Now-suspended rent support program generally compliant with state laws

Thurston County suspended its contract on Feb. 24 with the Community Action Council of Lewis, Mason & Thurston (CAC), and stated that it has reported  suspected fraud to the Washington State Auditor.

Thurston County's internal audit review dated Jan. 24 on the CAC's Emergency Rental Assistance (ERA) found that the program is "generally operating in accordance with state and federal guidelines."  The  county contracted with CAC to distribute some $28 million in federal and state funds to assist renters. Approximately $8 million remains to be distributed. 

The county's internal audit review stated that ERA's compliance to state and federal guidelines could be improved through enhancing fraud prevention procedures and internal controls.

The audit review also included the county's recommendations to CAC, including completing follow-ups on the questionable payments, updating ERA policies, and providing formal training to all staff.

Results of the county's internal audit review were sent to CAC January 24, and the full document is  posted on CAC’s website. Brandon Weber, Thurston County's internal auditor, signed  the findings and recommendations letter.

The audit report also stated that six out of the 14 rental applications that were reviewed raised red flags indicative of potential fraud. CAC put on hold two of the six applications pending a request for more information.

Weber's report specifically itemized the following five potentially fraudulent payments: 

1. "One payment was mailed to the address provided by the landlord. The resident who lived where the check was mailed called CAC and communicated that they did not know the payee on the check, that the person did not live there, and that they would return the check.
2. "One payment was made where the renter and a landlord indicated that they lived at different units in a duplex, with A and B units. In a review of the assessor's website, the property address was a manufactured home and did not have separate units.
3. "One payment was made for a house that was rented in 2020, but according to the assessor's website was not built until 2021. Additional research with the City of Tumwater found that the Certificate of Occupancy was not issued until summer of 2021, more than a year after the property was allegedly rented. This same landlord had also received previous payments from other rental assistance applications.
4. "One payment was made for a property address that could not be located through an internet search of the county assessor's website.
5. "One payment was made to a landlord that did not have a documented connection to the property. This file contained other red flags, such as an applicant with no income who did not request utilities or any other housing assistance. Additionally, the lease was from 2016 and there was no other documentation that tied the applicant to the property address."

CAC wrote that it had performed some follow-up with the applicants and landlords mentioned in the said scenarios, but they had not received any additional information by January 24.

CAC's response

Reached this afternoon, CAC CEO Kirsten York told The JOLT only this: “Staff are currently in the process of deciding next steps to care for clients during this time. Our priority is maintaining confidentiality and maintaining excellent client service. We will have more information next week.

In response to the county's internal audit review, CAC clarified that the County approved all their protocol and processes in the ERA program before the actual implementation and execution.

"Each recommendation as outlined in your letter is contradictory to the continued, consistent guidance/interpretation and technical assistance CAC has received from TC County staff up to this point," York's response letter read.

York also wrote that responding to the audit's recommendation with a plan for implementation puts CAC in a "difficult position of being misaligned with our contract oversight."

Some details of the recommendations, York explained, do not reduce the barriers for clients to access their services.