Finding Text
Finding Number: 2024-001
Finding Type: Federal award finding
Federal Assistance Listing No.: 14.267
Program Name: Contiuum of Care Program
Federal Agency: U.S. Department of Housing and Urban Development
Pass-Through Entity: Multnomanh County
Grant Number: JOHS-SVCSGEN-15516-2023
Federal Award Year: July 1, 2023 through June 30, 2024
Control Deficiency Type: Significant deficiency over compliance
Instance of Noncompliance: No
Compliance Requirement: Special Tests and Provisions
Questioned Costs: None
Repeat Finding: N/A
Criteria: The Uniform Guidance in 2 CFR 200.303 requires that non-Federal entities receiving federal awards establish and maintain internal controls that provide resaonable assurance that the sub-recipient is managing the federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal Award.
Per 24 CFR 578.51 (g), “HUD will only provide rental assistance for a unit if the rent is reasonable. The recipient or sub-recipient must determine whether the rent charged for the unit receiving rental assistance is reasonable in relation to rents being charged for a comparable unassisted unit, taking into account the location, size, type, quality, amenities, facilities, and management and maintenance of each unit. Reasonable rent must not exceed rents currently being charged by the same owner for comparable unassisted units.”
Condition: Out of a non-statistical sample of 40 transactions, we noted two instances in which rent reasonableness determination was not performed, and two instances in which the rent reasonableness determination was calculated using the incorrect information. All of these instances consisted of rent assistance paid for units located outside Multnomah County.
Cause: The database used by program staff to perform a rent reasonableness analysis only included zip codes located within Multnomah County. The organization had no clear procedures in place to ascertain that testing of rent reasonableness was performed and documented for units located in areas not included in the County’s database.
Effect: The organization may accidently provide rental assistance that is not in compliance with HUD guidelines.
Questioned Costs: It was subsequently determined that all rental assistance provided met the resonableness test, and therefore, there are no questioned costs to be reported.
Audit Recommendation: We recommend that the organization review and enhance its existing written policies and procedures to ensure the rent reasonableness test and related documentation is performed on all the rental assistance awarded in accordance with the requirements of the federal program. In addition, the policies should include procedures for addressing special circumstances, should they arise.
Management’s Response: As of March 16, 2024, all Janus’ Rental Assistance Programming has been consolidated under two experienced Program Directors for whom Rental Assistance administration is a primary program component. Policies and procedures for obtaining required documentation have been updated and include a mandatory documentation checklist submitted together with payment request, and a new policy has been created for the rare circumstances when youth are housed outside our primary service area of Multnomah, Clark or Cowlitz counties.