Los Angeles County, the most populous county in California, is successfully using money from a state tax on millionaires to fund programs that help the mentally ill, according to a new report.

The study by nonprofit research firm RAND Corp. found that two programs funded with money from the Mental Health Services Act have allowed the county to provide help for an increasing number of adults and children with mental health needs. These efforts have succeeded in reducing homelessness, incarceration and hospitalization among the mentally ill, and improved the wellbeing of people served by the programs, the report found.

Voters approved the Mental Health Services Act, initially known as Proposition 63, in 2004. It imposes a 1 percent tax on people who earn more than $1 million a year to pay for mental health programs. The tax generates approximately $2 billion annually, which goes to local agencies to expand programs for all who suffer from mental illness or are at risk for mental illness.

A state auditor’s report released last month found that many counties have failed to spend the money—accumulating $80 million in interest as of fiscal year 2015-16. The audit criticized the California Department of Health Care authorities for allowing counties to accumulate $2.5 billion in unspent funds.

Data showed Los Angeles County had amassed $738 million, including $192 million in reserves by the end of the 2014-15 fiscal year, the most recent year information was available.

But, LA County has used some of the funding successfully, according to the RAND study.

One LA County program, Prevention and Early Intervention, provides preventative therapy to children and young people at risk of developing mental health problems because of traumatic experiences and family circumstances. The program aims to prevent mental illness from developing, or to reduce the severity of existing mental health problems over the long term.

The tax funds have allowed the program to expand its client numbers by over 65 percent to 130,000 children and youth, the report found.

The second program evaluated, Full-Service Partnership, helps children and adults with serious mental illness achieve stability by providing, housing, healthcare, food and clothing, among other support. Researchers found the program is reaching people in high-poverty areas, especially racial and ethnic minorities, and is improving the life circumstances of those it serves.

“It seems like they’re reaching a vulnerable population,” said Scott Ashwood, lead author of the report, which was commissioned by the county. “They’re reaching people we would like them to reach. These are people who are homeless, people with mental illness … And once people are in the program, good things are happening for them.”

LA County receives almost $500 million from the tax each year, according to Debbie Innes-Gomberg, deputy director of the Program Development and Outcomes Bureau at the Los Angeles County Department of Mental Health. About two-thirds of the money funds the programs studied in the report.

Innes-Gomberg said the funds have made a “huge difference” for the county’s mental health department, helping them expand services and to weather the 2007 economic downturn. She said the county hopes that the focus on the prevention program in particular will reduce the need for other interventions later on.

Innes-Gomberg called the state audit’s findings “fair.” She said counties had held on to the money out of concern the funding would be unpredictable. Los Angeles County now plans to spend $353 million over the next two years to expand mental health services, including recovery and reintegration programs, residential treatment and living facilities and hiring new mental health workers. That’s in addition to $544 million already budgeted for existing programs, according to a county report.

“What we realized is that, after a couple years of dollars increasing and not decreasing, we (had) a pot of money that we hadn’t spent yet,” Innes-Gomberg said. “The counties are now focused on appropriately spending the dollars.”

Ashwood said the RAND Corp. findings and other, smaller evaluations of county mental health programs funded through MHSA have so far shown consistently positive results. That should encourage counties to use the funds they have, he said.

“If the counties are spending the money on these programs, they’re getting good results,” he said. “They should spend it.”