Audit reveals oversight problems in Harris County’s rental assistance program


Harris County, Texas A months-old Harris County audit note obtained by KPRC 2 Investigates revealed a series of issues with the management of public funds in the Harris County Rental Assistance Program.

The program is designed to provide relief to both tenants and landlords by paying rent to Harris County residents, who are negatively affected by the COVID-19 pandemic.

Harris County hired BakerRipley, a nonprofit organization, with expertise in running public assistance programs, to run the program, in return BakerRipley earned millions of dollars, a piece of that public money, originated through the federal government and distributed to Harris County.

The Harris County auditor’s note notes problems with oversight of the rental relief program. (KPRC-TV)

An outside company, Guidehouse, also examined the program.

The Harris County audit appears to confirm the findings, some of which are disputed by Baker Ripley.

Overpayments to landlords and payments to applicants who were already receiving funds through another source were cited in the review as sources of poorly managed public funds.

Harris County audit notes regarding the Harris County COVID-19 Rental Assistance Program. (KPRC-TV)
Millions of dollars have been paid to BakerRipley to run Harris County’s COVID-19 Rental Assistance Program (KPRC-TV)

BakerRipley responded to our request for comment by sending KPRC 2 Investigates a copy of its previous response to Harris County Auditor:

Dear Mrs. Perkins and Mr. Post:

This information is provided by BakerRipley in connection with the recommendations made by the Harris County Department of Internal Audit in its February 25, 2022 memo regarding the Evidence Oversight Report relating to the Harris County COVID-19 Rental Assistance Program operated by BakerRipley. We believe the information here provides additional context and a more complete picture of BakerRipley’s efforts and appreciate the opportunity to include it as part of the record.

Objective 1 Determine if there is adequate program oversight

Recommendation 1. BakerRipley provided responses to the Guidehouse monitoring report and worked with Guidehouse and Harris County to address the findings in “Report to Harris County, Texas DRAFT dated May 26, 2021.” As your report indicates, BakerRipley met with Guidehouse and Harris County on a regular basis to provide policies, procedures, process maps, and updates on the specific items identified in the Guidehouse report.

Objective 2: Provide back-up refund status from overpayment

Recommendation 2.1. BakerRipley has been providing Guidehouse updates on the pool of overpayments since the overpayments were first reported to BakerRipley. BakerRipley continued to provide updates throughout 2021. We have received a total of $203,481 in refunds through March 31, 2022 under selected categories, which will be included in our quarterly updates to Guidehouse and Harris County.

Recommendation 2.2 BakerRipley employees are required to send communications from the Rental Assistance Program’s SalesForce database system which automatically stores a copy of the correspondence. The former employee did not follow the standard communication procedure that was an anomaly. All messages have been sent and the mentor has been notified to send the messages. A copy of the sent messages is stored in the SalesForce database.

Recommendation 2.3 BakerRipley has completed its research and provided the following update: After reviewing the housing conditions of the 562 applicants, BakerRipley previously reported our findings at our February 8, 2022 meeting with the Harris County team of auditors, and then sent the file with the results on February 9, 2022. We did not find on any duplicate payments between applicants participating in the Federal Housing and Rental Assistance Programs.

Recommendation 3.1 BakerRipley has established an internal procedure to check contract requirements against the RAP database and rental assistance applications to ensure compliance with software requirements. We conduct weekly meetings with RAP team members and new policies and procedures are made available at that time. Written procedures, process maps, and policies are also updated at that time.

Recommendation 3.2 BakerRipley believes that our current accounting practices meet all generally accepted accounting principles. Ultimate liability for liability does not lie with BakerRipley, as described in the most recent amendment to the contract between BakerRipley and Harris County, and recording accruals (and corresponding provisions) would misinterpret the Agency’s financial position. We believe that systems and other internal controls are sufficient to track overpayments.

Recommendation 4 BakerRipley works with sub-recipients and provides the information and guidance needed to complete the tasks successfully. The information for RAP 2020 and the program rules and guidelines have been released by the US Department of the Treasury with frequent changes as the program develops. Program rules and guidance changes issued by Harris County and other local funders are integrated in real time along with changes and updates from the Department of the Treasury. To use a common analogy, we were building the aircraft in flight and did our best to communicate new expectations and requirements in a timely manner to all stakeholders.

Please let me know if you have any questions regarding the information provided. sincerely,

Barbara Shetter

Barbara Sheeter, Senior Director, Regional Initiatives, The Baker Ripley Company”

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