OIG No. 21-03: Inspection of Covid-19 Rent Assistance
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TO: Honorable Mayor and Members of the City Commission
FROM: Joseph Centorino, Inspector General
DATE: October 14, 2020
PROJECT: Covid-19 Rent Assistance Inspection
OIG Audit No. 21-03
Utilizing a variety of funding sources, the City created several distinct pools of assistance funds
that began serving residents in May 2020, including Community Development Block Grant -
Coronavirus funds and HOME Investment Partnership (HOME) funds. The first tranche
yielded 159 processed files from 502 appointments and provided $311,829 in direct
assistance. These federal funds required that beneficiaries meet specific income eligibility
guidelines and that beneficiaries document direct impact by COVID as well as initially limiting
CDBG assistance to a maximum of three month's rent assistance.
The second tranche of funds provided $336,000 in housing and utility assistance that was
distributed utilizing a lottery process that yielded 562 applicants. Since this tranche utilizes
federal funds, the income eligibility criteria also applied.
While the eligibility of the grant applicants in the second tranche was being examined, the
Office of Housing and Community Development staff sent an email to the Office of the
Inspector General (OIG) on June 23, 2020, stating that a Miami Beach resident had
manipulated her bank statements to show substantially lower assets in an effort to qualify for
rent assistance. This attempted deception, detected by crosschecking totals to conduct an
income certification, is in direct violation of the terms of consent that was executed on June 5,
2020 which includes the following statement: “Florida Statute 817 provides that willful false
statements or misrepresentation concerning income and assets or liabilities relating to financial
condition is a misdemeanor of the first degree and is punishable by fines and imprisonment
provided under §775.082 or §775.83 or §775.084.”
The possible fraud was referred by the Inspector General to the State Attorney’s Office for review.
The Assistant State Attorney who reviewed the issue declined prosecution on the basis that the
individual involved did not actually receive any funds. Concerned about the possibility of further
attempted fraud by others, OIG staff met with the Housing and Community Development Director
on June 30, 2020 to review the evaluation process. The Director explained some of the red flags
that they look for in financial information provided by applicants, and gave examples of findings
that have led them to reject some applicants. The forms that must be completed by all applicants
and an internally created Excel spreadsheet containing each applicant’s financial information
were also reviewed.
Next, Director Ruiz mentioned that they had been trying to utilize the FinClear software, which
would allow staff to search for bank checking accounts that could reveal whether an applicant is
not reporting all assets. She said that her office had been offered a six-month trial at no charge
for use of the software in November 2019, but approval of the agreement had not yet been
received from the City Attorney's Office.
OIG staff determined that the internal controls implemented to review data submitted by
applicants were satisfactory, but that the Excel spreadsheet in use could be enhanced to expedite
the grant approval process. Consequently, OIG staff added drop-down menus, formulas and
conditional formatting to facilitate an automatic determination of eligibility once all the information
is entered into the spreadsheet by Office of Housing and Community Development staff. This
revised spreadsheet is now being used by staff to provide stronger oversight over the grant
process.
Furthermore, the City's Inspector General contacted the City Attorney's Office concerning the
status of the FinClear software agreement. After some revisions of terms, the agreement with All
Clear Decisioning was approved in form on August 12, 2020 and then signed on August 20, 2020
giving the Office of Housing and Community Development authorization to use the software, now
called FinCertify.
A training on the FinCertify software will be scheduled in the near future, and will be attended by
staff from both Housing and Community Development and OIG. Once completed and access to
the software is secured, financial information from both prior grant recipients and new grant
applicants will be vetted. All information concerning any identified individuals who may have
fraudulently received grant monies will be forwarded to the State Attorney's Office for possible
prosecution. The OIG will also monitor instances of possible attempted fraud not subject to
criminal prosecution for further evaluation of existing controls. Additional future reports will be
drafted that memorialize the results of this testing.
2±$-2 Muan Cooia@e. chiet Auditor
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Date
cc: Jimmy L. Morales, City Manager
Maria Ruiz, Housing and Community Development Director
OFFICE OF THE INSPECTOR GENERAL, City of Miami Beoch
1130 Washington Avenue, 6" Floor, Miami Beach, FL 33139
Tel: 305.673.7020 • Fax: 305.587.240 l • Hotline: 786.897.1111
Email: CityofMiamiBeachOIG@miamibeachfl.gov
Website: www.mbinspectorgeneral.com
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