Finding Text
Audit Finding 2023-004 – Special Tests and Provisions: Rent Reasonableness
Criteria:
The Program required the Authority to determine that the rent to the owner is reasonable at the time of initial leasing and during the term of the contract (a) before any increase in the rent to owner and (b) at the HAP anniversary if there is a 5 percent decrease in the published Fair Market Rent in effect 60 days before the HAP contract anniversary.
Condition:
It was noted during testing of tenant files that none of the files had a reasonable rent calculation for the increase in rent. The Authority performed the calculations but did not include them in tenant files.
Cause:
The Authority was not aware that they needed a copy of the calculation in each tenant file.
Effect:
The Authority is not in compliance with the rent reasonableness requirements.
Recommendation:
We would recommend the Authority puts a copy of the calculation in each tenant file.
Views of Responsible Official:
Management agrees with the finding.