A new report from the Legislative Auditor evaluating Minnesota’s Covid-19 Emergency Rental Assistant Program, RentHelpMN. The audit found the $598 million program issued millions in overpayments, was slow to process applications, and failed to verify applicant eligibility. 

Senator Rich Draheim (R-Madison Lake) requested the audit after Commissioner Ho offered a series of discrepancies, confusing explanations, and ambiguous and vague answers about the program during several Housing Committee hearings last year.

“This is a classic case of a well-intended program that is fraught with problems, as many of us suspected due to Commissioner Ho’s repeated evasiveness,”  Draheim said. “For an agency responsible for billions of dollars, we should expect more than failure after failure. In this case, not only were we slower than other states to get our program up and running, but ours was still badly run. It points to structural problems that need to be fixed right away – certainly before we implement a similar, permanent program, as Democrats are proposing in their current Housing budget.”

“We have a responsibility to make sure these programs run well,” Draheim added. “It is important for tenants who depend on the payments. It is important for the landlords so they can operate their businesses. And it’s important for the taxpayers, who deserve guarantees their money is not being wasted. We need to get a straight answer from Commissioner Ho about what happened with the millions in overpayments, but I am otherwise thankful to the Legislative Auditor for shining a light on RentHelpMN’s numerous issues and for providing clear instructions to fix them. This is an opportunity to learn from our mistakes and do better for the people of Minnesota. I hope Minnesota Housing implements the auditor’s recommendations.”

Findings from the report:

• Roughly 15% of applications were handled incorrectly and received wrong payments. If that sample size holds true, the program would have about $90 million in errors.
• Minnesota Housing self-reported $3.5 million in overpayments.
• Minnesota Housing was initially slow to distribute funds.
• Minnesota Housing did not establish standards for how quickly to approve applications, resulting in slow processing.
• Minnesota Housing did not require proof of eligibility from landlords or renters, instead allowing them to attest to eligibility.
• Minnesota Housing did not collect sufficient documentation.

Report recommendations:

• Minnesota Housing should establish clear, comprehensive, written program policies and procedures.
• Minnesota Housing should ensure program participants have sufficient access to knowledgeable program staff who can answer or act on their questions or concerns.
• Minnesota Housing should conduct more extensive testing of its data systems before it launches a program to ensure the systems function as expected; it should also include intended end users in the testing of those systems.
• Minnesota Housing should establish standards for application processing time and measure the performance of application processors against those standards.
• Minnesota Housing should collect sufficient documentation and conduct regular audits of cases to ensure accurate payment and that policies and procedures are followed.
• To maximize the odds of recovery, Minnesota Housing should develop comprehensive procedures for recouping overpayments before it issues any payments, and it should promptly begin recoupment efforts once it identifies an overpayment.