Finding Text
Federal Agency: Department of Housing and Urban Development Federal Program Name: Continuum of Care Program Assistance Listing Number: 14.267 Federal Award Identification Numbers: MN0048L5K012316, MN0269L5K012211, MN0269L5K012312 Award Periods: 7/1/2024 – 6/30/2025, 1/1/2024 – 12/31/2024, 1/1/2025 – 12/31/2025 Type of Finding: • Material Weakness in Internal Control over Compliance • Material Noncompliance (Qualified Opinion) Criteria or specific requirement: Where grants are used to pay for rent for all or a part of a structure, the rent paid must be reasonable in relation to rents being charged in the area for comparable space. In addition, the rent may not exceed rents currently being charged by the same owner for comparable unassisted space (24 CFR 578.49(b)(1) and 24 CFR 578.51(g)) Condition: During our audit testing, we noted rent reasonableness documentation was not performed or performed after the rent expenses were paid. Context: During our testing 7 out of the 8 selections either did not have a rent calculation form filled out or the form was completed after the rent was paid. Questioned Costs: Unknown Cause: Procedures were not in place to fill out the rent calculation form. Effect: Rent paid may not be reasonable or in line with requirements. Repeat finding: Not a repeat finding Recommendation: CLA recommends that a policy is put in place to document the rent reasonableness procedures as well as documented review. Views of responsible officials: There is no disagreement with the audit finding.