Finding 389946 (2023-002)

Significant Deficiency
Requirement
N
Questioned Costs
-
Year
2023
Accepted
2024-03-29

AI Summary

  • Core Issue: The housing authority failed to provide a required reasonable rent report for a rent increase in one tenant file.
  • Impacted Requirements: The PHA must ensure rent is reasonable at initial leasing and during contract terms, maintaining documentation for compliance.
  • Recommended Follow-Up: Designate a staff member to review tenant files for compliance with rent reasonableness requirements.

Finding Text

Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Housing Choice Voucher Program Assistance Listing Number: 14.871/14.879 Federal Award Identification Number and Year: FL017 and 2022/2023 Award Period: 7/1/22-6/30/23 Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or Specific Requirement: The PHA must determine that the rent to 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 five 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: Of the tenant files provided, auditor noted the following item: One instance where the housing authority could not provide copy of reasonable rent report for a rent increase. Questioned costs: N/A Context: Out of 40 files, 1 file contained errors as noted above. Cause: The Authority failed to provide adequate monitoring and oversight to ensure compliance with HUD rules and regulations, as well as their administrative policy. Effect: The Authority does not have adequate procedures in place to ensure that rent reasonableness is performed for rent increases 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. View of responsible officials: There is no disagreement with this audit finding.

Corrective Action Plan

Recommendation: The Authority should designate an individual to review tenant files to determine if a rent reasonableness has been performed. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: The HACMB currently has a Quality Control Coordinator who is designated to review samples of tenant files to ensure compliance. The HACMB has reviewed its Quality Control process for areas of improvement; (1) The Quality Control Coordinator will increase the number of file samples that are undergoing the Quality Control process. (2) The Quality Control Coordinator will hold bimonthly reviews with the specialists to ensure the same standard processes are being followed and to focus on retaining the supporting document in the files. The Section 8 staff will be notified of the appropriate action to take regarding any finding in the files. Name(s) of the contact person(s) responsible for corrective action: Suzie Millien Director of Section 8-HCV Planned completion date for corrective action plan: 3/31/2024.

Categories

HUD Housing Programs Subrecipient Monitoring Significant Deficiency Internal Control / Segregation of Duties

Other Findings in this Audit

  • 389943 2023-001
    Significant Deficiency
  • 389944 2023-001
    Significant Deficiency
  • 389945 2023-001
    Significant Deficiency
  • 389947 2023-002
    Significant Deficiency
  • 389948 2023-002
    Significant Deficiency
  • 966385 2023-001
    Significant Deficiency
  • 966386 2023-001
    Significant Deficiency
  • 966387 2023-001
    Significant Deficiency
  • 966388 2023-002
    Significant Deficiency
  • 966389 2023-002
    Significant Deficiency
  • 966390 2023-002
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
14.182 Section 8 New Construction and Substantial Rehabilitation $3.48M
14.850 Public and Indian Housing $988,593
14.872 Public Housing Capital Fund $621,711
14.871 Section 8 Housing Choice Vouchers $542,105
14.879 Mainstream Vouchers $518,562
14.249 Section 8 Moderate Rehabilitation Single Room Occupancy $120,866
14.896 Family Self-Sufficiency Program $31,125