HARRIS COUNTY, Texas – A months-old Harris County Audit memo obtained by KPRC 2 Investigates reveals a series of problems with the administration of public funds in a Harris County Rental Assistance Program.
The program was designed to provide relief to both tenants and landlords by paying rent for Harris County residents, adversely affected by the COVID-19 pandemic.
Harris County hired BakerRipley, a non-profit organization, with experience in managing public assistance programs, to manage the program, in return BakerRipley earned millions of dollars, and a cut of those public funds, which originated through the federal government and were distributed to Harris County.
An outside firm, Guidehouse, also examined the program.
The Harris County Audit appeared to confirm the findings, some of which BakerRipley disputes.
Overpayments to landlords and payments to applicants who were already receiving funds through another source were cited in the audit as sources of mismanaged public funds.
BakerRipley responded to our request for comment by sending KPRC 2 Investigates a copy of its earlier response to the Harris County Auditor:
“Dear Ms. Perkins and Mr. Post:
This information is being provided by BakerRipley regarding the recommendations provided by the Harris County Internal Audit Division in its February 25, 2022 memorandum concerning the Guidehouse Monitoring Report related to the Harris County COVID-19 Rental Assistance program administered by BakerRipley. We believe that the information contained herein provides additional context and a more complete picture of BakerRipley’s efforts and we appreciate the opportunity to have it included as part of the record.
Objective 1 DETERMINE WHETHER THERE WAS PROPER PROGRAM OVERSIGHT
Recommendation 1. BakerRipley has provided responses to the Guidehouse monitoring report and has worked with Guidehouse and Harris County to address the Findings in the “Report to Harris County, Texas DRAFT dated May 26, 2021.” As your report indicates, BakerRipley has met with Guidehouse and Harris County on a regular basis to provide the policies, procedures, process maps, and updates on the specific items identified in the Guidehouse report.
Objective 2: PROVIDE A STATUS OF BAKERRIPLEY’S RECOVERY OF OVERPAYMENTS
Recommendation 2.1. BakerRipley has been providing updates to Guidehouse on the collection 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 within the categories identified, 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 our standard communications procedure which was an anomaly. The letters were all sent and Guidehouse was made aware that the letters were sent. A copy of the letters that were sent have been stored in the SalesForce database.
Recommendation 2.3 BakerRipley has completed its research and provides the following update: After reviewing the 562 applicants’ housing situations, BakerRipley previously reported our results in our meeting on February 8, 2022 with the Harris County Auditors Team, and then sent the file with the results on February 9, 2022. We did not find any duplicate payments between the applicants participating in Federal housing programs and the rental assistance program.
Recommendation 3.1 BakerRipley has created an internal procedure to verify the contract requirements against the RAP database and rental assistance applications to ensure alignment with program requirements. We conduct weekly meetings with RAP Team members and new policies and procedures are provided at that time. Written procedures, process maps, and policies are also updated at that time.
Recommendation 3.2 BakerRipley believes our current accounting practices meet all generally accepted accounting principles. The ultimate responsibility for the liability does not lie with BakerRipley, as reflected in the most recent contract amendment between BakerRipley and Harris County, and recording receivables (and the corresponding allowances) would misrepresent the financial position of the Agency. We believe other internal systems and controls are adequate to track the overpayments.
Recommendation 4 BakerRipley does work with their sub-recipients and provides the needed information and direction to complete the tasks successfully. The information for RAP 2020, program rules and guidelines, were issued by the US Treasury Department with frequent changes as the program evolved. Program rules and guideline changes issued by Harris County and other local funders were incorporated in real time along with changes and updates received from the Treasury Department. To use a common analogy, we were building the plane while we were flying it and made every effort to communicate new expectations and requirements timely to all stakeholders.
Please let me know if you have any questions regarding the information provided. Sincerely,
Barbara Schetter Sr. Director Regional Initiatives BakerRipley”