Finding Text
Finding 2022-001; Assistance Listing Number: 14.267; Program Title: Continuum of Care Program; Federal Agency: U.S. Department of Housing and Urban Development; Criteria - The Continuum of Care Program requires that the Organization perform a test of rent reasonableness at least annually to determine if rents paid for program participants are comparable to fair market rents in the vicinity of the participants housing.; Condition - The Organization was using the U.S. Department of Housing and Urban Development’s (“HUD”) published Fair Market Rents (“FMR”) to determine the reasonableness of the rents paid, and not performing an analysis of rents in the immediate area of the participants housing.; Cause - The Organization was applying a method of determining reasonable rents that had been allowable under prior awards, prior to migration of the programs funding to the Continuum of Care program under assistance listing number 14.267.; Context - While the Organization did not utilize the required method of determining fair market rents required under the Continuum of Care Program, the Organization was employing a method of determining fair rents utilizing FMR data from HUD.; Effect - The potential existed that calculated fair market rents were less than provided by FMR data from HUD. Based on the Organization’s subsequent calculation of fair market rents, no units were paying above rent limits imposed by the Continuum of Care Program.; Questioned Costs - None; Prior Audit Finding - No; Recommendation - The Organization should, at least annually, perform a survey of FMR utilizing an acceptable approach outlined by the Continuum of Care program. The Organization should document their comparison to FMR in each program participant’s file prior to a participant’s lease signing.; Views of Responsible Officials - The Organization agrees with the finding, and will perform procedures to implement the recommendation.