Finding 1095856 (2024-004)

-
Requirement
N
Questioned Costs
-
Year
2024
Accepted
2025-01-16
Audit: 338355
Organization: City of Westminster, Maryland (MD)
Auditor: Sb & Company LLC

AI Summary

  • Core Issue: The City failed to maintain necessary documentation to confirm that rent is reasonable for a tenant under the Housing Voucher program.
  • Impacted Requirements: Compliance with HUD's reasonable rent guidelines, specifically regarding initial leasing and annual evaluations.
  • Recommended Follow-up: Implement a policy to ensure all required documentation for tenant evaluations and annual re-evaluations is properly tracked and maintained.

Finding Text

Department of Housing and Urban Development 14.871 Housing Voucher Cluster Non-compliance with HUD Reasonable Rent Requirement Repeat Findings: No Criteria: The PHA must determine that the rent to the owner is reasonable at the time of initial leasing. Also, the PHA must determine reasonable rent during the term of the contract (a) before any increase in the rent to owner, and (b) at the HAP contract anniversary if there is a 10 percent decrease in the published Fair Market Rent in effect 60 days before the HAP contract anniversary. The PHA must maintain records to document the basis for the determination that rent to owner is a reasonable rent (initially and during the term of the HAP contract) (24 CFR sections 982.4, 982.54(d)(15), 982.158(f)(7), and 982.507). Condition and Context: We tested a sample of 25 HAP contracts and found 1 tenant where the rent reasonableness documentation was missing from the tenant file and therefore we could not determine if rent reasonableness was properly completed or reviewed. Cause: The City does not have an effective policy in place to ensure proper documentation of rent reasonableness. Effect or Potential Effect: The City would fail to comply with HUD’s reasonable rent guidelines. Questioned Costs: Unknown. Recommendation: We recommend that the City implements a policy to track documents necessary for a tenant’s evaluation and annual re-evaluation to ensure all are properly documented in the tenant files. Views of Responsible Officials: The City agrees with the finding. See Section V for the corrective action plan.

Categories

HUD Housing Programs

Other Findings in this Audit

Programs in Audit

ALN Program Name Expenditures
21.027 Coronavirus State and Local Fiscal Recovery Funds $2.68M
14.871 Section 8 Housing Choice Vouchers $206,795
16.738 Edward Byrne Memorial Justice Assistance Grant Program $56,903
16.607 Patrick Leahy Bulletproof Vest Partnership Program $5,417