Finding Text
2024 – 006 – Rent Reasonableness Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Housing Voucher Cluster Assistance Listing Number: 14.871 and 14.879 Federal Award Identification Number and Year: FL007, 2024 Award Period: July 1, 2023 to June 30, 2024 Type of Finding: • Significant Deficiency in Internal Control over Compliance • Other Matters Criteria or specific requirement: The Authority’s administrative plan must state the method used by the Authority to determine that the rent to owner is reasonable in comparison to rent for other comparable unassisted units. The Authority’s determination must consider unit attributes such as the location, quality, size, unit type, and age of the unit, and any amenities, housing services, maintenance, and utilities provided by the owner. The Authority must determine that the rent to the owner is reasonable at the time of initial leasing. Also, the Authority must determine reasonable rent during the term of the contract (a) before any increase in the rent to owner, and (b) 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 to document the basis for the determination that rent to owner is a reasonable rent (initially and during the term of the HAP contract) (24 CFR sections 982.4, 982.54(d)(15), 982.158(f)(7), and 982.507). Condition: During the testing of the Housing Choice Voucher Program tenant files, certain special provision compliance deficiencies were noted. Of the 84 files tested, 2 instances were noted where the rent reasonableness was not performed. Questioned costs: N/A Context: During our testing, we reviewed 84 tenant files that required rent reasonableness; 2 tenant files contained errors as noted. Cause: The Authority failed to determine the rent reasonable before the tenants' effective date Effect: The Authority is not in compliance with federal regulations regarding the determination of reasonable rent. Inaccurate data could cause Authority to be paying an unfair rent to a landlord. Repeat Finding: No Recommendation: We recommend that the Authority designate an individual to review tenant files to determine if a rent reasonableness has been performed and was completed in a timely manner. Views of responsible officials: There is no disagreement with the audit finding.