Contracted Homeless Services

Local governments in Washington have spent millions of dollars to provide services intended to move people out of homelessness. Despite increased spending, the number of homeless people has continued to grow. Each county and city must determine how it wants to address this complex, human problem. They should do so based on the needs of the people experiencing homelessness and the availability of local resources.

One long-term solution to our homelessness crisis is an adequate stock of permanent housing with necessary social supports. But in the meantime, local governments should be systematically collecting data on their homeless support programs, analyzing the data and working with contractors to move the needle.

The audit selected four local governments to review in this performance audit: the cities of Spokane and Seattle, and the counties of Snohomish and Yakima. We looked at how these governments could better identify and prioritize contracted homeless services. We also wanted to see if there were ways to better manage the performance of providers they hire.

Read a two-page summary of the report.

Report Number 1031310 Report Credits

Key results

The audit’s results fell into three main areas.

  • Lack of data-driven analyses. All four local governments involved key stakeholders as they worked to identify homeless service needs. But most did not use a data-driven process to prioritize what services were most needed in their communities. Their priorities were often driven by which grants or other funding were available for which kinds of services.
  • More investment in temporary solutions than in permanent housing. Experts recommend investing in permanent supportive housing which can help provide people a home with the social supports needed to stay housed. Only two audited governments made greater  investments in permanent housing over the last five years.
  • Inadequate monitoring and correction of service-provider performance. Experts recommend governments take appropriate action to address poor provider performance. The audited governments did not take corrective action to address poor performance for most underperforming programs the audit reviewed.

Each audited government had its own successes and challenges, and the audit recommendations were specific to each one.


Experts recommend investing in permanent housing solutions because this approach to homelessness can help provide people a stable place to live. Such solutions work best when they incorporate the support people need in order to stay housed. However, giving everyone a permanent home right away may not be feasible for two main reasons:

  • Building housing is expensive
  • It takes time to assemble land and plans, then construct homes

Along with permanent housing, people experiencing homelessness have a wide range of needs. In Washington, local governments are responsible for identifying and determining which needs are the highest priority. They are also responsible for managing the performance of the service providers they hire to address needs. The Washington State Department of Commerce and the U.S. Department of Housing and Urban Development provide guidance and funding to help local governments address homelessness.

As governments work to address homelessness, experts recommend using data to best identify and address unmet needs. They also recommend that governments take appropriate action to improve performance when providers are not making progress to help reduce homelessness.

Prioritizing services

Governments can better prioritize services they procure by establishing a data-driven process to identify and address unmet needs for people experiencing homelessness. Federal guidelines recommend that governments establish a data-driven process to determine which service needs to prioritize for funding. All audited governments involved key stakeholders to identify homeless service needs. However, most lacked a data-driven prioritization process to identify and address unmet needs. Instead of data, funding priorities were often driven by grant requirements, consultation with homelessness boards, and approval from elected officials.

Strategic planning issues

Audited governments generally contracted for homeless services that aligned with their strategic plan priorities. However, two  invested far less in permanent housing compared to temporary solutions. Spokane and Snohomish had greater investment in permanent housing over the last five years. In contrast, Seattle has consistently spent far more on shelters than on permanent housing. Yakima invested most of its funds in supportive services.

Audited governments included statewide objectives, and actions they would take to address them, in their strategic plans. They were less consistent about establishing other key components. Staff offered several reasons why they did not include required components:

  • The right people were not involved in creating the plans
  • A perception that some plan objectives do not need the required components
  • Insufficient time to develop the plans

Better use of data

Better use of data could help audited governments evaluate and monitor their service providers’ performance. We found audited governments could strengthen their oversight of service providers by making better use of performance data to evaluate and monitor provider performance, to discuss performance results with providers, and to inform decision making. Audited governments could also improve oversight by training staff and involving department leadership in performance reviews. Some governments did not follow practices for monitoring provider performance for a variety of reasons, including:

  • Limited authority to use performance results for corrective action
  • High staff turnover and staffing limitations
  • Technology issues
  • Prioritization of COVID-19 response

Managing provider performance

Governments need to more consistently address poor provider performance to help reduce homelessness. We found audited governments rarely took action to address underperforming providers. They lacked procedures outlining a schedule of corrective actions to address ongoing poor performance. They did not have a tracking tool to capture and review actions taken for low-performing programs. Additionally, they did not have language in their contracts stating that they expect providers to work with them to devise an action plan if they have not met the established performance benchmarks.

High staff turnover and limited staffing affected some governments’ ability to address poor provider performance. However, holding contracted providers accountable is both feasible and necessary, even in the face of external factors.


We made recommendations to help audited governments better identify and address unmet needs for people experiencing homelessness. For example, we recommended they develop a data-driven process that compares homeless services needed and available in the community to identify the extent of unmet need for specific services. They should also use data to help determine which unmet needs are the highest priority for funding.

We also recommended that governments address causes for inadequate oversight of their service providers. We encouraged them to use leading practices we identified to strengthen monitoring and more consistently address poor provider performance.