Finding Text
HVC Reasonable Rent Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Housing Voucher Cluster Assistance Listing Number: 14.871/14.879 Federal Award Identification Number and Year: NE 001; 2024 Award Period: January 1, 2024 – December 31, 2024 Type of Finding: • Significant Deficiency in Internal Control over Compliance • Other Matters Criteria or specific requirement: The PHA’s administrative plan must state the method used by the PHA to determine that the rent to owner is reasonable in comparison to rent for other comparable unassisted units. The PHA determination must consider unit attributes such as the location, quality, size, unit type, and age of the unit, and any amenities, housing services, maintenance, and utilities provided by the owner. 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: Out of 25 tenant files tested for rent reasonableness, 2 tenant files contained exceptions. Questioned costs: $4,416 Context: During the testing of 25 tenant files for rent reasonableness, there were 2 instances where the contract rent per the HUD-50058 was greater than the approved rent per the rent determination form. Cause: The Authority failed to implement internal controls designed to ensure the proper reasonable rent is used on the HUD-50058. Effect: The Authority is not in compliance with federal regulations regarding reasonable rent requirements determined by HUD. Repeat Finding: No Recommendation: We recommend the Authority implement controls to ensure reasonable rent requirements are met. Views of responsible officials: There is no disagreement with the audit finding.