Finding Text
2025-004: Record Keeping of Reasonable Rent Documentation in Tenant File Condition: During testing of rent reasonableness documentation for tenants participating in the Housing Choice Voucher program, the PHA did not maintain a required rent reasonableness calculation worksheet for 1 of 43 tenant files selected for the fiscal year 2025. The tenant file lacked evidence showing how the PHA determined that the rent charged was reasonable compared to unassisted, comparable units in the market area. Criteria: The PHA Administrative Plan must state the method used to determine rent reasonableness, and this method must consider the unit’s location, quality, size, unit type, unit age, and any amenities, housing services, maintenance, and utilities provided by the owner. Rent reasonableness must be determined at initial leasing, before any rent increase, and 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 that document the basis for each rent reasonableness determination (initially and during the term of the HAP contract) per 24 CFR §§ 982.4, 982.54(d)(15), 982.158(f)(7), and 982.507. Cause: 1 of the 43 Housing Voucher Cluster tenant files tested lacked properly maintained documentation to demonstrate that the required rent reasonableness worksheet and supporting comparability analysis were completed and retained as required. Effect: Without proper rent reasonableness documentation, the PHA cannot demonstrate that the rent charged for the assisted unit met federal requirements. Failure to maintain complete documentation increases the risk of noncompliance with HUD regulations, may result in improper use of federal funds, and could expose the PHA to future questioned costs or program sanctions if deficiencies persist. Recommendation: The PHA should strengthen internal controls over record keeping of reasonable rent documentation. Actions should include: 1. Implementing a standardized checklist that requires completion and retention of rent reasonableness documentation before file approval. 2. Update and reinforce staff training on rent reasonableness requirements under 24 CFR §§ 982.4, 982.54(d)(15), 982.158(f)(7), and 982.507, ensuring all staff understand documentation and timing requirements. 3. Conduct periodic quality control reviews of tenant files to verify compliance with federal documentation standards and the PHA’s Administrative Plan.