DSH, Liberty Healthcare defend CONREP operations; DSH says it implemented most audit recommendations and opposes state-run transitional housing

Department of State Hospitals Director Stephanie Clendenin and Liberty Healthcare’s senior vice president, Ken Carabello, told the Joint Legislative Audit Committee that DSH and Liberty jointly operate the CONREP program and that the department has moved on most audit recommendations while continuing to oppose state-run transitional housing.

DSH involvement and oversight

“DSH contracts with Liberty Healthcare to operate the CONREP SVP program,” Director Stephanie Clendenin said. “The department is heavily involved in the operation of the program and provides close oversight of Liberty Healthcare in the performance of their duties.” She described multiple review steps—clinical consulting psychologist review, program leadership review, and legal review—before a site assessment is approved to go to the housing committee and the court. Clendenin added that the director’s office signs off internally before submission to the housing committee.

Implementation of audit recommendations

Clendenin told the committee that DSH had implemented four of the five audit recommendations on the auditor’s timeline. Those actions included issuing guidance for housing committee designees (November 2024), conducting a formal program review of Liberty (February 2025) and implementing an outcome tracker in December 2024. DSH also completed an analysis in March 2025 on separating contract services and evaluating whether some contracting activities could be absorbed internally.

Transitional housing: DSH’s objection

Clendenin said the department formally disagreed with the auditor’s recommendation to explore state-owned transitional facilities. She told legislators transitional housing would not solve siting challenges and could increase costs and community opposition. “Siting locations for transitional facilities to house multiple individuals in one facility would not be easier and likely would be more difficult,” she said, noting residency restrictions, evolving school/homeschool locations, and county-of-domicile statutory requirements as barriers.

Liberty’s view and program history

Ken Carabello, the Liberty senior vice president, said Liberty has operated CONREP in California since 2003 and described the program as an intensive, evidence-informed community supervision and treatment model used in multiple states. “Liberty is proud of its work as a partner to the state of California for these last 22 years,” Carabello said.

Procurement and vendor interest

Clendenin and chief deputy director Chris Edens said the department has repeatedly solicited other vendors—multiple solicitations in 2015, 2022 and 2023—and issued requests for information to try to split services (for example, separating the housing search from treatment and supervision). Edens said the department received little vendor interest, partly because the program is small in scale and politically high-profile.

Oversight gaps acknowledged

Clendenin acknowledged problems the auditor raised, including Liberty’s electronic document repository shortcomings and uneven documentation practices. She said DSH conducted a formal program review and implemented a process to track outcomes from reviews and program monitoring on an ongoing basis.

What DSH and Liberty said will change

DSH will conduct formal program reviews every two years going forward and track corrective actions via the outcome tracker. DSH and Liberty also told the committee they will respond to specific allegations of misleading landlord outreach and other misconduct if members provide details for investigation.

What remains unresolved

DSH maintains that state-run transitional facilities would not be a workable fix under current law and that statutory changes would likely be required to make such facilities viable. DSH and Liberty also said they will continue to pursue splitting some services but face market constraints on finding alternate vendors.