Rent assistance funds tied up due to ongoing dispute

Today the Thurston Board of County Commissioners (BoCC) voted to begin a contract with a Seattle-based tech company to continue the tasks associated with distributing the balance of what started as $28 million in federal and state rent and utility assistance funds.

The action came 13 days after the BoCC suspended the contract with the Community Action Council of Lewis, Mason & Thurston Counties (CAC), a local nonprofit organization that had already distributed more than two-thirds of the funds. 

Kirsten York, chief executive officer of CAC, provided a written statement to The JOLT today that confirmed that no payments have been made since the contract was suspended on Wed., Feb. 23 to any of the remaining 1,269 households whose applications for assistance were in process.

There have been no formal talks between the county and the CAC, according to Thurston County Auditor Mary Hall, who has taken over negotiations with CAC at the request of the BoCC. 

The new agreement is with Geocko Inc. d.b.a. LiveStories, which provides similar rent and utility fund distribution services for the City of Spokane, and Skagit and Yakima Counties. LiveStories is also "under contract with Washington State Department of Commerce to provide support for its oversight of rent and utility assistance programs," according to Thurston County's press release today. The Department of Commerce received the Emergency Rental Assistance (ERA) funds from the federal government and distributed them to Washington's 39 counties.

What is the dispute about?

Thurston County conducted what it called a "review" of CAC's ERA work from Nov. 29, 2021, through Jan. 4, 2022, and issued a report on Jan. 24 that requested CAC respond to several "recommendations to improve program compliance and internal controls."

While the Jan. 24 report stated that the CAC work was "generally operating in accordance with state and federal guidelines," it did identify several areas of concern to the county's internal auditor, including describing five specific examples of "potentially fraudulent payments." Despite describing the county's requests as "recommendations," they were not suggestions but requests. 

Pushback from CAC

CAC pushed back against the recommendations in a one-page letter on Feb. 14, claiming that "Each recommendation … is contradictory to the continued, consistent guidance/interpretation and technical assistance CAC has received from TC County staff" prior to Jan. 24. Further, CAC claims that the county's requests could put applicants' personal data at risk.

In her statement today, York stated that "the County has indicated that they have released, and intend to release, client data to law enforcement." York said she has requested "assurances in writing" that the county will protect applicants' data and that she has sought to negotiate a new transitional contract with the county so that it could lift the suspension and enable CAC to resume work. She restated that "no payments were made to anyone who is ineligible."

York said that CAC has reached out to the Washington State Department of Commerce, "is communicating" with them related to these events, and "complying with any requests for communication and mediation."

The county's position

"We don't have any reason to believe that CAC has committed fraud. I want that to be very clear," County Auditor Mary Hall told The JOLT yesterday, adding "but there were, in a fairly small sampling, a lot of red flags went up for my internal auditor." 

Fraud, and preventing it, was the target of the review and Jan. 24 report. The county made four requests (recommendations) of CAC, all designed to minimize opportunities for fraud to occur. In addition, Hall said, "we asked them to … take a deeper dive on some of the applicants we saw and they have not responded."

"I have had no communication with [CAC] except via emails," since Jan. 24, Hall said. "But they just keep asking more questions and requiring things of us. And that's not how audits work. We asked for them to address specific things … They came back to us asking us to write all of these procedures. And that's not how audits work. If you were to do that to the IRS, how do you think they would respond?"

Hall continued: "So we have also asked for additional data for the people who are in the process of getting checks cut, and they're not providing that either. So I have some concerns that the people [who] need to be served are not being served. And really, it's our data, it's our contract with them. And so they really have no right to withhold that information from us."

Detailed information about applicants is what CAC is specifically objecting to provide to the county, claiming that it is confidential between the applicants and CAC. 

Fraud investigation

According to Sheriff John Snaza, the county auditor referred fraud claims to the Thurston County Sheriff's Office for further investigation. "I interviewed one of the internal auditors [from] Thurston County, and he expressed to me information that is pertinent to an investigation And so I felt that based on the information he provided that this required more of an in-depth investigation," Snaza told The JOLT today.

He contacted the Federal Bureau of Investigation (FBI) to dig deeper into the county internal auditor's findings. Asked why he contacted the FBI instead of the State Auditor, Snaza said he was aware that "CAC did file a complaint with the State Auditor's Office" about the suspension of its agreement with the county. Further, "the state auditor never reached out to me."

More about the transition

On the Thurston County Public Health and Social Services Facebook page, the county posted a link to a document titled “Final Rent Assistance Update 03-09-22” that specifies that its new agreement with LiveStories is expected to be finalized “in the next 1-2 weeks.” It further states that “the program will be operational” by early April and which applications will be prioritized.

The document also states that the county intends to offer contracts to four specific local organizations to provide intake services. It also notes that the county continues to have active contracts with CAC for rapid rehousing and two other programs.