DFM outlines ERAP closeout steps to avoid $6.9M federal payback
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Summary
Merrill said about $6.9 million of ERAP II funds administered by VSHA were identified as disallowed; DFM proposes reversion-and-reallocation transactions to substitute ERAP for state spending on allowable uses and free general fund to remediate the disallowed spending, but one $1,192,000 swap requires explicit statutory authorization for a cash-fund subaccount.
Deputy Commissioner Hardy Merrill told the House Appropriations Committee that the closeout of federal Emergency Rental Assistance Program (ERAP) funding administered by the Vermont State Housing Authority (VSHA) identified roughly $6.9 million in uses that the federal program marks as disallowed.
"We are not wanting to have to remit $6,900,000 back to the federal government based on disallowed uses," Merrill said, describing a back-office reversion-and-reallocation process: DFM would, where permissible, substitute ERAP spending authority for state spending on eligible Department for Children and Families (DCF) appropriations and then use the freed general fund to provide VSHA the funds needed to correct the disallowed expenditures.
Merrill cautioned that one transaction — approximately $1,192,000 tied to a specific cash-fund subaccount created under a prior act — is not currently authorized by the existing reversion language, and DFM cannot legally complete that swap until the legislature enacts authorizing language. He asked the committee to consider inviting the recovery office for a detailed, multi-year spreadsheet walkthrough because the swap spans fiscal years and involves sequencing questions.
Committee members asked for a more detailed presentation from the recovery office to trace the flows and reconcile discrepancies; Merrill agreed to return with additional materials.
