Finding 1056948 (2023-001)

Significant Deficiency
Requirement
N
Questioned Costs
-
Year
2023
Accepted
2024-08-06
Audit: 316696
Organization: The Link (MN)

AI Summary

  • Core Issue: There is a significant deficiency in ensuring that rental rates are reasonable compared to similar units, leading to potential compliance issues.
  • Impacted Requirements: Compliance with HUD regulations requires rent comparisons to include three units, one from the same owner, and proper review signatures.
  • Recommended Follow-Up: Implement a consistent process to verify rent reasonableness with three comparable units, including one from the same owner, and ensure forms are signed to confirm review.

Finding Text

Significant Deficiency: Reasonable Rental Rate Comparisons, Significant Deficiency in Internal Control over Compliance; Compliance finding Assistance Listing #14.267, Department of Housing and Urban Development Continuum of Care program Criteria: 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 (24 CFR sections 578.49(b)(2)). The Organization's Rapid Rehousing Program Manual says to "complete rent reasonableness form using 3 comparable apartments," and was revised December 1, 2023 to also include, "One of the units must be for the same owner to ensure reasonable rent will not exceed rents currently being charged by the same owner for comparable unassisted units." Condition: Of 17 client files selected for testing, 3 rent reasonableness forms did not contain a signature indicating review of the reasonableness of the rental rate. Twelve of the seventeen rent reasonableness forms only included two comparable units and did not have a unit from the same owner. Cause: The Organization was utilizing a form that did not require a signature and did not require 3 comparable units or a unit from the same owner. Effect or Potential Effect: Rent paid may be unreasonable compared to units owned by the same landlord. Recommendation: Consistently ensure reasonableness checks include three units, one of which is from the same landlord, and provide review over the forms including a signature to evidence review. Responsible Official's Response: The Organization agrees with this finding and implemented changes before end of fiscal year.

Categories

Significant Deficiency Internal Control / Segregation of Duties

Other Findings in this Audit

  • 480498 2023-001
    Significant Deficiency
  • 480499 2023-001
    Significant Deficiency
  • 480500 2023-001
    Significant Deficiency
  • 480501 2023-001
    Significant Deficiency
  • 480502 2023-001
    Significant Deficiency
  • 480503 2023-001
    Significant Deficiency
  • 480504 2023-001
    Significant Deficiency
  • 480505 2023-001
    Significant Deficiency
  • 480506 2023-001
    Significant Deficiency
  • 480507 2023-001
    Significant Deficiency
  • 1056940 2023-001
    Significant Deficiency
  • 1056941 2023-001
    Significant Deficiency
  • 1056942 2023-001
    Significant Deficiency
  • 1056943 2023-001
    Significant Deficiency
  • 1056944 2023-001
    Significant Deficiency
  • 1056945 2023-001
    Significant Deficiency
  • 1056946 2023-001
    Significant Deficiency
  • 1056947 2023-001
    Significant Deficiency
  • 1056949 2023-001
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
14.276 Youth Homelessness Demonstration Program $156,269
16.320 Services for Trafficking Victims $156,141
21.027 Coronavirus State and Local Fiscal Recovery Funds $154,596
14.218 Community Development Block Grants/entitlement Grants $100,000
16.540 Juvenile Justice and Delinquency Prevention_allocation to States $28,609
16.575 Crime Victim Assistance $28,479
14.267 Continuum of Care Program $25,312