Finding 384793 (2023-005)

Material Weakness
Requirement
N
Questioned Costs
$1
Year
2023
Accepted
2024-03-26

AI Summary

  • Core Issue: The Authority lacks adequate controls for determining reasonable rent, leading to noncompliance with HUD requirements.
  • Impacted Requirements: Rent determinations must be made before the effective date and consider various unit attributes.
  • Recommended Follow-Up: Review and improve the rent determination process to ensure compliance before rent takes effect.

Finding Text

2023 – 005 – Housing Voucher Cluster - Reasonable Rent Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Housing Voucher Cluster Federal Award Identification Number and Year: VA003, 2022-2023 Assistance Listing Number: 14.871/14.879/14.EHV Award Period: July 1, 2022 – June 30, 2023 Type of Finding: Material Weakness, Material Noncompliance (Modified Opinion) Criteria or specific requirement: The PHA’s administrative plan must state the method used by the PHA to determine that the rent to owner is reasonable in comparison to rent for other comparable unassisted units. The PHA 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 PHA must determine that the rent to the owner is reasonable at the time of initial leasing. Also, the PHA 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 5% 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 (24 CFR sections 982.4, 982.54(d)(15), 982.158(f)(7), and 982.507). Condition: The Authority did not have sufficient internal controls over reasonable rent determinations to ensure compliance with HUD requirements. Context: During our testing of 25 files for rent reasonableness requirements, we noted that 10 files had a reasonable rent determination that was not performed until after the effective date. Questioned costs: $1,800 Cause: The Authority has had turnover in the staff who perform the rent reasonableness determinations, resulting in these processes being performed by less experienced and trained staff. Effect: The Authority is not in compliance with HUD’s requirements over rent reasonableness. Repeat Finding: No Recommendation: We recommend the Authority review their reasonable rent determination process to ensure that it is performed before the rent is set to go into effect. Views of responsible officials: There is no disagreement with the audit finding.

Categories

Questioned Costs HUD Housing Programs Material Weakness Internal Control / Segregation of Duties

Other Findings in this Audit

  • 384786 2023-001
    Significant Deficiency Repeat
  • 384787 2023-003
    Material Weakness
  • 384788 2023-004
    Material Weakness
  • 384789 2023-005
    Material Weakness
  • 384790 2023-006
    Significant Deficiency
  • 384791 2023-003
    Material Weakness
  • 384792 2023-004
    Material Weakness
  • 384794 2023-006
    Significant Deficiency
  • 384795 2023-003
    Material Weakness
  • 384796 2023-004
    Material Weakness
  • 384797 2023-005
    Material Weakness
  • 384798 2023-006
    Significant Deficiency
  • 384799 2023-002
    Significant Deficiency Repeat
  • 384800 2023-002
    Significant Deficiency Repeat
  • 384801 2023-002
    Significant Deficiency Repeat
  • 384802 2023-002
    Significant Deficiency Repeat
  • 384803 2023-002
    Significant Deficiency Repeat
  • 384804 2023-002
    Significant Deficiency Repeat
  • 961228 2023-001
    Significant Deficiency Repeat
  • 961229 2023-003
    Material Weakness
  • 961230 2023-004
    Material Weakness
  • 961231 2023-005
    Material Weakness
  • 961232 2023-006
    Significant Deficiency
  • 961233 2023-003
    Material Weakness
  • 961234 2023-004
    Material Weakness
  • 961235 2023-005
    Material Weakness
  • 961236 2023-006
    Significant Deficiency
  • 961237 2023-003
    Material Weakness
  • 961238 2023-004
    Material Weakness
  • 961239 2023-005
    Material Weakness
  • 961240 2023-006
    Significant Deficiency
  • 961241 2023-002
    Significant Deficiency Repeat
  • 961242 2023-002
    Significant Deficiency Repeat
  • 961243 2023-002
    Significant Deficiency Repeat
  • 961244 2023-002
    Significant Deficiency Repeat
  • 961245 2023-002
    Significant Deficiency Repeat
  • 961246 2023-002
    Significant Deficiency Repeat

Programs in Audit

ALN Program Name Expenditures
14.850 Public and Indian Housing $5.46M
14.889 Choice Neighborhoods Implementation Grants $2.38M
14.872 Public Housing Capital Fund $1.87M
14.879 Mainstream Vouchers $1.09M
14.218 Community Development Block Grants/entitlement Grants $574,604
14.871 Section 8 Housing Choice Vouchers $244,041
14.195 Section 8 Housing Assistance Payments Program $240,266
14.896 Family Self-Sufficiency Program $168,232
14.267 Continuum of Care Program $115,390
14.870 Resident Opportunity and Supportive Services - Service Coordinators $71,309
14.239 Home Investment Partnerships Program $61,922
14.182 Section 8 New Construction and Substantial Rehabilitation $55,474