Dozens of Nebraska non-profit were told they were receive grants for helping homelessness. But the program doesn’t work

OMAHA, Nebraska — Tanya Gifford of Lift Up Sarpy County was ecstatic to discover in the summer that her organization was granted $1 million to combat homelessness in a community still afflicted by the epidemic.

However, her and perhaps fifty other Nebraska organizations’ joy was short-lived.

State officials told the group last week that a total of $15.5 million in housing stability program grants that had been destined for their organizations would not come.

Due to uncertainty over deadlines, the state must now return to the U.S. Treasury the cash intended for Lift Up Sarpy and others.

“We’re disappointed,” Gifford stated. “The one million dollar gift was enormous for us. We are forfeiting the opportunity to assist so many families.”

‘Welfare state’

She saw the loss as the latest setback in the often-controversial narrative of the federal Emergency Rental Assistance Program, which the administration of Governor Pete Ricketts has overseen for all but two of Nebraska’s 93 counties.

Ricketts’ rejection of a second round of emergency rent help, despite the Legislature’s attempt to compel him to take the $120 million, heightened the issue early this year. This money was put aside by the federal government for struggling tenants in the state’s 91 smaller and rural counties.

Ricketts asserted that the worst of the COVID outbreak had passed and that Nebraska must avoid becoming a “welfare state.”

There were insufficient votes to overcome the governor’s veto.

Slowly, the Ricketts administration had already accepted and begun to distribute the first tranche of ERAP funds.

(Douglas and Lancaster Counties, as well as the cities of Omaha and Lincoln, apply for and manage their own ERAP funding streams independently of the state program.)

The Ricketts administration shifted $97 million of the state’s initial installment of $158 million for the 91 counties, primarily to Omaha and Lincoln, citing increased demand in the state’s bigger urban metropolitan cities.

Fund distribution update

According to the Governor’s office, the state rental assistance program:

* Approximately $26 million was distributed to qualifying renters and landlords in the state’s 91 smaller counties.

* Paid Deloitte, an audit and risk management consulting firm, about $10.4 million for administrative support relating to the program.

Approximately $20 million remained.

The $15.5 million for housing stability services was to be derived from the $20 million in unspent funds. The Nebraska Department of Health and Human Services informed community organizations vying for the funds that direct rent assistance was not permitted, but that eviction diversion programs and housing-related services for survivors of domestic abuse were.

After contacting the selected organizations in mid-August to inform them they would get a share of the funding, state authorities conducted a virtual meeting last week to inform them the money had to be returned to the U.S. Treasury.

Aides to the governor attributed confusion to “late” direction adjustments by the Treasury, which required the state program to not only assign, but also spend the entirety of the first cash tranche by September 30, 2022.

Use it or lose it

“These late changes will eliminate the ability for the State to enter into $15.5 million in contractual obligations with housing stability providers,” Ricketts spokeswoman Alex Reuss told the Nebraska Examiner.

Furthermore, she said, qualified renters and landlords who had applied and essentially were pre-approved for emergency rent and utility aid through December would not get that aid beyond Sept. 30.

There is a simple solution to the problem — there always has been.

– Erin Feichtinger, Women’s Fund of Omaha

Lee Will, administrator of the Nebraska budget, had reached out to Treasury authorities in an effort to rectify the problem. However, a letter from the Chief Recovery Officer of the federal agency, Jacob Leibenluft, outlined a timeline of guidance and correspondence that implies the state should not have been surprised by the September 30 use-it-or-lose-it deadline.

In his letter to Will, Leibenluft proposed what a number of Nebraska housing groups see as a solution. He stated that the state might still take a portion of the second round of rental assistance, despite the governor’s months-long opposition.

Liebenluft stated that the State of Nebraska could quickly take measures to prevent any potential harm to renters and landlords. However, instead of $120 million, just $48 million would be available in this second round.

“Treasury is prepared to provide up to $48 million in available award monies to the State of Nebraska… to fund potential rent and other housing stability services,” Leibluft stated.

In response, the governor’s spokesman restated Ricketts’ previous position.

The issue was “extensively discussed and argued” throughout the legislative session, according to Reuss. The state will not apply for the second funding round.

‘Cumbersome’ portal

Housing Foundation for Sarpy County’s Carolyn Pospisil is frustrated by the situation.

Her organization intended to use a $230,000 grant to reconnect with around 900 individuals who had previously received emergency rent assistance.

Prior to learning that the money would not be forthcoming, the Housing Foundation had employed two staff members to develop a new outreach program offering budget counseling and other services to help families remain financially stable.

Pospisil contested the governor’s claim that Nebraskans do not require rental aid due to the state’s low level of support.

She argues that a “cumbersome and convoluted” portal system built by state vendor Deloitte to vet candidates was primarily responsible for the low participation rate.

Pospisil stated that as an alternative, her organization decided to use around $1 million in charitable donations to address emergency rent needs for inhabitants of Sarpy County. She stated that the private source of funding had dried up.

Women’s Fund of Omaha policy director Erin Feichtinger has been campaigning for extra rental assistance funds for months. She sees another opportunity in the message from the Treasury Department to Will.

She asserts that the citizens of Nebraska’s 91 rural and smaller counties will suffer the most.

“There has always been a simple answer to the problem,” she stated.

Housing crunch amplifies stress

Liz Mayfield of Hope Harbor in Grand Island, Nebraska, stated that the lack of public transportation and other support services creates additional obstacles for families affected by the epidemic in central Nebraska.

She said that all but two of the shelter’s rooms are occupied. Due to the lack of rental housing in the neighborhood, homeless families that are prepared to take the next step cannot leave the shelter, according to Mayfield.

She stated, “There is so much rivalry for housing units.”

Mayfield intended to use a $124,000 award from the state rent program to mitigate factors that may contribute to homelessness. In a town without public transportation, she explained, assistance with car maintenance is crucial, as a breakdown can lead to job loss and eviction.

Mayfield stated that she does not consider the grant error to be in any way intentional. She hopes the state will reconsider and approve the second round of emergency rent assistance.

She stated, “This is just another indication that Nebraska made a mistake by not accepting them.” It is being done from a position of privilege and ignorance of the true situation on the ground.

Gifford, of Lift Up Sarpy, provided her rapidly expanding, affluent county as an illustration of how the impact of the epidemic on some families may be hidden from public view.

She added there are no emergency shelters in Sarpy. She stated that low-income housing is difficult to find, and that inhabitants are frequently forced to go to Douglas County for services.

“This week, I have three veterans and four families staying in hotels while they wait for housing to become available,” she said.

State contractor was paid $10.4 million

A private contractor engaged by the State of Nebraska to assist in the distribution of federal emergency rent assistance “identified” approximately $23 million in suspicious applications for assistance. This is close to the total amount actually awarded to renters in need during the vendor’s contract.

A spokesperson for Governor Pete Ricketts stated that Deloitte examined and approved around $26 million in submissions before the Emergency Rental Assistance Program terminated on September 30.

The objective of the program was to prevent pandemic-related evictions in 91 of Nebraska’s 93 counties. Douglas County and Lancaster County residents were served by distinct programs.

Alex Reuss, the governor’s spokeswoman, reported that the state has paid Deloitte $10,400,000 to oversee the program thus far. The contract authorized administrative capacity costs of up to $15.8 million, or 10% of the state’s original grant.

Even if approximately $97 million of the initial $158 million award was moved to initiatives in jurisdictions beyond the 91 counties, Reuss stated that the restriction remained.

Reuss stated that Deloitte was responsible for developing the application portal utilized by more than 50,000 registered users. The vendor processed over 250,000 applications while employing “program integrity initiatives” to prevent waste, fraud, and abuse.

According to Reuss, the Deloitte system identified over 1,500 applications. She stated that the vendor is collaborating with the State Patrol to examine the almost $23 million in false requests.

Reuss stated that the contact center at Deloitte received around 46,000 calls in the preceding 18 months. In addition, the contractor submitted monthly and quarterly compliance reports to the United States Treasury.

Erin Feichtinger, a housing and community advocate who has observed the initiative since its inception, expressed skepticism over the “flag” raised by Deloitte and the number of bogus applications identified.

She questioned the contract pricing, citing community group complaints that the aid application mechanism was difficult to use.

“I have no idea what we paid for,” said Feichtinger, who is now the policy director for the Women’s Fund of Omaha. They were expected to administer and distribute the funds, but failed to do so.

Reuss stated that the program functioned for almost 18 months and required applicants and landlords to submit personal information, including a COVID impact statement, wage forms, and leases.

Reuss stated that their partnership with Deloitte allowed them to handle over 250,000 applicants while preventing fraud and abuse.

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