Audit 399601

Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Housing Choice Vouchers Assistance Listing Number: 14.871 Federal Award Identification Number and Year: 2025 Award Period: January 1, 2025 – December 31, 2025 Type of Finding: Material Weakness in Internal Control Over Compliance and Other Matters Criteria or specific requirement: Program requirements mandate that rent reasonableness determinations be supported by current market data and include comparable non-assisted units with similar location, size, type, quality, amenities, and utilities. Rental comparisons must be updated regularly to reflect prevailing market conditions. Condition: The Authority did not consistently perform rent reasonableness determinations correctly. Review of tenant files showed that rental comparisons used to support rent reasonableness determinations were outdated and, in some cases, relied primarily on assisted units rather than comparable non-assisted properties in the private market. Questioned costs: None Noted Context: During testing of a sample of rent reasonableness calculations, it was noted that the information used to complete the testing was not accurate and was not properly supported. Cause: The deficiency appears to be due to reliance on outdated rental comparison data and inadequate procedures to ensure that non-assisted market units are included and that comparisons are refreshed on a routine basis. Effect: As a result, rent reasonableness determinations may not accurately reflect current market rents. This increases the risk of approving rents that exceed market rates, potentially resulting in improper use of program funds and noncompliance with program requirements. Repeat Finding: No Recommendation: The agency should update its rent reasonableness procedures to ensure: - Rental comparison data is current and regularly refreshed; - Comparable non-assisted units are consistently used; and - Staff are trained on proper rent reasonableness documentation and review standards. The agency should also review a sample of recent rent reasonableness determinations to ensure corrective actions are fully implemented. Views of responsible officials: There is no disagreement with the audit finding.