Leaked Audit Report exposes major corruption within a multimillion-dollar county rental assistance program.
HARRIS COUNTY, TX — Harris County Administrator and Budget Officer David Berry resigns shortly after an audit report is leaked, exposing major corruption within a multimillion-dollar county rental assistance program.
The rental assistance program (RAP), organized through nonprofit BakerRipley, was passed by Harris County Commissioners Court on June 30, 2020, during the peak of the COVID pandemic.
The BakerRipley RAP was established in the amount of $15 million, and in July 2020, Harris County permitted BakerRipley to administer the program. The next month, the RAP was amended, increasing the total amount to $40 million.
The RAP assisted Houstonians with past-due rental payments and associated expenses occurring after April 1, 2020. While it originally aided applicants from April through August of 2020, for up to $1,900, this assistance was extended.
This extension, initiated on November 10, 2020, assisted applicants for past-due payments from September to November 2020. Citizens could apply to receive the RAP for both periods, April through August, and September through November, receiving up to $3,800 in rental forgiveness.
As a multi-million-dollar county expenditure, Harris County contracted Guidehouse to perform an audit on the BakerRipley RAP. This audit included compliance monitoring from September 14, 2020, through March 24, 2021.
The findings, leaked only days ago by The Houston Comical, were staggering.
Guidehouse’s six-month investigation revealed shocking volumes of disorganization and misconduct with the taxpayer dollar during the height of a global economic downturn.
The BakerRipley RAP neglected to thoroughly examine applicants and ensure that they qualified for rental forgiveness. It also overpaid landlords in the amount of over $200 thousand, and only recorded recouping about half of that.
The rest, a copious amount of money, seemingly vanished, hinting ominously at potential embezzlement.
The following is an excerpt from Guidehouse’s audit report, provided by The Houston Comical.
Our work included documentation request(s), interviews and file testing. Based on our review and observations during the monitoring period, Guidehouse (or “the monitoring team” or “GMT”) performed testing and identified the findings and concerns listed below.
The report includes high level results, which are categorized as Findings and Concerns. A Finding is a violation of a statutory, regulatory or program requirement for which sanctions or other corrective actions may be issued. A Concern is a deficiency in program performance not based on statutory, regulatory or other program requirements.
The County should work with the administrator to resolve findings by identifying a corrective action plan and recoupment of improper payments. If a finding or concern is not adequately addressed by the administrator, it could present future risk to the County, up to and including, recoupment of funds.
- High Level Summary – Findings and Concerns
The GMT performed reviews, the scope of which included BakerRipley’s system(s), processes, and file reviews. If a formal response from BakerRipley to the findings identified in this report was not received, as of the date of this report, the findings remain open, and the County should work with the administrator to determine the corrective action taken. This high-level summary is meant to summarize the findings and concerns. Please review the Detailed Findings and Concerns for a more comprehensive explanation.
1 See Appendix A 2 Associated expenses include trash, water, sewer, pet rental, etc
5 a. Findings
3 i. Policies and procedures were incomplete
- The policies, procedures, and workflows did not include the verification of (per County program guidelines): (a) Proof of Unpaid Rent (b) Eligibility/Proof of Age © Eligibility/Participation in other Housing Programs
- The payment process led to overpayments to landlords. The process did not allow time for the landlords to review and confirm the rental assistance payment before it was disbursed. Payments for months not owed, and overpayments could have been reduced or prevented.
207 landlords were determined to have been overpaid for a total of $203,417.
BakerRipley had recouped $108,458 of the total as of last reporting. The GMT did not receive an updated overpayment report, nor do we know the total overpayment or recouped amounts.
iii. Accounting of Overpayments. BakerRipley did not follow proper GAAP accounting principles regarding landlord overpayments. BakerRipley recorded the receipt of funds when the overpayment was refunded by the landlord but did not record the receivable in their accounting system once they were informed by the landlords that they had been overpaid.
As a result, BakerRipley did not have an accurate record of their Accounts Receivables.
- Applicant File Documentation. BakerRipley did not always ensure all documents in the files were present in the applications, or that they were properly completed. The table below summarizes the file review of 289 files in which assistance was provided.
Following the leak of Guidehouse’s audit, concerned citizens and investigative journalists approached Harris County Commissioners Court and Harris County Administrator and Budget Officer David Berry.
The following is a recent email to Berry, sent by journalist Merissa Hansen.
Berry was responsible for overseeing the financial wellbeing of Harris County and the day-to-day operations of its departments. He worked closely with the Commissioners Court, to whom he’d report.
Prior to his stint as county administrator and budget officer, Berry worked in the private sector with a specialized interest in the renewable energy industry.
“Once the Democrats in Harris County took control, they brought on PFM Group Consulting for ‘governmental reorganization,’” The Houston Comical reported.
“As of right now, the county has paid out millions to PFM… David Berry’s position was brought on by PFM Group Consulting, [which] holds strong ties to Brookings Institute and the DNC. The CEO, David Eichenthal, has called for the defunding of the police, and is a big proponent of P3 partnerships.”
“P3 partnerships,” or public-private partnerships, are partnerships between governments and the private sector to build public infrastructure, or to deliver projects and services.
Critics of P3 partnerships refer to them as “chop shops for private entities.”
Berry was brought into the government through PFM in a party-line Democratic vote.
“Yesterday, I emailed David Berry about the audit which was given to me by a dear friend. I forwarded the documents to David Berry, and this morning he resigned. David has been in charge of all the ARPA FUNDS,” Hansen wrote.
“He basically has been the Democrats’ money man, and whatever they wanted, he would say yes. David was so diabolical, he floated the idea of punishing county employees for not taking COVID tests, which cost the county a ballpark of $2 million a month.”
“David was in charge of all the money which went to these NGOs. When I spoke with the auditor, he told me he had raised concerns with David in which David shrugged him off. I’m sure this had nothing to do with Berry’s resignation.”
Berry abruptly resigned from his position as Harris County Administrator and Budget Officer in an abrupt email to the Commissioners Court, citing his motivation as a new job offer in the energy sector. He provided less than a month of notice.
This is a developing story. Visit KatyChristianMagazine.com frequently for additional updates.
