1. The Clark County CARES Housing Assistance Program was launched in response to the pandemic. How much was paid to people and how much of it was fraud?
A: Called CHAPS, this was funding from the federal CARES Act to help people pay their rent, mortgage and utilities during the pandemic. Remember, unemployment was at 20% in the Las Vegas area.
The state, the cities of Las Vegas, N Las Vegas and Henderson gave their portions of federal funds — $130 million — to the county to be Southern Nevada’s one-stop shop for housing help.
In total, Clark County made $373M in disbursements between Fiscal Year 2021 and 2023.
2. Was it intentional fraud or human error?
A: Both. The average rent assistance payment was $5,655, and 87% of cases were for under $10,000.
Like many other Covid-era assistance programs, rules were lax, the government wanted to get money out to people quickly. They were flexible with what documents someone would submit with their application, so that left room for say, a lease being forged with inflated rent.
They allowed applicants to “self attest” to their household income — no W2 or pay stub required — and self-attest to their pandemic impact – say, if they lost their job.
There were 4 cases where a tenant received between $39,000 and $50,000 — 12 months, 18 months arrear paid directly to the tenant. These happened when staff didn’t resolving errors where they saw discrepancies in names or employers, or people had a drivers license or address in a different state — things they should have caught and questioned.
There were some fraud prevention controls and as the program evolved, the county added more.
The county also hired a staffing company to help process these applications and in one case, a staffing employee received an improper CHAP payment.
3. Have the issues been fixed and assuming this program no longer exists, how can people get housing assistance?
Back in 2022, the county had created a fraud review team and they logged cases with suspected fraud and made a list of suspended landlords, so with this audit, they reviewed the suspected fraud cases.
There were 3,752 entries in the fraud log and the bulk of the cases suspected of being fraudulent did not get paid.
About 6% of the cases on the fraud log were paid for a total of $3.2 million.
Talking about the fraud uncovered in this audit, Social Services Dept said, they no longer allows direct-to-tenant payments for any of their rental assistance programs. If they ever do resume paying tenants directly, they will follow the audit recommendation that cases first be referred to the fraud team before being approved. (p.22)