Finding Text
Finding 2025-004 – U.S. Department of Housing and Urban Development – Continuum of Care Homeless Assistance Competition, 14.267 Noncompliance – Reasonable Rental Rates Documentation Compliance Requirement: Reasonable Rental Rates Criteria – Per 24 CFR 578.49(b)(1) and (b)(2), and 24 CFR 4578.51(g) and (j), the Organization must determine that federal funds used to pay for rent must be reasonable according to federal guidelines. The Organization must document its evaluation of the reasonableness of any rental rates that utilize federal funds. Condition – The Organization did not formally document its evaluation of the reasonableness of rental rates. Cause – Lack of documentation to evidence compliance with program requirements. Effect – By not maintaining documentation to evidence the Organization’s evaluation of the reasonableness of rental rates, the Organization may not be in compliance with federal or grant award provisions and may be at a risk of losing federal funding. Questioned Costs – None noted. Context – The Organization should have maintained documentation for all rental agreements to evidence its evaluation of the reasonableness of rental rates. Recommendation – We recommend management maintain documentation that evidences its compliance with reasonable rental rate activities in accordance with federal and grant award provisions. Management’s Response – Management concurs with the finding, see Corrective Action Plan.