Finding Text
Special Tests and Provisions: Rent Reasonableness
Federal Program
U.S. Department of Housing and Urban Development AL #14.871 & 14.879 – Significant Deficiency
Grant Award No.
MN164-Housing Choice Voucher & MN164-Mainstream Voucher
Federal Award Year
2024
Criteria
The PHA must determine the rent to the owner is reasonable at the time of initial leasing and must
determine reasonable rent during the term of the contract before any increase in the rent to owner.
The PHA must maintain records to document the basis for determination that rent to owner is a
reasonable rent (initial and during the term of the HAP contract) (24 CFR sections 982.4,
952.54(d)(15), 982.158(f)(7), and 982.507.
Condition
During our testing on 40 of the Authority’s 747 tenant files, it was noted that rent reasonableness was
not performed on one occasion when a rent increase occurred.
Questioned Costs
None
Context
N/A
Effect
HAP payments could have been paid to a tenant where rent was not considered reasonable.
Cause
Upon change in rent during the term of the HAP contract, the Authority did not perform rent
reasonableness comparisons prior to the increase. Rent reasonableness was completed once the file
was selected by the auditors.
Repeat Finding
Not a repeat finding.
Recommendation
We recommend that the Authority review their control procedures to ensure all compliance
procedures are being performed timely.
Views of Responsible Officials
The Authority recognizes the deficiency and plans to implement the auditor’s recommendation.