Finding 1162414 (2024-003)

Internal Controls Over Rent Reasonableness - Significant Deficiency Criteria: Internal controls should be in place to provide reasonable assurance that rents paid for with grant funds are reasonable in relation to rent being charged in the area for comparable space. Condition: The Organization did not have a documented procedure supporting how rent reasonableness is documented and maintained in the tenant files to provide documentation of compliance with the criteria. Questioned Costs: None Effect or Potential Effect: The Organization could potentially not be in compliance with the requirement to ensure that grant funds to pay rent were used for reasonable rent in relation to comparable rent in the area. Cause: The Organization did not have an adequate control in place for the review by a supervisor of to ensure documentation that reasonable rent was being charged was in each file. Recommendations: We recommend that the Organization implement procedures for supervisor review and approval of documentation of reasonable rental rates be included in tenant files. Views of Responsible Officials and Planned Corrective Action: CHP concurs with the finding and will be updating internal controls to include evidence of appropriate reviews and approvals of rent reasonableness.