Finding Text
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: VA001, 2021 Award Period: 1/1/2021-12/31/2021 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: 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 5 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: Of the 29 tenant files tested: - 1 instance where the sample selected could not be tested because the Authority could not locate the information - 1 instance where the rent comparison documentation was not performed prior to the effective date - 1 instance where the rent charged was greater than what was determined to be reasonable Questioned costs: $11,459 Context: Of the 29 tenant files tested, 3 files contained exceptions. Cause: The Authority did not follow the internal controls designed to ensure compliance with rent reasonableness requirements. Effect: The Authority is not in compliance with federal regulations regarding reasonable rent requirements determined by HUD. PORTSMOUTH REDEVELOPMENT AND HOUSING AUTHORITY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (CONTINUED) YEAR ENDED DECEMBER 31, 2021 Recommendation: We recommend the Authority review its controls over reasonable rent determinations to ensure that they are performed timely, files are maintained, and the approved rent is properly carried forward to the HUD-50058. Views of responsible officials: There is no disagreement with the audit finding.