Finding Text
Federal Program: U.S. Department of Housing and Urban Development AL #14.871 - Significant Deficiency. Criteria: The Authority must maintain records to document the basis for the determination that rent to owner is 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: We tested compliance with the Authority's rent reasonableness forms in 40 tenant files and found that two tenants did not have a rent reasonableness form for the current cost of rent. The rent was deemed reasonable by the Authority once noted by the auditors. The error noted remained undetected after completion of a quality control worksheet, which functions as the Authority's primary internal review process to ensure an annual certification, at minimum, was performed and appropriate tenant information is documented. Questioned Costs: None. Context: We reviewed a sample of 40 of the Authority's 472 tenant files for rent reasonableness requirements. Effect: HAP payments could have been paid to a tenant where rent was not considered reasonable. Cause: Upon change in rent or move-in to a new property during the term of the HAP contracts, the tenant files did not contain forms comparing the rent of like-kind units. Repeat Finding: See 2021-008. Recommendation: We recommend there be a second party review of the file to ensure all appropriate documents are included. Views of Responsible Officials: The Authority will have a checklist on annual certifications to ensure all appropriate documents are included in the file.