Finding Text
Program Name – Continuum of Care Program CFDA Number – 14.267 Finding Type – Material Weakness and Noncompliance 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, and the portion of rents paid with grant funds may not exceed HUD-determined fair market rents. Condition – During the audit we tested 60 samples and noted: • For 7 samples no supporting documents were provided and we were not able to verify if the rent was reasonable. • For 1 sample the rent for comparable units at the same owner were lower than the assisted unit and there was no explanation why the rent was determined to be reasonable. • For 12 sample we could not verify evidence of review and approval of the rent reasonableness before the rent and the subsidy was approved. Questioned Cost – Unknown Identification of a Repeat Finding – This is not a repeat finding from the immediate previous audit Cause/Effect – There was a high staff turnover during the COVID-19 pandemic and staff responsible for the determination and the documentation was no longer available. As a result, we could not verify the reasonableness of rent payments. Recommendation – We recommend that all rent reasonableness determinations are properly documented. All records should be monitored in the tenant files to evidence the rent reasonable determinations. The documentation should be reviewed and approved before rents and rent subsidies are authorized and disbursed.