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McHenry Slams Treasury for Leaving ERA Programs Vulnerable to Fraud and Abuse, Following GAO Report

Washington, Feb 10 -

Today, the top Republican on the House Financial Services Committee, Patrick McHenry (NC-10), issued the following statement following the Government Accountability Office’s (GAO) release of a new report outlining Treasury’s failure to conduct basic oversight of the Emergency Rental Assistance programs. Republican Leader McHenry requested this GAO report in a letter last year.

“As I said last month, and GAO reaffirmed today, Treasury has failed to conduct basic oversight of billions of dollars of ERA funds,” said Republican Leader McHenry. “It’s clear the Biden Administration is unserious about detecting and preventing fraud in the ERA programs. This is irresponsible, and means COVID-impacted, low-income renters will have to compete with fraudsters for the funds Congress approved to pay off their back rent. These GAO findings show the Biden Administration’s handling of ERA has gone from incompetent mismanagement to willful neglect, while renters and property owners continue to struggle.”

Read the full report from GAO here.

Key findings from GAO’s report:

• "We determined that the risk assessment and monitoring components of internal controls were significant to the objective...However, Treasury has yet to implement monitoring procedures needed to manage increased risks..."

• "[Treasury] has not yet developed or implemented procedures to monitor or evaluate grantees' required controls, consistent with federal internal control standards... [and] did not believe there was an established connection between the use of self-attestation and increased risks of noncompliance, improper payments, and fraud in the ERA program that would necessitate further oversight..."

• "Without such monitoring and evaluation, Treasury cannot have reasonable assurance that grantees are meeting program requirements or effectively managing risks... [and] the absence of monitoring procedures and grantee compliance data has delayed oversight efforts by Treasury’s Office of Inspector General."

• "...Treasury has not yet assessed improper payment risks in the ERA program or the extent to which grantees have met its requirement to employ additional validation and fraud-prevention procedures. These steps are necessary for assessing risks to the ERA program..."

Republican Leader McHenry is leading the fight to protect America’s renters:

On April 14, 2021, Republican Leader McHenry introduced H.R. 2526 to enhance accountability of the financial services portions of Democrats’ so-called American Rescue Plan (ARP), including the Emergency Rental Assistance program. This legislation would increase transparency into these portions of the ARP by bringing them under the same bipartisan oversight structure of the CARES Act.

On May 18, 2021, Republican Leader Patrick McHenry(NC-10) sent a letter to Treasury Secretary Yellen asking for data on how much ERA money has reached renters and landlords. Month after month, the numbers showed an abysmal rollout of relief funds.

At a June 9, 2021 hearing on housing issues, Republican Leader McHenry called out the Biden Administration for their gross mismanagement of the ERA programs.

On June 15, 2021, Republican Leader McHenry sent a letter to the GAO asking them to audit the ERA programs.

On June 25, 2021, Republican Leader McHenry and French Hill (AR-02), the top Republican on the Subcommittee on Housing, Community Development, and Insurance, released a statement denouncing the Biden Administration’s shortsighted extension of the eviction moratorium.

On July 13, 2021, Republican Leader McHenry sent a letter to Chairwoman Maxine Waters (CA-43) demanding that Treasury Secretary Yellen testify alongside Housing and Urban Development (HUD) Secretary Fudge to answer for the mismanagement of the ERA programs.

On August 4, 2021, Republican Leader McHenry sent a letter to Chair Maxine Waters again urging her to convene a hearing with Treasury Secretary Yellen to hold the Administration accountable for its mismanagement of the ERA programs and find a permanent solution to pay off renters’ back rent.

On August 6, 2021, Republicans on the House Financial Services Committee and Energy and Commerce Committee, led by Republican Leaders Patrick McHenry and Cathy McMorris-Rodgers (WA-05), sent a letter to Speaker Nancy Pelosi (CA-12) demanding she bring the House back to work to find a permanent solution for tenants at risk of eviction.

On August 28, 2021, Republican Leader McHenry issued a statement in support of the Supreme Court’s decision to strike down President Biden’s unconstitutional eviction moratorium and again pushed Congress to permanently address the mismanagement of ERA funds.

On September 14, 2021, Republican Leader McHenry outlined how Democrats’ partisan ERA reform bill would slow the pace of relief to renters and property owners at a Committee markup. Democrats’ have not brought their unworkable legislation to the House Floor for a vote.

On January 27, 2022, Republican Leader McHenry issued a statement again slamming the Biden Administration mismanaging the ERA programs following news reports and GAO findings outlining Treasury’s failure to properly administer the programs, as well as calling for an investigation.

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