OIG-CA-25-030: Emergency Rental Assistance (ERA1) Program Notice of Recoupment – State of Alaska

Summary

Treasury Office of Inspector General OIG-CA-25-030, dated December 18, 2024, Emergency Rental Assistance (ERA1) Program Notice of Recoupment – State of Alaska. The summary states that in September 2022 OIG made an inquiry to the Alaska Housing Finance Corporation (AHFC) about an allegation of fraud reported to the OIG Hotline, and determined that AHFC paid out ERA1 funds in the amount of $16,698.52 in violation of the ERA1 statute because the funds were disbursed to an ineligible household. It states that on December 11, 2024 Treasury's Bureau of the Fiscal Service issued an invoice for $16,698.52 to the State of Alaska, establishing a debt to the Federal Government. It states that the review ran from September 2022 to December 2024.

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Issuer: Inspector general and oversight reports
Document type: Oig Ca 25 030 Emergency Rental Assistance Era1 Program Notice Of Recoupment State Of
Case: Oig Ca 25 030 Emergency Rental Assistance Era1 Program Notice Of Recoupment State Of

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“OIG-CA-25-030: Emergency Rental Assistance (ERA1) Program Notice of Recoupment – State of Alaska.” Original at oig.treasury.gov. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/oig-ca-25-030-emergency-rental-assistance-era1-program-notice-of-recoupment-state-of/, SHA-256 a80ef4d0d7cb982d6bd4104bcac328cf8c594a5c8bb4f2e11327494736c6010f.

Full text

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

OFFICE OF
INSPECTOR GENERAL

OIG-CA-25-030
December 18, 2024

Emergency Rental Assistance (ERA1) Program
Notice of Recoupment – State of Alaska
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.
The State of Alaska is a recipient of funds under the ERA1 statute through its
component unit Alaska Housing Finance Corporation (AHFC). In September 2022,
we made an inquiry to AHFC regarding an allegation of fraud reported to the OIG
Hotline that two individuals acting as a landlord and a tenant enrolled and applied
fraudulently to receive rental assistance funds. Based on the information obtained
in response to our inquiry, we determined that AHFC paid out ERA1 funds in the
amount of $16,698.52 in violation of the ERA1 statute because the funds were
disbursed to an ineligible household. On December 11, 2024, Treasury’s Bureau of
the Fiscal Service issued an invoice for $16,698.52 to the State of Alaska,
establishing a debt to the Federal Government.
The following document is OIG’s Notice of Recoupment (Notice) that established
this debt. The State of Alaska 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 September 2022 to December
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 judgement, 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
Blossum Butcher-Sumner, Attorney-Advisor, Office of the General Counsel
State of Alaska
Finance Officer
State Accountant
Senior Assistant Attorney General
Alaska Housing Finance Corporation
Research & Service Program Manager, Planning
Director, Planning and Program Development
Internal Audit Director

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)

December 3, 2024
Grantee: State of Alaska
Point of Contact: Donald Gotchal, Planner I
DGotchal@ahfc.us
(907) 330-8282

Marylyn Peralta
marylyn.peralta@alaska.gov
(907) 465-3885

Mailing Address: PO Box 110204, Juneau, AK 99811 or
PO Box 110001, Juneau, AK 99811

Federal Award Identification Number: ERA0428
Recoupment Amount: $16,698.52
Background/Legal Authority
Under the ERA1 statute at 15 U.S.C. § 9058a(c), Use of Funds, an eligible grantee
shall only use ERA1 award 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 Secretary of 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).
The ERA1 statute at 15 U.S.C. § 9058a(c)(2)(B)(i) allows for up to 3 months (with
exceptions) for prospective rent payments within the 12 or15 months total
assistance limitation.
The ERA1 statute at 15 U.S.C. § 9058a(k)(3) defines eligible household as a
household of 1 or more individuals who are obligated to pay rent on a residential
1

This Notice may contain information protected under the Privacy Act, 5 USC 552a.
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 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 the ERA1 statute at 15 U.S.C. § 9058a(e)(2), the last day of the
period of performance for grantees that received ERA1 reallocated funds is
December 29, 2022.
The ERA1 statute at 15 U.S.C. § 9058a(i), Inspector General Oversight;
Recoupment, directs that the Treasury Office of Inspector General (OIG) conduct
monitoring and oversight of the receipt, disbursement, and use of funds made
available under the ERA1 program. As part of this authority, if OIG determines that
a grantee failed to comply with the use of funds requirements in the ERA1 statute
(15 U.S.C. § 9058a(c)), the amount equal to the amount of funds used in violation
of 15 U.S.C. § 9058a(c) shall be booked as a debt of such entity owed to the
Federal Government.
Facts and Analysis
On September 13, 2022, we made an inquiry to the Alaska Housing Finance
Corporation (AHFC), a component unit of the State of Alaska (Grantee) that
administers the ERA1 program, about a complaint (allegation of fraud) reported to
the OIG Hotline. The complaint alleged two individuals acting as a landlord and a
tenant enrolled and applied fraudulently to receive rental assistance funds. In its
September 22, 2022, response to our inquiry, AHFC reported a violation of its
policy that the person posing as the landlord in the complaint was not the owner of
record for the rental property. Further, AHFC paid $16,698.52 in ERA1 assistance
to the person posing as the landlord for the period August 2020 through August
2021. On January 10, 2023, AHFC further confirmed the person posing as the
landlord was unable to produce sufficient documentation to establish ownership of
the rental property at the time for which rental assistance was provided.
Based on the evidence obtained in response to our inquiry, we determined that the
State of Alaska, through AHFC, paid a total of $16,698.52 in ERA1 funds in
violation of the ERA1 statute at 15 U.S.C. § 9058a(c), Use of Funds, because the
2

This Notice may contain information protected under the Privacy Act, 5 USC 552a.
funds were disbursed to an ineligible household. Accordingly, these funds are
required to be returned to the Federal Government.
Grantee Response
We provided the State of Alaska an opportunity to respond to our Proposed Notice
of Recoupment. On July 10, 2024, AHFC provided its written response which is
included as Appendix 1 to this Notice. 1
AHFC does not concur that the facts underlying this record support the proposed
recoupment. According to AHFC, its administration of the ERA1 program required
tenants to submit applications for relief. These applications were required to include
income documentation, photo identification, and copies of the lease/utility bills. All
materials were reviewed by processing teams for completeness prior to the
application advancing for payment; payments were made directly to utility
providers or landlords; landlords and utility providers were required to register
separately from the underlying applicants and to provide payment and taxpayer
identification information for reporting.
Additionally, AHFC explained the proposed recoupment involves a case where: The
individual applied for rent relief funding, the individual provided photo identification
that was reviewed and approved, the individual provided income information that
was reviewed and approved, the individual provided a lease that was reviewed and
approved, the individual identified a landlord, the landlord registered separately and
provided their taxpayer identification number. All the key controls that AHFC set in
place, many of which exceeded the allowable review requirements promulgated
and encouraged by Treasury, were followed, i.e., no step was skipped or
overlooked by AHFC staff or processing teams.
Per AHFC, the proposed recoupment does not appear to be supported for three
reasons.

• The Standard of Review and Grantee Liability
A key distinction is needed for policy violations and fraud. Treasury OIG
indicates that AHFC reported a violation of its policy. The allegation in this
case is that a landlord fraudulently misrepresented themselves as the owner.
This is distinct from a violation of policies and procedures. In this case,

1
AHFC in its response referenced several ERA Frequently Asked Questions (FAQs) published by
Treasury. These FAQs provide guidance for ERA1 and ERA2 requirements. The FAQs are available
at https://home.treasury.gov/policy-issues/coronavirus/assistance-for-state-local-and-tribal-
governments/emergency-rental-assistance-program/faqs.
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This Notice may contain information protected under the Privacy Act, 5 USC 552a.
AHFC procedures and policies were followed in the processing of this
application. Violations of policy examples would include staff not reviewing
income documents, not reviewing the file to ensure there was a valid lease,
etc. In those hypotheticals, there would be a material violation of AHFC
policy from within the AHFC team. If the team had approved an application
for a household whose documented income exceeded the allowable limits,
there also would have been a material violation of AHFC's policy. There is no
such instance of AHFC's controls, policies or procedures not being followed
in the facts. The guidance from Treasury establishes a standard of review
that is inconsistent with the triggering event for the proposed recoupment.
With respect to fraud and abuse, Treasury's Frequently Asked Questions
(FAQs) in FAQ1 requires that grantees establish controls to prevent fraud.
However, Treasury explicitly qualifies at the close of FAQ1 that "Grantees
must have in place reasonable validation or fraud prevention procedures to
prevent abuse." The first five topics addressed in the FAQs explicitly allow
for, and in several cases encourage, reliance on self-attestations to
document program eligibility.
The FAQs encourage to Grantees to "avoid establishing documentation
requirements that are likely to be barriers to participation" (see FAQ1). With
respect to landlords, Treasury's FAQs in 1, 12, and 31 allow for attestations
and payments to tenants in the absence of landlord participation. The
guidance explicitly states that Grantees may use unvalidated and fallible self-
attestations and fact-based proxies in the same space that it outlines a
requirement for reasonable abuse and fraud prevention measures.
Grantees are neither implicitly nor explicitly tasked with indemnifying
Treasury and the Program against all instances of waste, fraud or abuse.
Holding Grantees to a 100% indemnity standard in all cases of fraud is
inconsistent with Treasury's published guidance. The provision for
Treasury's Recoupment of ERA funds from the Grantee is addressed in
FAQ35 for instances where " ... the grantee does not comply with the
applicable limitations on the use of those funds." In this case, the policies
and procedures in place for the ERA program administration were followed,
and all policies and procedures were consistent with the Treasury guidance
for program administration. AHFC had robust provisions to prevent waste,
fraud and abuse that exceeded many of the minimum requirements that were
being encouraged by Treasury. Consequently, AHFC complied with the
applicable limitations for processing the application that were provided by
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This Notice may contain information protected under the Privacy Act, 5 USC 552a.
Treasury in the written guidance. [OIG Note: The FAQ quoted by AHFC is in
FAQ25, not FAQ35.]

• The Underlying Facts
Although coordinated fraud between the applicant and landlord was alleged,
the only definitive conclusion of the investigation was that ownership of the
unit by the person represented to be the landlord could not be completely
verified. The attestations and documentation provided by the tenant, while
called into question, were not definitively disproven. The focus in Treasury's
guidance on delivering relief to the underlying household resulted in 100%
proof of ownership not being a requirement for processing rental assistance.
Allowances for written attestations and provisions for unresponsive landlords
appear in FAQ12 and FAQ31. The status of tenant rights and obligations to
continue occupancy of the unit, even if the person identified as the landlord
was not the owner, was never disproven.

• The Alternative Recourse Available to Treasury
We are unaware of any limitation placed on Treasury that would prevent an
attempted recoupment of funds from the underlying person that received
funding on the applicant's behalf if fraud is established.
OIG Evaluation
We considered AHFC’s response in finalizing this notice. Overall, we find that
AHFC’s response did not provide support that the assistance in question was
eligible. It should be noted that, it was AFHC, in its written response to our request
for a review of the allegation at hand, that informed OIG the landlord was not the
owner of record for the property in question and characterized that lapse as an
“AFHC policy violation.” It now asserts, in its written response to a draft of this
Notice, that a definitive conclusion of its investigation was that ownership of the
unit by the person represented to be the landlord could not be “completely
verified.” It must be remembered that the grantee has the duty to demonstrate the
eligible use of funds. Although the tenant’s attestations and supporting
documentation may not have raised any questions during the review process, upon
learning there was significant doubt of ownership, AHFC should have taken steps

This Notice may contain information protected under the Privacy Act, 5 USC 552a.
to verify ownership. 2 Its response did not state whether it attempted to further
verify the landlord’s interest in the property, and no documentation of property
ownership was provided by AHFC with its response.
In its written response, the AHFC makes reference to several of Treasury’s ERA
FAQs that are not contextually accurate or applicable. Specifically:
• AHFC asserts, with respect to landlords, Treasury's FAQs in 1, 12, and 31
allow for attestations and payments to tenants in the absence of landlord
participation. According to AHFC, this guidance explicitly states that
Grantees may use unvalidated and fallible self-attestations and fact-based
proxies in the same space that it outlines a requirement for reasonable abuse
and fraud prevention measures. The implication here is that either (1)
Treasury guidance is inconsistent – allowing unvalidated self-attestations but
requiring reasonable abuse and fraud prevention measures – or (2) Treasury
guidance negates any expectation that self-attestations be validated. We
reject either implication.
In FAQ1, Treasury states that grantees may be flexible as to the particular
form of documentation they require to determine eligibility, including by
permitting photocopies or digital photographs of documents, e-mails, or
attestations from employers, landlords, caseworkers, or others with
knowledge of the household’s circumstances. Treasury also directs that all
applications for assistance include an attestation from the applicant that the
information included is correct and complete. In short, this FAQ requires the
eligibility to be documented, with attestations as to the veracity of the
information provided. We do note that FAQ1 permits grantees to rely on self-
attestations alone for the provision of housing stability services.3 Also,
Treasury’s FAQ4 does provide for grantees to rely on self-attestations of a
household’s income if the household is unable to provide income
documentation; however, Treasury directs in this situation that the grantee
must reassess the household’s income every 3 months, by obtaining
appropriate documentation or a new self-attestation.

2
While not directly related to this case, Treasury’s ERA guidance does reference circumstances
where a landlord’s interest in a property should be verified. Specifically, FAQ5 addresses instances
where applicants are unable to provide a lease or other typical evidence of residence. Among
suggested alternative documentation is a written attestation by a landlord who can be verified as
the legitimate owner or management agent of the unit. (Emphasis added.)
3
According to Treasury’s FAQ1: “When housing stability services represent the only ERA1
assistance a household will receive (i.e., no payments using ERA1 funds will be made either to the
household, to the landlord, or to a utility provider), grantees are encouraged to rely on a household’s
self-attestations for purposes of confirming eligibility.”
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This Notice may contain information protected under the Privacy Act, 5 USC 552a.
• FAQ12 is not applicable to this case as the FAQ provides guidance for
situations where a landlord does not participate in the program and the
outreach efforts expected of the grantee to attempt to secure participation
by the landlord. AFHC reported to Treasury that the ineligible assistance
payment was made to the landlord; therefore, the landlord was a program
participant.
• FAQ31 is applicable to this case but not in the manner presented by AHFC.
The FAQ provides guidance to grantees as to their responsibility to ensure
recipients of funds under ERA programs, including tenants and landlords, use
the funds for their intended purpose. Specifically, grantees should require
recipients of funds under ERA programs, including tenants and landlords, to
commit in writing to use ERA assistance only for the intended purpose.
However, grantees are not required to obtain documentation evidencing the
use of ERA program funds by tenants and landlords. That said, the FAQ
states: “Grantees are expected to apply reasonable fraud prevention
procedures and to investigate and address potential instances of fraud or the
misuse of funds that they become aware of.” (Emphasis added.) Clearly, this
guidance puts the onus on AHFC to reach a definitive determination of the
property ownership in this case.
AHFC is also incorrect that (1) grantees are neither implicitly nor explicitly tasked
with indemnifying Treasury and the ERA program against all instances of waste,
fraud or abuse; and (2) holding grantees to a 100% indemnity standard in all cases
of fraud is inconsistent with Treasury's published guidance. The ERA statutes
require that funds only be used for eligible purposes and eligible households; there
are no exceptions for waste, fraud, or abuse. 4
Finally, AHFC’s response suggests that Treasury could go after the landlord in this
case “if fraud is established.” Treasury did not approve or make the ineligible
payment; this was done by AFHC, who was solely responsible to ensure the
eligibility of payment.

4
Of note, an October 2024 Treasury and Treasury OIG Joint Notice states that “Grantees are
expected to reimburse Treasury [for ERA1] or their own ERA programs [for ERA2] with their
jurisdiction’s own non-ERA funds for ERA award funds that were disbursed due to fraud.” See
“Joint Notice, U.S. Department of the Treasury and the Treasury Office of Inspector General
Reminding All Emergency Rental Assistance Financial Assistance Award Recipients of
Responsibilities and Requirements for Reporting Fraud and Reimbursing Fraud Losses and
Unallowable Costs,” Oct. 4, 2024, available at https://home.treasury.gov/system/files/136/ERA-
Joint-Treasury-OIG-Notice.docx or https://oig.treasury.gov/sites/oig/files/2024-10/ERA-Joint-
Treasury-OIG-Notice.pdf.
7

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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