During a review of the Emergency Rental Assistance Program (ERAP), Jacksonville’s Office of Inspector General (OIG) reported that it uncovered five previously unreported cases of fraud involving more than $314,000. The OIG has referred those five cases to state and federal prosecutors for criminal prosecution.
The ERAP funds could be used for payment of rent or utilities or other housing expenses that were incurred directly or indirectly because of the COVID-19 outbreak. A report detailing the OIG’s review of ERAP says the City of Jacksonville appropriated $72,399,077.67 of ERAP funds from the U.S. Department of Treasury from March 2021 through March 2023.
The most notable fraud case, according to the OIG report, involved a single landlord associated with 49 tenant applications. Of those, 13 were approved, resulting in that landlord receiving $217,389.25 in ERAP funds. The funds were disbursed by three different subcontractors hired by the city to disburse ERAP funds. One of the contractors had paid on three applications before identifying potential fraud and halting additional payments.
The OIG review also found that the organizations that were receiving ERAP funds to disburse didn’t have adequate systems to identify cases of fraud and failed to report suspected and identified cases of fraud to the OIG, city of Jacksonville or law enforcement.
The report also noted that in August 2023, the software platform used for the applications, Neighborly, provided a notice of document destruction to the company that was contracted to manage the software. While the city contractor did receive a final extract of ERAP customer data, the OIG discovered that the data was in a raw format, and did not include PDF files of ERAP applications with signatures. As a result, city investigators said they could not complete additional investigations into potential fraud because the customer data was either missing or unusable for investigative purposes.
The OIG said the city should have assessed whether the groups receiving the funds could adequately provide the services and should have monitored their performance and kept records.
After its review, the OIG recommended six corrective actions, including allocating funds for adequate record retention, requiring city contractors to complete and provide proof of fraud detection training, and ensuring city contractors promptly report suspected and identified cases of fraud.
The full report is available on the inspector general’s website.
To report fraud, waste, and abuse, contact the OIG at 904-255-5800 or InspectorGeneral@coj.net.
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