Finding Text
Criteria: Rents being charged to the program must be comparable to similar units, in addition to being below fair market rents. The Organization completes a rent reasonableness form for each unit, that evaluates the unit with other comparable units as well as determines if the rent being charged is not greater than the fair market rent. Condition: During our testing for rent reasonableness, we noted the Organization was retroactively completing the rent reasonableness form for each unit and making the determination as to whether or not comparable rent was being paid. Cause: The housing department experienced personnel turnover, alongside strained capacity in the accounting division. Effect: Rent being charged to the program could be in excess of rents for comparable units or greater than the fair market rent. Repeat Finding: N/A Recommendation: The Organization should implement procedures to ensure that rent reasonableness forms are being prepared timely, and that all rents being charged are comparable to similar units and below fair market rent. Response: As part of the standard operating procedures, management intends to implement the following: • Require Pre-Approval Completion of Rent Reasonableness Forms: Effective immediately, rent reasonableness forms must be completed and approved before any lease is executed or renewed. No unit may be approved for occupancy until this documentation is on file. • Implement a Standardized Intake Documentation: A mandatory rent reasonableness form, fair market rent comparison, and supporting documentation must be maintained. Files cannot be finalized without all required items. • Centralize Documentation Storage: All rent reasonableness forms will be stored in a centralized electronic repository organized by program and unit. This ensures timely retrieval for monitoring and audit purposes. • Staff Training: Housing program staff will receive training on the updated procedures, including when and how rent reasonableness forms must be completed. Refresher training will be incorporated into annual compliance training. • Ongoing Monitoring and Quality Review: The Director of Housing Programs will conduct quarterly reviews of tenant files to verify that rent reasonableness forms are completed prior to lease approval. Any deficiencies will be corrected immediately and reported to senior management.