OIG-CA-24-023: Emergency Rental Assistance (ERA1) Program Notice of Recoupment – Thurston County, Washington

Summary

Department of the Treasury Office of Inspector General document OIG-CA-24-023, dated August 14, 2024, Emergency Rental Assistance (ERA1) Program Notice of Recoupment - Thurston County, Washington. The summary states that the ERA1 statute directs Treasury OIG to monitor and oversee grantee use of funds and that funds used in violation are booked as a debt owed to the Federal Government. It states that in August 2023 OIG received a report from a Thurston County internal auditor of eight cases of suspected and confirmed fraudulent ERA1 payments, agreed on seven, and determined that $100,150 was disbursed to ineligible households. It states that on July 16, 2024 the Bureau of the Fiscal Service issued an invoice for $100,150 to Thurston County.

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Issuer: Inspector general and oversight reports
Document type: Oig Ca 24 023 Emergency Rental Assistance Era1 Program Notice Of Recoupment Thurston
Case: Oig Ca 24 023 Emergency Rental Assistance Era1 Program Notice Of Recoupment Thurston

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“OIG-CA-24-023: Emergency Rental Assistance (ERA1) Program Notice of Recoupment – Thurston County, Washington.” Original at oig.treasury.gov. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/oig-ca-24-023-emergency-rental-assistance-era1-program-notice-of-recoupment-thurston/, SHA-256 2dff3980b1290ced723f4cfe6847d48dc543b8e3afdbaef67f268ad22f73f6ec.

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

OFFICE OF
INSPECTOR GENERAL

OIG-CA-24-023
August 14, 2024

Emergency Rental Assistance (ERA1) Program
Notice of Recoupment – Thurston County, Washington
Summary
The ERA1 statute (Division N, Title V, Subtitle A, § 501, of the Consolidated
Appropriations Act, 2021 (Pub. L. No. 116-260), Dec. 27, 2020, and codified at
15 USC § 9058a) directs the Department of the Treasury (Treasury) to make
allocations and payments to eligible grantees such as States and local
governments, who in-turn, make funding available in the form of rental assistance
to eligible households. The statute also directs the Treasury Office of Inspector
General (OIG) to conduct monitoring and oversight of the receipt, disbursement,
and use of funds made available to grantees. As part of this oversight authority, if
OIG determines that a grantee failed to comply with the use of funds requirements
in the statute, the amount equal to the amount of funds used in violation shall be
booked as a debt of such entity owed to the Federal Government.
Thurston County, Washington (Thurston County) is a recipient of funds under the
ERA1 statute. In August 2023, we received a report from a Thurston County
internal auditor of eight cases of suspected and confirmed fraudulent ERA1
financial assistance payments made by Thurston County. We agreed with the
Thurston County internal auditor’s conclusions on seven of the eight cases. Based
on the information provided, we determined that Thurston County’s ERA1 program
paid out ERA1 funds totaling $100,150 in violation of the ERA1 statute because
the funds were disbursed to ineligible households. On July 16, 2024, Treasury’s
Bureau of the Fiscal Service issued an invoice for $100,150 to Thurston County
establishing a debt to the Federal Government.
The following document is OIG’s Notice of Recoupment (Notice) that established
this debt. Thurston County was given an opportunity to provide a written response
to a draft of the Notice and its written response and our evaluation of that
response is also included in the Notice.
We conducted our review of this ERA case from November 2023 to July 2024. 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 determination in this
Notice.
In conducting our review, we followed the OIG’s system of quality management for
ensuring that the information in this report 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.
Distribution
Department of the Treasury
Jessica Milano, Chief Program Officer, Office of Capital Access
Gregory Till, Chief Operating Officer, Office of Capital Access
Danielle Christensen, Deputy Chief Program Officer for State & Local
Programs, Office of Capital Access
Michelle Dickerman, Deputy Assistant General Counsel, Office of the General
Counsel
Stephen Milligan, 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
Thurston County, Washington

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

OFFICE OF
INSPECTOR GENERAL

Notice of Recoupment
Emergency Rental Assistance
Division N, Title V, Subtitle A, § 501 of the Consolidated Appropriations Act, 2021
(Pub. L. No. 116-260), Dec. 27, 2020, and codified at 15 USC § 9058a (ERA1)

July 9, 2024
Grantee: Thurston County, Washington
Point of Contact: Thomas Webster, Program Director
Thomas.Webster@co.thurston.wa.us
(360) 280-6265

Mailing Address: 2000 Lakeridge Dr., Olympia, WA 98502
Federal Award Identification Number: ERA0124
Recoupment Amount: $100,150
Background/Legal Authority
Under ERA1 section 501(c), Use of Funds, an eligible grantee shall only use ERA1
funds to provide financial assistance and housing stability services to eligible
households. The financial assistance includes: the payment of rent; rent arrears;
utilities and home energy costs; utilities and home energy costs arrears; and other
expenses related to housing incurred due, directly or indirectly, to the COVID-19
outbreak, as defined by the Department of the Treasury (Treasury). Such
assistance shall be provided for a period not to exceed 12 months except that
grantees may provide assistance for an additional 3 months to ensure housing
stability (subject to availability of funds). ERA1 allows for up to 3 months (with
exceptions) for prospective rent payments within the 12/15 month total assistance
limitation.
ERA1 section 501(k)(3) defines eligible household as a household of 1 or more
individuals who are obligated to pay rent on a residential dwelling and that (1) 1 or
more individuals within the household has qualified for unemployment benefits or
experienced a reduction in household income, incurred significant costs, or
experienced other financial hardship due, directly or indirectly, to the COVID-19

This Notice may contain information protected under the Privacy Act, 5 USC 552a.
outbreak, which the applicant shall attest in writing; (2) 1 or more individuals
within the household can demonstrate a risk of experiencing homelessness or
housing instability, which may include a past due utility or rent notice or eviction
notice; unsafe or unhealthy living conditions; or any other evidence of such risk, as
determined by the eligible grantee involved; and (3) the household has a household
income that is not more than 80 percent of the area median income for the
household. The grantee must also ensure that, to the extent feasible, any rental
assistance provided to an eligible household is not duplicative of any other federally
funded rental assistance provided to such household.
Pursuant to its authorities, Treasury established the last day of availability for ERA1
funds as December 29, 2022.
ERA1 section 501(i), Inspector General Oversight; Recoupment, directed that the
Treasury Office of Inspector General (OIG) conduct monitoring and oversight of the
receipt, disbursement, and use of funds made available under the Act. As part of
this authority, if OIG determines that a grantee failed to comply with the use of
funds requirements in the Act (section 501(c)), the amount equal to the amount of
funds used in violation shall be booked as a debt of such entity owed to the Federal
Government.
Facts and Analysis
On August 18, 2023, we received a bulk report 1 from a Thurston County internal
auditor of eight cases of suspected and confirmed fraudulent ERA1 financial
assistance payments made by Thurston County, Washington. 2 We agreed with the
Thurston County internal auditor’s conclusions on seven of the eight cases as
follows: 3
1. For application # the landlord on the application was
different from the property owner on Thurston County’s assessor records at
the time of the application. The Thurston County internal auditor spoke with
the property owner on August 16, 2022, who stated that he lived in the

1
For this Notice, Treasury OIG defines a “bulk report” as a report of multiple suspected or confirmed fraudulent
ERA financial assistance payments made by a grantee or subrecipient; the bulk report may come directly from the
grantee, subrecipient, or from the Treasury OIG Office of Investigations (OI). There could also be instances where,
upon review of individually reported complaints, Treasury OIG determines there to be a “common source” of
reporting (e.g., from a grantee or subrecipient) and decides, for purposes of efficiency, to work all the “common
source” suspected or confirmed fraudulent ERA financial assistance payments as a bulk report.
2
Pursuant to 2 CFR § 200.113, Mandatory disclosures, under the Uniform Administrative Requirements, Cost
Principles, and Audit Requirements, grantees must disclose, in a timely manner, in writing to the Federal awarding
agency all violations of Federal criminal law involving fraud potentially affecting the Federal award.
3
While the Thurston County internal auditor identified eight cases to be suspected of fraud, we agreed with his
determination on seven of them. Due to insufficient evidence, we were unable to reasonably conclude that an
improper payment occurred for one case.

This Notice may contain information protected under the Privacy Act, 5 USC 552a.
home and did not rent it out. The ERA1 rental arrears financial assistance
paid out by Thurston County for this application totaled $21,700.
2. For application # the landlord on the application was
different from the property owner on Thurston County’s assessor records at
the time of the application. The Thurston County internal auditor spoke with
the property owner on November 4, 2022, who stated that they did not rent
the property and did not know the tenant on the application. The ERA1
rental arrears financial assistance paid out by Thurston County for this
application totaled $18,000.
3. For application # the landlord on the application was
different from the property owner on Thurston County’s assessor records at
the time of the application. The Thurston County internal auditor spoke with
the property owner on November 3, 2022, who stated that the tenant listed
on the application was not someone who rented from him and that he did
not authorize anyone else to collect rent on his behalf. The ERA1 rental
arrears financial assistance paid out by Thurston County for this application
totaled $15,000.
4. For application # the landlord on the application was
different from the property owner on Thurston County’s assessor records at
the time of the application. The Thurston County internal auditor spoke with
one of the members of a real estate joint venture that owned the property on
December 5, 2022, who stated that the landlord on the application was
actually a tenant of the property in question and not authorized to sublet it.
The ERA1 rental arrears financial assistance paid out by Thurston County for
this application totaled $12,000.
5. For application # the landlord on the application was
different from the property owner on Thurston County’s assessor records at
the time of the application. The Thurston County internal auditor spoke with
the property owner on September 9, 2022, who stated that he did not have
any tenants that pay rent and did not authorize anyone to collect rent on his
behalf. His son, the listed landlord on the application, and grandson lived at
the property. The ERA1 rental arrears financial assistance paid out by
Thurston County for this application totaled $11,500.
6. For application # the landlord on the application was
different from the property owner on Thurston County’s assessor records at
the time of the application. The Thurston County internal auditor spoke with
the property owner on November 4, 2022, who stated that the landlord on
the application was his tenant, and assistance was provided to the tenant as
the landlord. However, the property owner (the true landlord) did not
authorize any third-party to accept rent on his behalf. The ERA1 rental

This Notice may contain information protected under the Privacy Act, 5 USC 552a.
arrears financial assistance paid out by Thurston County for this application
totaled $11,000.
7. For application # the landlord on the application was
different from the property owner on Thurston County’s assessor records at
the time of the application. The Thurston County internal auditor spoke with
the property owner on August 26, 2022, who stated that she did not have
anyone renting from her at the property in question. The ERA1 rental arrears
financial assistance paid out by Thurston County for this application totaled
$10,950.
These seven cases are summarized as follows:

Thurston County Ineligible ERA1 Financial
Case Application No. Assistance Payments
1 $21,700
2 18,000
3 15,000
4 12,000
5 11,500
6 11,000
7 10,950
Total $100,150

Based on the information provided, we determined that Thurston County’s ERA1
program paid out ERA1 funds totaling $100,150 in violation of the Use of Funds
statute because the funds were disbursed to ineligible households. Accordingly,
these funds are required to be returned to the Federal Government.
Grantee Response
We provided Thurston County an opportunity to respond to our Notice of Proposed
Recoupment. On June 4, 2024, Thurston County provided its written response,
which is included in the Appendix of this Notice, regarding the payments of
financial assistance for the seven applications in question. 4 In its response,
Thurston County provided comments related to Treasury guidance and the
challenges it faced in administering the program. Thurston County’s response is
summarized below.
• Thurston County discovered the seven instances of suspected fraud and
reported these to Treasury. These cases were processed in accordance
with state and federal guidance. The suspected fraud was discovered
after the fact through subrecipient monitoring and expanded testing the

4
The exhibits supporting Thurston County’s written response are not included as part of this Notice due to the
volume of information provided. These exhibits were considered as part of our evaluation of Thurston County’s
response.

This Notice may contain information protected under the Privacy Act, 5 USC 552a.
County conducted that identified persons involved in the application
process misrepresented themselves on applications for assistance.

• Thurston County had no additional documentation to provide regarding
the seven cases. The County’s internal auditor reported these instances
of suspected fraud to law enforcement; however, no funds have been
returned to the County to date.

• Thurston County operated under the guidance provided by Treasury,
which prioritized prompt delivery of assistance to those in need. While
the County recognizes the importance of proper controls, fraud
prevention was difficult with ERA1/ERA2 considering the measures put
in place to expedite the disbursement of funds. The balance between
expediency and thoroughness in verifying applications was made
particularly difficult due to the allowance of self-attestation and the
lowering of certain barriers for applicants. Thurston County also
encountered challenges in implementing an emergency low-barrier
program, which included verification of documentation and
communication with both clients and landlords, many of whom had
limited access to technology.

• Thurston County implemented the ERA program, in accordance with
Treasury guidelines, through a local non-profit agency. The County
terminated its contract with the non-profit agency after receiving an
insufficient reply to a request that the agency strengthen its internal
controls.

• Thurston County requested understanding and leniency in recovery given
the extraordinary challenges faced in the administration of the program
and the pro-active steps the County took to identify fraud and address
gaps that were identified. Thurston County also asked that OIG consider
that the County contributed $372,806 in locally generated revenue to
supplement rent assistance programs in 2021 that were implemented in
broad alignment with ERA1 and ERA2 policies. The County continues to
use state and local resources to operate rental assistance programs.
OIG Evaluation
We considered Thurston County’s written response in finalizing this notice.
We acknowledge that Thurston County encountered challenges in implementing its
ERA program and its request for leniency in the recovery of funds based on those
challenges. We also acknowledge the County’s efforts in using local and state
resources to operate its rental assistance programs. However, in its response,

This Notice may contain information protected under the Privacy Act, 5 USC 552a.
Thurston County neither disputed our determinations nor provided any additional
evidence to demonstrate that the Federal financial assistance provided for the
seven cases were to eligible households as defined in ERA1. Accordingly, pursuant
to ERA1 sections 501(c) and 501(i), Thurston County is required to return these
ERA1 ineligible payments to the Federal Government.

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

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

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