Emergency Rental Assistance Program (ERA2)–Questioned Cost Finding, Commonwealth of Virginia

Summary

In this October 16, 2026 memorandum (OIG-27-014), the Treasury Office of Inspector General questions $18,000 in Emergency Rental Assistance (ERA2) money paid by the Virginia Department of Housing and Community Development (DHCD). An anonymous complaint to the OIG Hotline in March 2022 alleged that an individual posed as both landlord and tenant and used falsified documentation to get the money for a property the individual neither owned nor leased. Virginia DHCD's internal investigation confirmed that the applicant did not own the property, but DHCD had not recouped the payment as of June 2026. DHCD's Chief Financial Officer concurred in a September 14, 2026 response. The OIG recommends that Treasury's Office of Capital Access disallow the $18,000 and direct Virginia DHCD to reimburse that amount to the Federal Government.

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Full text

DEPARTMENT OF THE TREASURY
W ASHINGTON, D.C. 20220

OFFICE OF
INSPECTOR GENERAL
October 16, 2026

OIG-27-014

MEMORANDUM FOR JEFFREY STOUT
ACTING CHIEF PROGRAM OFFICER, OFFICE OF CAPITAL
ACCESS
From: Julie Wong /s/
Acting Deputy Assistant Inspector General for Audit

Subject: Emergency Rental Assistance Program (ERA2)–Questioned
Cost Finding, Commonwealth of Virginia

During the coronavirus pandemic, Congress authorized and funded two Emergency
Rental Assistance (ERA) programs administered by the Department of the
Treasury (Treasury) to provide rental assistance to eligible households: (1) ERA1—
Division N, Title V, Subtitle A, § 501 of the Consolidated Appropriations Act,
2021 (Pub. L. No. 116-260), Dec. 27, 2020, and codified as 15 USC § 9058a:
and (2) ERA2—Title III, Subtitle B, § 3201 of the American Rescue Plan Act (Pub.
L. No. 117-2), Mar. 11, 2021, and codified as 15 USC § 9058c.
In March 2022, Treasury’s Office of Inspector General (OIG) Hotline received an
anonymous complaint alleging an individual used falsified documentation to receive
ERA2 financial assistance totaling $18,000 for a property the individual neither
owned nor leased. After reviewing Commonwealth of Virginia (Virginia) Department
of Housing and Community Development (DHCD) documentation, we agreed with
Virginia DHCD management’s conclusions that the applicant submitted false
landlord and tenant documentation. Accordingly, we question these costs. In
response to a draft of this questioned cost finding, Virginia DHCD agreed the
payment was issued in violation of ERA2 Use of Funds requirements. We are
recommending Treasury’s Office of Capital Access disallow the questioned cost
amount of $18,000 and direct Virginia DHCD to reimburse that amount to the
Federal Government. See Appendix 2, Schedule of Monetary Benefits, for
additional detail on “questioned cost.”
Background/Legal Authority
Under the ERA2 statute at 15 U.S.C. § 9058c(d)(1), Use of Funds, an eligible
grantee shall only use ERA2 award funds to provide eligible households with
financial assistance, housing stability services, and as applicable, other affordable
rental housing and eviction prevention activities. The financial assistance includes:
the payment of; rent; rent arrears; utilities and home energy costs; utilities and

This Notice may contain information protected under the Privacy Act, 5 USC 552a.
home energy costs arrears; and other expenses related to housing, as defined by
the Secretary of the Treasury. The aggregate amount of such assistance an eligible
household may receive under an ERA2 award, when combined with financial
assistance provided under an ERA1 award authorized by 15 U.S.C. § 9058a, shall
not exceed 18 months. See 15 U.S.C. § 9058c(d)(1)(A)(ii).
The ERA2 statute at 15 U.S.C. § 9058c(f)(2) defines eligible household as a
household of one or more individuals who are obligated to pay rent on a residential
dwelling and with respect to which the eligible grantee involved determines that:
(1) one or more individuals within the household has (a) qualified for unemployment
benefits or (b) experienced a reduction in household income, incurred significant
costs, or experienced other financial hardship during or due, directly or indirectly, to
the coronavirus pandemic; (2) one or more individuals within the household can
demonstrate a risk of experiencing homelessness or housing instability; and (3) the
household income is not more than 80 percent of the area median income for the
jurisdiction.
Pursuant to the ERA2 statute at 15 U.S.C. § 9058c(g), the last day of the period
of performance for grantees was September 30, 2025.
Facts and Analysis
In March 2022, Treasury’s OIG Hotline received an anonymous complaint alleging
an individual posed as both a landlord and tenant and used falsified documentation
to receive ERA2 financial assistance totaling $18,000 for a property the individual
neither owned nor leased for application number (no.) (b) (6) .
In July 2025, we submitted an inquiry to the program administrator of Virginia’s
ERA award funds, DHCD. Virginia DHCD management confirmed through an
internal investigation that the applicant did not own the property and fraudulently
obtained ERA2 award funds totaling $18,000. As a result of identifying the
ineligible ERA2 expenditure, Virginia DHCD management initiated the formal
process to recover the funds from the applicant. Despite these efforts, Virginia
DHCD was unsuccessful in recouping the payment as of June 2026.
Based on Virginia DHCD’s response and our review of documentation provided, we
agreed with Virginia DHCD management’s conclusions that the applicant submitted
false landlord and tenant documentation. Specifically, for application
no. (b) (6) Virginia DHCD paid ERA2 assistance based on an application
that lacked valid documentation to establish eligibility; therefore, Virginia DHCD
cannot establish the payment as an eligible use of ERA2 award funds. As such, we
determined that the rent and rental arrears paid, in the amount of $18,000 is an
ineligible ERA2 expenditure that failed to comply with the requirements of the
ERA2 statute. Accordingly, OIG is questioning the cost of $18,000 for the ERA2
financial assistance paid for application no. (b) (6)

This Notice may contain information protected under the Privacy Act, 5 USC 552a.
Grantee Response
We provided Virginia DHCD with an opportunity to respond to a draft of this
questioned cost finding. On September 14, 2026, the Chief Financial Officer of
DHCD provided written response by email, stating they concurred with OIG’s
conclusions. See Appendix 1 for the response in its entirety.
OIG Evaluation
Virginia DHCD management concurred with our questioned cost finding.
Recommendation
We recommend that Treasury’s Office of Capital Access disallow the questioned
cost amount of $18,000 and direct Virginia DHCD to reimburse that amount to the
Federal Government.
Methodology
We conducted our review of this ERA case from July 2025 to August 2026. We
inquired of the grantee and other relevant parties, reviewed related documentation,
and performed other appropriate procedures. We believe the evidence obtained is
sufficient and appropriate to provide a reasonable basis for our findings and
conclusions in this memorandum.
In conducting our review, we followed the OIG’s system of quality management for
ensuring that the information in this Notice is accurate. We also followed the
Council of the Inspectors General on Integrity and Efficiency (CIGIE) Quality
Standards for Federal Offices of Inspector General which require that our work
adheres to its general standards for integrity to include objectivity, independence,
professional judgment, and confidentiality as well as its general standard for
receiving and reviewing allegations.

This Notice may contain information protected under the Privacy Act, 5 USC 552a.
Appendix 1

Grantee Response

VIRGINIA

DHCD
Department of Housing and Community Development

September 14, 2026

U.S. Department of Treasury
Office of Inspector General
875 15 Street NW
Washington, D.C. 20005

Subject: Response to OIG Finding - ERA2 Questioned Cost of $18,000

Dear Somaly Casey,

The Commonwealth of Virginia, Department of Housing and Community Development
(DHCD), submits this formal response regarding the Office of Inspector General's (OIG)
inquiry into an $18,000 Emergeney Rental Assistanee Program (ERA2) payment determined
to be non-compliant with statutory requirements.

Concurrence with OIG Determination
After reviewing the case details and coordinating with OIG during its inquiry, DHCD
concurs with OIG's determinat ion that the payment in question was issued in violation of the
ERA2 Use of Funds requirements at 15 U.S.C. § 9058c(d)(l). The individual who received
assistance did not meet the definition of an ''eligible household" under 15 U.S.C.
§ 9058e(f)(2), and falsified documentation resulted in disbursement for costs not allowable
under the statute.

DHCD has initiated recovery efforts of the full amount from the individual involved.

Please advise if any further information or documentation is required as OIG proceeds with
its review.

Sincerely,

(b) (6)
Danielle Robertson
Chief Financial Officer, DHCD

This Notice may contain information protected under the Privacy Act, 5 USC 552a.
Appendix 2

Schedule of Monetary Benefits
According to the Uniform Administrative Requirements, Cost Principles, and Audit
Requirements for Federal Awards at Title 2 of the Code of Federal Regulations
§ 200.1 a “questioned cost” is an amount, expended or received from a Federal
award, that in the auditor's judgment:
(i) is noncompliant or suspected noncompliant with Federal statutes,
regulations, or the terms and conditions of the Federal award;
(ii) at the time of the audit, lacked adequate documentation to support
compliance; or
(iii) appeared unreasonable and did not reflect the actions a prudent person
would take in the circumstances.
Questioned costs will be recorded in Treasury’s Joint Audit Management Enterprise
System. The amount will also be included in the OIG Semiannual Report to
Congress. It is Treasury management’s responsibility to report to Congress on the
status of the agreed to recommendations with monetary benefits in accordance
with 5 USC § 405(c) of the Inspector General Act of 1978, as amended.
Recommendation Questioned Costs
Recommendation No. 1 $18,000
The questioned costs represent ERA2 amounts provided by Treasury under the
American Rescue Plan Act of 2021 that were paid by Virginia DHCD to an ineligible
household in violation of the ERA2 statute at 15 U.S.C. § 9058c(d), Use of Funds.

This Notice may contain information protected under the Privacy Act, 5 USC 552a.
Distribution
Department of the Treasury
Jeffrey W. Stout, Acting Chief Program Officer, Office of Capital Access
Kendra N. Young-Freeman, Director, Housing Programs, Office of Capital
Access
Michelle Dickerman, Deputy Assistant General Counsel, Office of the General
Counsel
Carolyn Appel, Attorney-Advisor, Office of the General Counsel
Blossom Butcher-Sumner, Attorney-Advisor, Office of the General Counsel
Virginia Department of Housing and Community Development

This Notice may contain information protected under the Privacy Act, 5 USC 552a.

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