Finding Text
Finding 2024-003
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program Titles: Housing Voucher Cluster - Section 8 Housing Choice Vouchers, Mainstream Vouchers and Emergency Housing Vouchers Programs
Federal Assistance Listing Number: 14.871, 14.879 and 14.EHV
Noncompliance – N. Special Tests and Provisions – Reasonable Rent
Non Compliance Material to the Financial Statements: No
Significant Deficiency in Internal Control over Compliance for Special Tests and Provisions
Criteria: Reasonable Rent. The Authority must do the following: The Authority must determine that the rent to owner is reasonable at the time of initial leasing. Also, the Authority 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 percent decrease in the published Fair Market Rent in effect 60 days before the HAP contract anniversary. The Authority 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: Based upon inspection of the Authority’s files and on discussion with management, there were newly leased units for which rent reasonablness evaluations were not performed.
Context: There were approximately one hundred and forty three (143) newly leased Housing Voucher Cluster units. Of a sample size of fifteen (15) newly leased units, rent reasonableness evaluations for five (5) units were not performed. Our sample size is statistically valid. Known Questioned Costs: $ 34,257 Cause: There is a significant deficiency for the Housing Voucher Cluster in internal controls over the compliance for the special tests and provisions type of compliance related to reasonable rent. The Authority has not properly considered, designed, implemented, maintained and monitored a system of internal controls that reasonably assures the programs are in compliance.
Effect: The Housing Voucher Cluster is in non-compliance with the special tests and provisions type of
compliance related to reasonable rent.
Recommendation: We recommend the Authority design and implement internal control procedures that will assure compliance with the Uniform Guidance and the compliance supplement.