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McHenry Demands More Robust Oversight of ERA Programs in Letters to Yellen and Treasury’s OIG
Washington, Feb 14 -
Today, the top Republican on the House Financial Services Committee, Patrick McHenry (NC-10), sent letters to Treasury Secretary Janet Yellen and Deputy Inspector General of the Treasury Department Richard Delmar regarding oversight of the Emergency Rental Assistance (ERA) programs. The letters blast Treasury’s willful neglect of oversight of the ERA programs and urge Treasury and the Office of the Inspector General (OIG) to apply the bipartisan, common-sense oversight process established in the Consolidated Appropriations Act of 2021 to all ERA funds. Read the full letter to Treasury Secretary Yellen here. Read key excerpts from the letter to Treasury Secretary Yellen: “Dear Secretary Yellen: “I write to you concerning the Department of Treasury’s (Treasury) continued mismanagement of two COVID-19 emergency rental assistance (ERA) programs. Congress’s effort to provide relief for renters affected by COVID-19 has been undermined by Treasury’s inability to establish clear, consistent, or conclusive rules regarding the operation of the original Emergency Rental Assistance program (ERA1) established in the Consolidated Appropriations Act of 2021 (P.L. #116-260) in December 2020 and the second Emergency Rental Assistance program (ERA2) established in the American Rescue Plan Act of 2021 (P.L. #117-2) in March 2021. As a result, absent additional action by Treasury, there is an increased likelihood that limited ERA dollars will be wasted instead of used for their intended purpose of eliminating the back rent of COVID-impacted low-income renters. “Of particular concern is Treasury’s inability or refusal to establish essential basic anti-fraud and auditability controls governing the use of funds by eligible grantees. This problem has been well-known for some time. Last month, the Government Accountability Office (GAO) released its 9th comprehensive report on the federal government’s COVID-19 response entitled “COVID-19: Significant Improvements Are Needed for Overseeing Relief Funds and Leading Responses to Public Health Emergencies” (the Report). … “Exacerbating these concerns are several statutory deficiencies present in the $21.55 billion ERA2 program that are not present in the initial $25 billion ERA1 program. These deficiencies mean there is less clarity, transparency, and accountability in ERA2, placing those dollars at a heightened risk of fraud and creating an urgent need to prevent it. … “Given the documented lack of processes within the ERA programs to allow for timely identification of potential fraud and efforts to mitigate those risks, it is incumbent upon Treasury to take several steps to ensure payment integrity and increase auditing of grantee compliance.” Read the full letter to Treasury Deputy Inspector General Richard Delmar here. Read key excerpts from the letter to Treasury Deputy Inspector General Richard Delmar: “Dear Mr. Delmar: “Congress entrusted your office with a broad array of oversight responsibilities with respect to the administration of COVID-19 relief programs, including the first iteration of the Emergency Rental Assistance program (ERA1). Pursuant to the bipartisan Consolidated Appropriations Act of 2021, which was signed into law in December 2020, the Office of Inspector General is empowered to engage in oversight, monitoring, and recoupment activities for the $25 billion that Congress appropriated to assist vulnerable rental households unable to pay rent, utilities, and other housing-related expenses and arrears due to the COVID-19 pandemic. The second tranche of $21.55 billion of Emergency Rental Assistance (ERA2), which was included in the partisan American Rescue Plan Act enacted in March 2021, was not similarly subject to recoupment activities by your office, among other things. “In light of recent findings by the Government Accountability Office (GAO) highlighting fraud risks associated with the emergency rental assistance programs, I am writing to request that you conduct similar oversight, including the recoupment of ERA2 funds as appropriate and commensurate with ERA1. Relatedly, I have issued a request to the Secretary of the Treasury to cooperate on a voluntary basis and in a manner that will allow your office to conduct oversight of ERA2 using the same tools and data that were made available for ERA1. … “The discrepancies between the oversight frameworks for ERA1 and ERA2 (and the fact that ERA2 funds were made available through September 30, 2025) raised concerns that Democrats in Congress intended to position the Biden Administration to bestow emergency rental assistance funds on grantees to use for purposes beyond those enumerated in the statute. Since then, Treasury has failed to implement processes for grantee monitoring. Moreover, it has taken a position that denies the correlation between administrative flexibilities and risk. The Department’s posture towards oversight of emergency rental assistance grantees supports our concerns. “Please advise as to whether your office has access to the data and resources it needs to conduct oversight and recoupment activities for ERA2 funds in a manner similar to ERA1, and whether your office intends to do so. Thank you for your attention to this important matter.” ###