Finding Text
Finding 2024 – 003 – Rent Reasonableness
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program Title: Housing Voucher Cluster
Assistance Listing Numbers: 14.871 and 14.879
Federal Award Identification Number and Year: FL080; 2024
Award Period: October 1, 2023 to September 30, 2024
Type of Finding: Significant Deficiency in Internal Control Over Compliance,Noncompliance (Other Matters)
Criteria or Specific Requirement: The PHA must determine that the rent to the 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 10 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 the testing of 80 housing voucher cluster tenant files, certain special provision
compliance deficiencies were noted as summarized below:
Number of Instances Finding
1 The rent reasonableness was not performed prior to the effective date.
Questioned Costs: Undeterminable
Context: During our testing, we reviewed 80 tenant files that required rent reasonableness
determinations; 1 tenant file contained errors as noted above.
Cause: The Authority failed to determine the reasonableness of the rent being charged before the
effective date of the HAP amount.
Effect: The Authority is not in compliance with federal regulations regarding the determination of
reasonable rent. Inaccurate data could cause Authority to be paying an unreasonable rent to the
landlord.
Repeat Finding: This is a repeat finding from previous years. The finding numbers are 2017-003,
2018-003, 2019-003, 2020-003, 2021-003, 2022-003, and 2023-003.
Recommendation: We recommend that the Authority designate an individual to review tenant files to
determine if a rent reasonableness has been performed and was completed in a timely manner. We
recommend the Authority to hire outside consultants to assist with reasonable rent determinations
or increase staffing in this area.
Views of Responsible Officials: There is no disagreement with the audit finding.