Audit 317971

ITEM # 2023-001 SPECIAL TESTS – RENT REASONABLENESS Continuum of Care Assistance Listing No. 14.267 Department of Housing and Urban Development Criteria For Continuum of Care grants, Uniform Guidance requires a compliance special test for reasonable rental rates stating “where grants are used to pay rent for individual housing units, the rent paid must be reasonable in relation to rents being charged for comparable units taking into account relevant features. In addition, the rents may not exceed rents currently being charged by the same owner for comparable unassisted units, and the portion of rents paid with grant funds may not exceed HUD-determined fair market rents.” Condition and Context Safe Haven used grant money to pay rent for an individual housing unit in excess of the HUDdetermined fair market rent for Davidson County. Questioned Cost The costs in excess of fair market rents totaled $206.50. Cause Safe Haven performed and reasonable rent analysis and concluded the rent was not reasonable; however, approval to pay and proceed with the lease still occurred. Effect Safe Haven was not in compliance with the special tests compliance requirement of the Continuum of Care agreements. Recommendation We recommend Safe Haven pay up to the HUD-determined fair market rent when leases exceed these rates and use non-grant money to cover the amount in excess. Views of Responsible Officials and Planned Corrective Action Safe Haven concurs with the finding and will adhere to the rent reasonableness requirements of Continuum of Care awards. To ensure compliance with rent reasonableness, management will vouch all rent reasonableness analyses to their respective disbursement request and ensure amounts disbursed do not exceed HUD-determined fair market rent rates.

ITEM # 2023-001 SPECIAL TESTS – RENT REASONABLENESS Continuum of Care Assistance Listing No. 14.267 Department of Housing and Urban Development Criteria For Continuum of Care grants, Uniform Guidance requires a compliance special test for reasonable rental rates stating “where grants are used to pay rent for individual housing units, the rent paid must be reasonable in relation to rents being charged for comparable units taking into account relevant features. In addition, the rents may not exceed rents currently being charged by the same owner for comparable unassisted units, and the portion of rents paid with grant funds may not exceed HUD-determined fair market rents.” Condition and Context Safe Haven used grant money to pay rent for an individual housing unit in excess of the HUDdetermined fair market rent for Davidson County. Questioned Cost The costs in excess of fair market rents totaled $206.50. Cause Safe Haven performed and reasonable rent analysis and concluded the rent was not reasonable; however, approval to pay and proceed with the lease still occurred. Effect Safe Haven was not in compliance with the special tests compliance requirement of the Continuum of Care agreements. Recommendation We recommend Safe Haven pay up to the HUD-determined fair market rent when leases exceed these rates and use non-grant money to cover the amount in excess. Views of Responsible Officials and Planned Corrective Action Safe Haven concurs with the finding and will adhere to the rent reasonableness requirements of Continuum of Care awards. To ensure compliance with rent reasonableness, management will vouch all rent reasonableness analyses to their respective disbursement request and ensure amounts disbursed do not exceed HUD-determined fair market rent rates.