Finding Text
024-002 – SPECIAL TESTS & PROVISIONS: RENT REASONABLENESS
Material Weakness/Material Noncompliance
U.S. Department of Housing and Urban Development
CFDA #: 14.871 / 14.879 – Housing Voucher Cluster
CRITERIA
The PHA may not approve a lease until the PHA determines that the initial rent to an owner is a reasonable rent. (2) The PHA must redetermine the reasonable rent: (i) Before any increase in the rent to an owner; (ii) If there is a 10 percent decrease in the published FMR in effect 60 days before the contract anniversary (for the unit size rented by the family) as compared with the FMR in effect 1 year before the contract anniversary. (iii) If directed by HUD.
The PHA may also redetermine the reasonable rent at any other time.
At all times during the assisted tenancy, the rent to owner may not exceed the reasonable rent as most recently determined or redetermined by the PHA. (24 CFR 982.507)
CONDITION
We identified ten instances in which the Authority was required to perform an assessment to determine if the rent requested by the landlord is reasonable. In all instances, the Authority did not perform this rent reasonableness assessment properly.
AUSE
The Authority’s system of internal control over the participant recertification process was not sufficient to meet the requirements established by HUD.
EFFECT
The Authority cannot ensure that HAP payments to landlords were reasonable. QUESTIONED COSTS
None identified.
CONTEXT
We selected a sample of 40 from a population of 276. This was not a statistically valid sample. REPEAT FINDING
See finding 2023-002
RECOMMENDATION
We recommend that the Authority develop and implement a recertification checklist to accompany the tenant file to ensure all required documentation is obtained.
AUDITEE’S RESPONSE AND PLANNED CORRECTIVE ACTION
See Corrective Action Plan.