resources to properly evaluate and timely process contractor invoices so that the Department of Budget and Fiscal (BFS) staff do not have to spend additional time performing DCS contract administration and evaluation functions;

6. Review staff position descriptions and take steps to ensure compliance with their job requirements;

7. Reallocate vacant positions to form a formal, functioning back office, or contract administration group, to administer and monitor homeless-related contracts, support other DCS grants and contracts; and expand use of information systems; and

8. Continue to work with the State of Hawai`i and other stakeholders to establish a comprehensive homeless strategic plan that establishes specific timelines, performance benchmarks, allocation of resources, responsibilities among stakeholders, quantitative objectives that are measurable, and identifies opportunities to reduce duplication and leverage funding.

FOLLOW-UP AUDIT RESULTS

Based on our review, we found that of the eight recommendations made in Report No. 17-05, one was resolved and seven were in process….

Appendix A Current Homelessness Data and Trend

Current homelessness data and trends indicate changing needs in the homeless population, an increase in public perception regarding the severity of homelessness, and a low level of confidence in city efforts to address homelessness.

We reviewed homeless point-in-time (PIT) counts and resident surveys in the National Community Survey (NCS) to assess the efficacy of homelessness efforts and public perception, results were mixed. The PIT count is an annual street and shelter count that determines the number of people experiencing homelessness on a given night and is the primary source of data for the unsheltered homeless population. As shown in Exhibit A1.1, O`ahu’s PIT counts have shown a decreasing trend overall from 2017-2020, however unsheltered homeless particularly in O`ahu have shown an increasing trend over the same time period....

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2017: Audit: Honolulu Homeless Programs Subject to Corrupt, Incompetent Department of Community Services