OIG-CA-25-036: Emergency Rental Assistance Program (ERA1) – Notice of Recoupment, Harris County, Texas

Summary

A February 10, 2025 memorandum (OIG-CA-25-036) from Marla A. Freedman and Robert A. Taylor, Jr. is a notice of recoupment for Harris County, Texas under the Emergency Rental Assistance Program (ERA1). It states that a complaint received on April 14, 2022 alleged that a landlord received rental assistance funds but proceeded to evict the tenant. The memorandum determines that Harris County failed to comply with the Use of Funds statute when it paid out $2,805 of ERA1 funds to an ineligible party. Harris County reimbursed the Federal Government for $2,805 with non-Federal funds, and the memorandum makes no recommendation to Treasury management.

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Issuer: Inspector general and oversight reports
Document type: Oig Ca 25 036 Emergency Rental Assistance Program Era1 Notice Of Recoupment Harris C
Case: Oig Ca 25 036 Emergency Rental Assistance Program Era1 Notice Of Recoupment Harris C

Cite this document

“OIG-CA-25-036: Emergency Rental Assistance Program (ERA1) – Notice of Recoupment, Harris County, Texas.” Original at oig.treasury.gov. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/oig-ca-25-036-emergency-rental-assistance-program-era1-notice-of-recoupment-harris-c/, SHA-256 74ee87ac4208fe2ae541b54d3d0de22354623a758606871665920e8f071ba785.

Full text

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

OFFICE OF
INSPECTOR GENERAL

February 10, 2025

OIG-CA-25-036

MEMORANDUM FOR GREGORY TILL
ACTING CHIEF PROGRAM OFFICER, OFFICE OF CAPITAL
ACCESS

FROM: Marla A. Freedman /s/
Executive Advisor, Office of Audit
and
Robert A. Taylor, Jr. /s/
Executive Advisor, Office of Audit

SUBJECT: Emergency Rental Assistance Program (ERA1) – Notice of
Recoupment, Harris County, Texas

On April 14, 2022, the Department of the Treasury’s (Treasury) Office of Inspector
General (OIG) received a complaint alleging that a landlord received rental
assistance funds but proceeded to evict the tenant from the premises. On
March 23, 2023, OIG referred this complaint to Harris County, TX for its review.
Based on the results of its review, we determined that Harris County failed to
comply with the Emergency Rental Assistance (ERA1) 1 Use of Funds statute 2 when
it paid out $2,805 of ERA1 funds to an ineligible party. Additionally, Harris County
informed us that it had recharacterized the $2,805 payment from its ERA1 program
to its ERA2 3 program. In this regard, the recharacterization from ERA1 to ERA2
was not permissible under Treasury guidance, because the ERA1 payment was
made to an ineligible household. In response to a draft of this notice of
recoupment, Harris County reimbursed the Federal Government for $2,805 with
non-Federal funds. Accordingly, we make no recommendation to Treasury
management in this memorandum.
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
1
The statute authorizing ERA1 is codified at 15 U.S.C. § 9058a.
2
15 U.S.C. § 9058a(c).
3
The statute authorizing ERA2 is codified at 15 U.S.C. § 9058c.

1
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
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 or 15 months total assistance limitation.
The ERA1 statute at 15 U.S.C. § 9058a(k)(3) defines eligible household as a
household of one or more individuals who are obligated to pay rent on a residential
dwelling and that (1) one 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) one 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 Treasury 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 March 23, 2023, we made an inquiry to Harris County regarding a complaint
reported to the OIG Hotline. The complaint came from a tenant alleging that the
tenant’s landlord received rental assistance funds but proceeded to evict the tenant
from the premises. In its March 28, 2023, response to our inquiry, Harris County
reported that the tenant applied for rental assistance in May 2021 under
Creekstone Properties LLC, but the correct landlord was Creekstone Apartments.
The grantee approved the tenant for ERA1 assistance in the amount of $2,805 and
sent the money to the incorrect party (Creekstone Properties LLC). Subsequently,

2
Harris County issued an invoice to this party demanding repayment of the funds.
As of February 26, 2024, Harris County had not received repayment.
Harris County informed us that it “recharacterized” the $2,805 payment from its
ERA1 program to its ERA2 program. According to the grantee, it did this
recharacterization so that it could continue to attempt to recapture the ineligible
payment and then use any funds recaptured for its ERA2 program. In this regard,
Treasury issued guidance regarding the appropriate circumstances under which
grantees can recharacterize payments between their ERA1 and ERA2 awards.
According to Treasury’s guidance, ERA grantees may recharacterize expenditures
initially reported under one award as ultimately being funded by the other (between
ERA1 and ERA2 awards), provided the grantee, among other things, complies with
all applicable requirements set forth in the ERA statute and Award Terms, including
2 C.F.R. §§ 200.302-200.303 (regarding financial management and internal
controls) and 2 C.F.R. §§ 200.403-200.405 (regarding the allowability,
reasonableness, and allocation of award costs) for the ERA award that funds the
recharacterized expenditures. 4
Based on the information obtained in response to our inquiry, we determined that
Harris County failed to comply with the Use of Funds statute when it paid out
ERA1 funds of $2,805 to an ineligible party. Additionally, as the $2,805 payment
was an ineligible expenditure under its ERA1 award, it could not be recharacterized
because it did not comply with all applicable requirements set forth in the ERA1
statute. 5 Accordingly, these funds are required to be returned to the Federal
Government.
Harris County Response
We provided Harris County with an opportunity to respond to a draft of this
recoupment finding. In an email response dated October 1, 2024, included in the
appendix to this memorandum, Harris County agreed that the $2,805 payment was
an ineligible expenditure under its ERA1 award, and that the rental assistance funds
were not approved in accordance with ERA1 household eligibility requirements and
internal program procedures. As such, Harris County stated that the payment
would be recharacterized back to ERA1 and refunded to Treasury.
OIG Evaluation
Harris County’s response and action addressed our recoupment finding. We verified
with Treasury’s Bureau of the Fiscal Service that Harris County reimbursed the

4
See Treasury’s Guidance “Emergency Rental Assistance (ERA1): Closeout Resource Updated
January 3, 2023,” footnote 5, available at https://home.treasury.gov/system/files/136/—
ERACloseoutResource_1-5-23.pdf.
5
The statutes authorizing the ERA1 and ERA2 programs, codified at 15 U.S.C. § 9058a and
15 U.S.C. § 9058c, respectively, have requirements that differ in certain respects, including
applicant eligibility requirements, thresholds for administrative expenses, and permissible uses of
program funds. However, those differences do not apply to the $2,805 payment in question.

3
ERA1 program $2,805 for the ineligible financial assistance amount. Accordingly,
we make no recommendation to Treasury management in this memorandum.
We also provided Treasury with an opportunity to review a draft of this
memorandum. Treasury responded that it had no comments.
Methodology
We conducted our review of this ERA case from November 2022 to February
2025. 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 Notice.
In conducting our review, we followed the OIG’s quality control procedures for
ensuring that the information in this report is accurate and supported. Additionally,
CIGIE’s Quality Standards for Federal Offices of Inspector General require that our
work adheres to its general standard for integrity and related elements of integrity,
objectivity, confidentiality, independence, and professional judgment, and to its
general standard for receiving and reviewing allegations. We adhered to these
standards in performing our work.

4
Appendix
Grantee Response

5
Distribution
Department of the Treasury
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
Carolyn Appel, Attorney-Advisor, Office of the General Counsel
Blossom Butcher-Sumner, Attorney-Advisor, Office of the General Counsel
Harris County, Office of County Administration
Director, Technical Assistance and Performance

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Our copy: OIG-CA-25-036-emergency-rental-assistance-program-era1-notice-of-recoupment-harris-c.pdf
Original: oig.treasury.gov