Finding 541986 (2024-001)

Significant Deficiency
Requirement
N
Questioned Costs
$1
Year
2024
Accepted
2025-03-31
Audit: 350795
Organization: Lake Wales Housing Authority (FL)

AI Summary

  • Core Issue: The Authority failed to properly document and perform rent reasonableness checks before rent increases, leading to compliance deficiencies.
  • Impacted Requirements: The PHA must ensure rent is reasonable at initial leasing and during contract terms, maintaining proper records as per HUD regulations.
  • Recommended Follow-Up: Designate a staff member to review tenant files for compliance with rent reasonableness before any rent increase takes effect.

Finding Text

2024-001 - Rent Reasonableness Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Housing Choice Voucher Cluster Assistance Listing Number: 14.871 Federal Award Identification Number and Year: FL071 - 2024 Award Period: 07/01/2023-06/30/2024 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 one instance where the Authority could not provide a copy of the reasonable rent report to support the determination that the new rent was reasonable when compared to the market for the rent increase and two instances where the rent reasonableness was performed after the effective date and the housing assistance payment was paid before rent reasonableness was performed. Questioned Costs: $1,012 Context: Out of 8 files, 3 files 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: The Authority should designate an individual to review tenant files to ensure that rent reasonableness is properly performed before the effective date and maintained in the file. Views of Responsible Officials: There is no disagreement with the audit finding.

Corrective Action Plan

U.S. Department of Housing and Urban Development Housing Voucher Cluster – Assistance Listing No. 14.871 Recommendation: The Authority should designate an individual to review tenant files to ensure that rent reasonableness is properly performed before the effective date and maintained in the file. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: Tenant files will be reviewed prior to effective date to ensure rent reasonableness are done timely. Name of the contact person(s) responsible for corrective action: Albert Kirland Jr. Planned completion date for corrective action plan: April 1, 2025 If the U.S. Department of Housing and Urban Development has questions regarding this plan, please call Albert Kirland Jr. at 863 676-7414x12

Categories

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

Other Findings in this Audit

  • 1118428 2024-001
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
14.871 Section 8 Housing Choice Vouchers $2.03M
14.850 Public Housing Operating Fund $1.17M
14.872 Public Housing Capital Fund $5,942