​ January 2024

Report 2024-01

The COVID-19 pandemic worsened Oregon’s ongoing housing crisis, leaving many renters struggling to pay for housing. In response, the federal government sent Emergency Rental Assistance (ERA) funds to states. The Oregon Housing and Community Services Department (OHCS) administered the state’s ERA program from May 2021 through June 2023 under incredibly challenging circumstances. The agency was tasked with creating and administering several multi-million-dollar state and federal pandemic programs, and public pressure to quickly distribute funds was intense. This audit reviewed the agency’s oversight of emergency rental assistance funds. Included are findings from federal financial audits of the Oregon ERA program for fiscal year 2022.

Why this audit is important

Through the Oregon ERA program, OHCS provided funding to help prevent evictions for households unable to pay rent or utilities as a result of the pandemic.

While the Oregon ERA program has ended, OHCS continues to provide rental assistance through the Oregon Eviction Diversion Program. The program uses some COVID-era eligibility flexibilities like self-certifications of income.

These findings are presented with an explicit acknowledgement of the difficulties the agency faced during the audit period and are intended to help strengthen controls and apply lessons learned as it serves a key role in addressing the state’s homelessness emergency.

What we found

1. OHCS distributed $426 million in emergency rental assistance as of June 2023. However, because of limited oversight and controls, OHCS cannot be certain spending met federal guidelines, or how much emergency funding went to eligible applicants. Also, the agency has not reliably determined how many total applications were paid, or households helped.
2. Material weaknesses regarding contract oversight and monitoring resulted in an adverse opinion for the program in the Statewide Single Audit — the first adverse opinion issued in more than 25 years by the Oregon Audits Division.
3. Renters and landlords experienced application processing delays because of rushed implementation of new software. A fragmented customer service system resulted in communication challenges.
4. OHCS was not prepared to respond to disaster housing emergencies, despite its responsibility to do so under Oregon’s emergency management framework.
5. OHCS took an equity-based approach to distributing funds. In the wake of Oregon ERA, OHCS is moving toward outcome-based contracting, tracking outcomes, and has hired an ombudsperson to handle client complaints.

What we recommend

We made 16 recommendations to OHCS. OHCS agreed with of eight our recommendations, partially agreed with six, and disagreed with two. The response can be found at the end of the report.