The California state auditor revealed that the state is at risk of losing billions of dollars in emergency rental funding as the deadline to send funds to applicants approaches.
“In August 2020, we designated the State’s management of federal COVID-19 funds as high risk after concluding that the likelihood of mismanagement of these funds is great enough to create substantial risk of serious detriment to the State and its residents,” State Auditor Elaine Howle said in a Sept. 16 report.
“HCD remains at risk of losing federal funds, and it must employ every effort possible to increase its amount of funds obligated before the federal deadline of Sept. 30, 2021.”
The Department of Housing and Community Development (HCD) oversees administering $1.8 billion of rental assistance benefits to renters who face eviction. With the deadline approaching, the audit raises concerns about eligible household applicants that won’t receive funding.
“Because of the looming deadline and effect it may have on the State if critical requirements are not met, it is important to issue the first report of our audit to notify you of the urgent risks of losing federal funds that the State faces,” Howle wrote.
“Although HCD is making significant progress toward meeting the first federal deadline, it must commit additional benefits to eligible households in order to reduce the State’s risk of losing millions of dollars in federal funds for this program at the end of September 2021.”
HCD Director Gustavo Velasquez told The Epoch Times the audit fails to acknowledge that the state is not at risk for losing the federal funding, as it is anticipated that the program will meet the 65 percent obligation threshold prior to Sept. 30.
“With more than $1 billion in rent relief headed out the door and $526 million already distributed, the California Department of Housing and Community Development fully expects to meet the benchmarks for federal funding for rent relief,” Velasquez said.
Russ Heimerich, a spokesman for Consumer Services and Housing Agency, told The Epoch Times there’s no fear federal funding will be lost, as more than $14 million is approved for payment every day.
“By Sept. 30, all of our round-one funding for the state program is going to be either paid or in the pipeline for payment,” Heimerich said. “On Oct. 1, we’re going to have to start using round-two funds because the round-one funds will all have been obligated.”
He said the funds are meant to be sent out to renters within 30 days from the time an application is submitted.
Despite the department stating they’re on time with allocating payments, tenants have raised concerns over waiting months to receive their funding.
Diane Robertson, a founding member of Coalition of Small Rental Property Owners, told The Epoch Times in a previous interview that tenants haven’t received financial assistance in July despite applying in March.
“It’s the landlords who are not receiving that income on which they are relying,” she said.
As of Sept. 13, 243,154 applications have been received and over $500 million funds have been paid through the COVID-19 rent relief program.