Finding Text
2022 - 003 ? HCVP Rent Reasonableness Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Housing Voucher Cluster Assistance Listing Number: 14.871 / 14.879 Federal Award Identification Number and Year: OK002 (various funding increments active during period 1/1/22-12/31/22) Award Period: January 1, 2022 through December 31, 2022 Type of Finding: ? Significant Deficiency in Internal Control over Compliance. ? Other Matters. Criteria: 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: During our testing, we noted the Authority did not have adequate internal controls designed to ensure that rent reasonableness requirements were being met. Questioned costs: None Context: During the testing of the Housing Choice Voucher Program new tenant files, one instance was noted where the Housing Authority failed to perform a determination of reasonable rent prior to move in. Cause: The Authority does not have controls in place to ensure it is meeting inspection requirements set by HUD. Effect: The Authority is not in compliance with program requirements over eligibility. Repeat Finding: The finding is a not repeat of a finding in the immediate prior year. Recommendation: We recommend management to designate one person to oversee the lease up process to ensure determination of reasonable rent is performed prior to processing of the move in. View of Responsible Officials: There is no disagreement with the audit finding.