City of Sacramento
City Council - 2PM Report
915 I Street Sacramento, CA 95814
www.cityofsacramento.org
File ID: 2025-01218 6/17/2025 Item 27.
Updated Homeless Response Audit Scope Proposal
File ID: 2025-01218
Location: Citywide
Recommendation: Pass a Motion approving the Updated Homeless Response Audit Scope Proposal.
Contact: Farishta Ahrary, City Auditor, (916) 808-7266, [email protected]; Kevin Christensen, Assistant City Auditor, (916) 808-4743, [email protected]; Office of the City Auditor
Presenter: Farishta Ahrary, City Auditor, (916) 808-7266, [email protected]; Office of the City Auditor
Attachments:
1-Description/Analysis
2-Updated Homeless Response Audit Scope Proposal
3-Original Homeless Response Audit Scope Proposal
Description/Analysis
Issue Detail: In April 2024, the City Council approved a scope proposal for a series of audits focused on the City’s homeless response. The Office of the City Auditor is preparing to release the first audit in the series, which evaluates the effectiveness of the City’s motel shelter program in helping program participants achieve temporary sheltering and in facilitating overall positive outcomes. Since the initial scope proposal was approved, there has been turnover on the City Council, and several Councilmembers have expressed new or evolving concerns regarding the City’s homeless response strategies. In response to these discussions and to ensure the audit work remains aligned with the Council’s priorities, we are bringing forward an updated homeless response audit scope proposal to redefine the scope and objectives of the remaining audit work. The second Homeless Response Audit was approved as part of the City Auditor’s Fiscal Year 2025/26 Work Plan. This second audit will continue to support the City’s efforts to address homelessness with data-driven insights and actionable recommendations, while reflecting the most recent concerns and priorities raised by the City Council.
File ID: 2025-01218 6/17/2025 Item 27.
According to the City Council Rules of Procedures, the Budget and Audit Committee shall receive, review, and forward to the council as appropriate, reports, recommendations, and updates from the City Auditor.
Policy Considerations: The City Auditor’s presentation of the Updated Homeless Response Audit Scope Proposal is consistent with the Mayor and City Council’s intent to have an independent audit function for the City of Sacramento.
Economic Impacts: None.
Environmental Considerations: None.
Sustainability: None.
Commission/Committee Action: On May 27, 2025, the Budget and Audit Committee passed a motion to accept the Updated Homeless Response Audit Scope Proposal and to forward to the City Council for approval.
Rationale for Recommendation: This staff report provides the City Council with information that may be used to meet its responsibility to provide oversight and supervision of the City Auditor and other City departments.
Financial Considerations: The cost of the Updated Homeless Response Audit Scope Proposal was funded out of the Office of the City Auditor budget.
Local Business Enterprise (LBE): None.
City’s Homeless Response:
Updated Audit Scope Proposal
Report# 2024/25-16|May 2025
Performance Audit Division
Farishta Ahrary, City Auditor
Kevin Christensen, Assistant City Auditor
Office of the City Auditor
1 May 2025
Our Mission
To provide a catalyst for improvements of municipal operations and promote a credible, efficient, effective, equitable, fair, focused, transparent, and fully accountable City government.
Our Vision
To improve City services by providing independent, objective, and reliable information regarding the City’s ability to meet its goals and objectives and establish an adequate system of internal controls, root out improper governmental activities (i.e., fraud, waste, or abuse), and address racial, gender, and ethnic inequities.
Suggest an Audit
The Office of the City Auditor conducts performance audits of the City of Sacramento's operations to determine whether these operations and programs are operating efficiently and effectively. If you would like to offer ideas for audits to save the City money, increase revenues, or improve the efficiency and effectiveness of City operations and programs, please fill out our online form:
https://forms.cityofsacramento.org/f/Suggest_an_Audit_Form
Whistleblower Hotline
In the interest of public accountability and being responsible stewards of public funds, the City has established a whistleblower hotline. The hotline protects the anonymity of those leaving tips to the extent permitted by law. The service is available 24 hours a day, 7 days week, 365 days per year.
Through this service, all phone calls and emails will be received anonymously by third party staff.
Report online at http://www.cityofsacramento.ethicspoint.com or call toll-free: 888-245-8859.
The City of Sacramento’s Office of the City Auditor can be contacted by phone at 916-808-1166 or at the address below:
915 I Street
MC09100
Historic City Hall, Floor 2
Sacramento, CA 95814
Office of the City Auditor
2 May 2025
Introduction
In April 2024, the City Council approved a scope proposal for a series of audits focused on the City’s homeless response. The Office of the City Auditor is preparing to release the first audit in the series, which evaluates the effectiveness of the City’s motel shelter program in helping program participants achieve temporary sheltering and in facilitating overall positive outcomes.
Since the initial scope proposal was approved, there has been turnover on the City Council, and several Councilmembers have expressed new or evolving concerns regarding the City’s homeless response strategies. In response to these discussions and to ensure the audit work remains aligned with the Council’s priorities, we are bringing forward an updated homeless response audit scope proposal to redefine the scope and objectives of the next audit. The second Homeless Response Audit was approved as part of the City Auditor’s Fiscal Year 2025/26 Work Plan. This second audit will continue to support the City’s efforts to address homelessness with data-driven insights and actionable recommendations, while reflecting the most recent concerns and priorities raised by the City Council.
Updated Scope Proposal for Second Audit of the City’s Homelessness Response: Evaluation of Costs and Outcomes of Homeless Shelter Types Background
The City funds and operates a variety of homeless shelter models aimed at providing temporary shelter and supportive services to individuals experiencing homelessness. These include emergency shelters, transitional housing programs, and specialized facilities such as navigation centers and non-congregate shelter options. In light of limited resources and the persistent challenges of addressing homelessness, understanding which shelter types are most cost-effective and successful in helping individuals transition to stable housing is critical to improving outcomes and guiding future investments.
Audit Objectives
• Identify and categorize the types of homeless shelters funded or operated by the City. • Assess the costs associated with each shelter type, including per-bed and per-client costs. • Evaluate the effectiveness of each shelter type in helping clients exit homelessness to permanent housing.
• Assess the accessibility of shelter services by examining whether program objectives are intentionally designed to serve diverse populations, and evaluating the extent to which various shelter models effectively address the needs of key subpopulations, including families, youth, and individuals with mental health or substance use conditions. • Identify characteristics or practices associated with shelter types that demonstrate higher positive exit rates.
• Provide recommendations for improving the efficiency and impact of the shelter system.
Office of the City Auditor
3 May 2025
Scope and Methodology
The audit will focus on homeless shelter programs that have been operated or funded by the City over the past two to three fiscal years, as data permits.
We anticipate using the following methods:
• Review of contracts, budgets, and financial records for each shelter type. • Interviews with City staff, shelter operators, service providers, and shelter participants. • Analysis of data from the Homeless Management Information System (HMIS), including shelter entry/exit records and housing outcomes.
• Comparative analysis of performance metrics across shelter types. • Review of best practices and benchmarking against other jurisdictions.
City’s Homeless Response:
Audit Scope Proposal
Report# 2023/24-11|March 2024
Proposed Project 1: Citywide and Systemwide Strategy and Coordination
Proposed Project 2: Review of Homeless Service Contracts Performance Audit Division
Farishta Ahrary, Interim City Auditor
Kevin Christensen, Principal Fiscal Policy Analyst
Joyce Chih, Senior Fiscal Policy Analyst
Chevelle Jackson, Fiscal Policy Analyst
Office of the City Auditor
1 March 2024
Our Mission
To provide a catalyst for improvements of municipal operations and promote a credible, efficient, effective, equitable, fair, focused, transparent, and fully accountable City government.
Our Vision
To improve City services by providing independent, objective, and reliable information regarding the City’s ability to meet its goals and objectives and establish an adequate system of internal controls, root out improper governmental activities (i.e., fraud, waste, or abuse), and address racial, gender, and ethnic inequities.
Suggest an Audit
The Office of the City Auditor conducts performance audits of the City of Sacramento's operations to determine whether these operations and programs are operating efficiently and effectively. If you would like to offer ideas for audits to save the City money, increase revenues, or improve the efficiency and effectiveness of City operations and programs, please fill out our online form:
https://forms.cityofsacramento.org/f/Suggest_an_Audit_Form
Whistleblower Hotline
In the interest of public accountability and being responsible stewards of public funds, the City has established a whistleblower hotline. The hotline protects the anonymity of those leaving tips to the extent permitted by law. The service is available 24 hours a day, 7 days week, 365 days per year.
Through this service, all phone calls and emails will be received anonymously by third party staff.
Report online at http://www.cityofsacramento.ethicspoint.com or call toll-free: 888-245-8859.
The City of Sacramento’s Office of the City Auditor can be contacted by phone at 916-808-1166 or at the address below:
915 I Street
MC09100
Historic City Hall, Floor 2
Sacramento, CA 95814
Office of the City Auditor
2 March 2024
Table of Contents
Introduction ......................................................................................................................................3 Work Plan and Schedule.....................................................................................................................3 Project 1: Citywide and Systemwide Strategy and Coordination ............................................................. 3 Objective 1: Evaluate Whether Existing Homeless Response Data Serves the City in Reducing Impact to the Community ................................................................................................................................. 4 Objective 2: Evaluate Gaps in Achieving an Outcomes-Based Homeless Data System and Identify Systemic Roadblocks to Providing Homeless Services .......................................................................... 4 Project 2: Review of Homeless Service Contracts..................................................................................... 6 Objective: Determine the Efficiency and Effectiveness of Administering Homeless Service Contracts .............................................................................................................................................................. 6
Office of the City Auditor
3 March 2024
Introduction
In accordance with the City Auditor’s 2023/24 Work Plan, we presented the Preliminary Report on the City's Homeless Response (preliminary report)1 to the Budget and Audit Committee on February 27, 20242. As stated in the preliminary report, which is part of our audit planning process for a performance audit in accordance with Generally Accepted Government Auditing Standards, we consider the potential scope of an audit of the City of Sacramento’s (City’s) homeless response to be wide-ranging and were seeking further direction on our audit objectives.
In response to the direction provided and the motion passed by the Budget and Audit Committee 3, we
present the following work plan for two proposed homeless response audit projects.
These audits will be performed in accordance with Generally Accepted Government Auditing Standards.
Those standards require that we plan and perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our findings and conclusions based on our audit objectives.
Work Plan and Schedule
The following work plan outlines two proposed audit projects in the prospective order of performance.
Each audit project is organized into objectives, which include various sub-objectives and a description of the overall approach to accomplishing the audit objective.
Project 1: Citywide and Systemwide Strategy and Coordination The City’s coexisting missions of reducing impact to the community and providing services to the homeless population are reflected in its broad range of homeless response efforts. This project will evaluate whether the set-up of the City’s homeless data system as well as the data currently collected and reported across the homeless system serve to meet the objectives for achieving each of these respective missions and determine whether there are gaps in interdepartmental or interagency
1 This report is available on our website at: https://www.cityofsacramento.gov/content/dam/portal/auditor/Audit - Reports/City%20Auditors%20Preliminary%20Report%20on%20the%20Citys%20Homeless%20Response.pdf .
2 The staff report attached to the February 27, 2024 Budget and Audit Committee agenda for this preliminary report is available at:
https://sacramento.granicus.com/MetaViewer.php?view_id=38&clip_id=5832&meta_id=767788 .
3 A recording of the February 27, 2024 Budget and Audit Committee meeting is available at:
https://sacramento.granicus.com/player/clip/5832?view_id=38&redirect=true ; the draft minutes for the February 27, 2024 Budget and Audit Committee meeting is available at:
https://docs.google.com/gview?url=https%3A%2F%2Fsacramento.granicus.com%2FDocumentViewer.php%3Ffile %3Dsacramento_b59c0694bd8ca247a3955b0937ddaafd.pdf%26view%3D1&embedded=true .
Office of the City Auditor
4 March 2024
coordination that create barriers to ensuring clean and clear streets while also supporting successful exits from homelessness for persons experiencing homelessness (PEH).
Objective 1: Evaluate Whether Existing Homeless Response Data Serves the City in Reducing Impact to the Community
This objective is designed to evaluate data associated with the City’s Incident Management Team and homeless response protocol for usefulness, determine the effectiveness and efficiency of resource deployment, and assess interdepartmental coordination in reducing impact to the community.
Sub-Objectives
• Identify available data and metrics associated with the City’s Incident Management Team and homeless response protocol;
• Determine whether City data is aggregated to ensure complete and accurate metrics related to homeless response activities;
• Evaluate if and how the data meets the City’s response goals; • Evaluate if and how the data facilitates interdepartmental organization and resource deployment;
• Determine how case outcomes and associated data are communicated and reported to the public; and
• Determine if data for contracted outreach or cleanup staff in the City’s system can be corroborated with invoices or other relevant documents.
Audit Approach
To address this objective and the above sub-objectives, we will export, review, and analyze data from Salesforce and other relevant City information management systems for response times and response outcomes; interview City staff to identify the City’s response goals and which metrics serve to fulfill these goals; document the process for using data to plan and implement an interdepartmental response; observe the process for scheduling and deploying interdepartmental City staff to address submitted cases; conduct ride-alongs with staff to understand and observe their roles and responsibilities both in the field and in entering response actions into the respective data systems; analyze allocation of staff resources to respond to calls; review internal and public-facing case resolution notes and data reports; acquire invoices for contracted outreach or cleanup staff that use Salesforce; and compile invoice numbers and cross-reference with Salesforce data.
Objective 2: Evaluate Gaps in Achieving an Outcomes-Based Homeless Data System and Identify Systemic Roadblocks to Providing Homeless Services
This objective is designed to evaluate gaps in achieving a transparent outcome-based data reporting system around homelessness and identify systemic roadblocks to moving PEH from temporary shelters to more permanent solutions as it relates to City programs.
Office of the City Auditor
5 March 2024
Sub-Objectives
• Identify what City data is collected and when, where, and how the data is collected and tracked throughout the homeless system;
• Determine the usefulness of existing City metrics in demonstrating the service provided to PEH and in informing better service delivery:
Determine how and if success is measured for City programs at each relevant level in the homeless system, including how positive or negative individual outcomes are tracked and defined;
Determine whether existing data can demonstrate when and why positive or negative individual outcomes occur;
Identify whether available data is analyzed to determine barriers to service acceptance; • Evaluate whether there is continuity or connectivity in the data collected across all programs and all levels of the homeless system as it relates to the performance and effectiveness of City programs in order to identify systemic bottlenecks;
• Determine whether the City systematically monitors and reviews data related to its own homeless service programs to ensure data integrity and to analyze program performance; • Determine how existing City program data is being reported to stakeholders; and • Evaluate the City’s motel shelter program for effectiveness and appropriateness in helping program participants achieve temporary sheltering and in facilitating overall positive outcomes.
Audit Approach
To address this objective and the above sub-objectives, we will collaborate with the Department of Community Response and external partners to acquire data from data systems including but not limited to the Homeless Management Information System and Salesforce; review best practices for data usefulness and metrics; conduct a benchmark study by researching homeless data management, monitoring, and assessment practices in other jurisdictions; categorize and assess existing data and metrics for relevance to goals and to other data points in the system; assess flow path of data for data completeness and accessibility of programs; analyze existing data for programmatic and systems-level performance; interview staff regarding the process for monitoring program performance; obtain and assess published data reports; obtain and review contracts and data for the City’s motel shelter program; and attend walkthroughs and conduct interviews with motel shelter operators to observe program implementation and identify program barriers, such as transportation to the site location, allowing of pets, and document requirements.
Office of the City Auditor
6 March 2024
Project 2: Review of Homeless Service Contracts
The City has entered into numerous contracts with several organizations to assist in the deployment of services to the PEH population. This project will evaluate whether a sample of City contracts with homeless services providers are designed consistently and administered efficiently and effectively.
Objective: Determine the Efficiency and Effectiveness of Administering Homeless Service Contracts This objective is designed to determine whether the City is effectively and efficiently administering contracts for the operation of the various homeless response, homeless assistance, and shelter-related services.
Sub-Objectives
• Conduct a preliminary review of contracts with agencies that provide homeless-related services; • Create a risk assessment and determine a scoring system that will be used to select a sample of contracts to audit;
• Select and evaluate three to five contracts for inconsistencies, comprehensiveness of contract language such as the right to audit clause, or other issues; • Determine whether the City’s requests for proposal process for homeless-related contracts aligns with City policy and adequately captures the scope of services that the City is seeking; • Determine accuracy of invoice payments to identify any over or underpayment; • Test for agencies’ compliance and performance with City contract provisions; • Evaluate the appropriateness of the City’s process for issuing contract addendums, amendments and revisions;
• Evaluate contract performance measures and metrics for usefulness and alignment with City goals;
• Evaluate report submissions to City such as invoices and other relevant deliverables for accuracy, relevance, and completeness; and
• Determine the sufficiency of the contract oversight and monitoring process.
Audit Approach
To address this objective and the above sub-objectives, we will compile City contracts with agencies that provide homeless-related services and identify risk factors for scoring; select and review the language in a sample of these contracts; identify the City’s right to audit clause in each contract; review the City’s request for proposal process and documents for these contracts; assess the City’s process for issuing contract addendums, amendments and revisions; obtain and review documents and reports that contain the various contract performance goals and metrics; compare contract scopes and outcomes to the City’s goals; interview City staff on the contract oversight and monitoring process and document relevant procedures; and conduct interviews and potential walkthroughs with agencies.