Finding #2025-003 14.871 Section 8 Housing Choice Vouchers Special Tests and Provisions – Reasonable Rent Views of Responsible Officials and Planned Corrective Action Management’s Position: Management respectfully disagrees with this finding. GHURA’s HCV program remains committed the regulations 24 CFR 982.507 and is fully knowledgeable of the process when determining rent reasonableness with comparable units in the private market and properly document all comparables. Before executing a HAP Contract, a rent reasonableness analysis is conducted for all units. This analysis includes assessing comparable unassisted units taking into account the location, size, type, and age of unit, as well as any amenities (such as septic, sewer, air conditioning, etc.), and utility responsibilities. We have standard operating procedures and methodologies in place to conduct these analyses and certify that comparable rents are reasonable. Any identified errors are likely due to isolated oversights during the data entry process. Explanation of Disagreement: Listed below are the discrepancies with accompanying comments. Out of the seven (7) entries provided, one (1) was identified as a calculation error. TOTAL: 07 entries (table provided to support explanation) 1. 4 Rent Reasonableness entries were completed correctly. 2. 2 Rent Reasonableness entries were system input errors. 3. 1 Rent Reasonableness analysis was an administrative error. Voucher Number Effective Date Auditor Comment Section 8 HCV Response HCV2828 2/1/2025 Per examination of the Rent Reasonableness reports, it was noted the comparables are not within similar area locations. We noted that the unit is located in Yigo (Northern), while the comparable units used in the rent reasonableness determination were located in the Southern area. To properly check the unit comparisons, the rent reasonableness module was updated to reflect the correct location and the three highest scoring comparable units were selected based on the applicable comparison factors. From the revised analysis, the average rent of the comparable unassisted units were $1,924, which is less than the initial calculated average of $2,966.67. SYSTEM INPUT ERROR: Location of the Proposed Unit was inputted as 'Southern' when the Yigo unit is a 'Northern' located unit. As a result, comparables for units located in the southern location were pulled. SOLUTION: All Section 8 assisted units in the system will be assessed to verify location accuracy based off of village and zip code. NED0444 10/1/2024 The Authority did not rely on the comparable contract rents reflected in the Rent Reasonableness Determination Report (average $949.33), but instead recalculated contract rent using gross rent less a utility allowance, resulting in $1,000. This methodology is not directly supported by the market comparables presented in the report. ADMINISTRATIVE ERROR: The amount of $949.33 should have been the contract rent amount. SOLUTION: Review discrepancy with team to ensure errors will not happen in the future. HCV2796 1/1/2025 Per Mark McCormick on the Rent Reasonable Determination Report and Request for Tenancy Approval (RFTA), the documents indicate no comparable unassisted units were available in the proposed unit's area; however, a nearby unassisted unit in the RFTA is at Ladera Tower and appears reasonably comparable based on proximity. 12a. Owner’s Certification 1. Ladera Towers - Date rented: 9/1/24 - Rental amount: 2,450 2. Washington Dr - Date rented: 10/21/21 - Rental amount: 1,850 3. Quichocho St Villa - Date rented: 1/21/23 - Rental amount: 1,850 RR DETERMINED CORRECTLY: (1) Rent Determination Documents has a note that the unassisted units are not on premises. (2) The units listed in the RFTA-12A were not located on the premises of the unit to be under HAP contract which is why it was not referenced. (3) The Ladera Towers may or may not be in the unassisted units database; is was not in the database at the time the comparables were made. HCV2876 6/30/2025 The approved contract rent of $1,400 was calculated using the average column in the Rent Reasonableness Determination Report (exception); however, the three comparable unassisted units listed on the RFTA are each $1,200, which is lower than the approved amount. Owners Certification: 138 (#347) and 148 (#363) Chalan totche $1,200 132 Chalan Guihan #402 $1,200 RR DETERMINED CORRECTLY: RFTA lists LITHC properties. LITHC unit rates are not used in comparables. 6-05-0050- 56262 9/1/2025 The owner proposed rent of $2,500 was determined to be rent reasonable based on the average comparable unassisted units of $3,774 and Fair Market value of $2,964. However, it was noted that the unit is located in Chalan Pago (Central), while one of the comparable units used in the rent reasonableness determination was located in the Northern area. To properly check the unit comparisons, the rent reasonableness module was updated to reflect the correct location and the three highest scoring comparable units were selected based on the applicable comparison factors. From the revised analysis, the average rent of the comparable unassisted units were $1,870, which is less than the initial calculated average of $3,774. SYSTEM INPUT ERROR: Location of unassisted unit was labelled as 'Central' when the village and zip code indicates that unit is located in the 'Northern' area. SOLUTION: All Section 8 unassisted units in the system will be assessed to verify location accuracy based off of village and zip code. 6-08-0353- 60378 1/1/2025 Per examination of the rent determination report, we noted the approved rent exceeds the rent reflected in the owner-certified lease for a comparable unit; however, no documentation was provided to support or justify the variance between the approved and contracted rent amounts. RR DETERMINED CORRECTLY: Tenant exercised the rent burden rule for this contract. The $100 amount does not exceed the tenant's 40% of AMI. NED0070 11/1/2024 Rent determination documentation indicates an approved amount of $940; however, the executed lease agreement (dated 10/29/2024) reflects a rent of $942 as requested by the landlord. No supporting documentation was provided to justify the variance between the approved rent and the amount charged. RR DETERMINED CORRECTLY: Approved amount for the contract was $942; which aligns with landlord's request. Corrective Actions: (1) SYSTEM INPUT ERRORS: All Section 8 unassisted and assisted units in the system will be assessed to verify location accuracy based off of village and zip code. (2) ADMINISTRATIVE ERRORS: Review discrepancy with team to identify the cause of this issue and ensure similar errors do not happen in the future. Preventive Measures: Closely assess rent determination calculations to ensure accuracy and certified rental amounts are correct. Responsible Party: Nicole Alejandro, Section 8 Administrator Anticipated Date of Completion: Timeline for Resolution: (1) SYSTEM INPUT ERRORS: • 6/18/2026: Request report from MIS to provide list of units with location in the systems. • 6/22/2026: Received report from MIS, consisting of 4,922 units. • 6/22-6/10/2026: Review report, identify deficiencies, and create plan to correct deficiencies. • 6/13/2026: Assign staff to update system with accurate data to address any location deficiencies. • 7/31/2026: Complete assignment. Preventive Measures: Pull quarterly report for assisted and unassisted units in the system and review list of units and ensure location is accurate based off of village and zip code of unit. (2) ADMINISTRATIVE ERRORS: Review discrepancy with team to identify the cause of this issue and ensure similar errors do not happen in the future. • 6/17/2026: Review and discuss discrepancy with HCV Inspection Supervisor • 6/18/2026: Conduct Inspection Team Meeting to address discrepancy with HCV Inspection Team to identify the cause of the issue. Review SOP with team to ensure similar errors do not happen in the future • 6/18/2026: Assignment completed.