Finding Text
Finding 2024-006: Special Tests and Provisions – Reasonable Rental Rates
Program Names and
Awarding Agencies: Continuum of Care Program, 14.267, direct award from the U.S.
Department of Housing and Urban Development and passed through
Detroit Wayne Integrated Health Network and Homeless Action Network of
Detroit
Finding Type: Material Weakness on Internal Controls over Compliance and
Noncompliance
Questioned Cost Amount: Based on deviations noted in our testwork the projected likely questioned
costs resulting in noncompliance are as follows:
Continuum of Care Program, 14.267: Unknown, ranging from $0 to
$200,000.
Context / Criteria: Where grants are used to pay rent for individual housing units, the rent paid
must be reasonable in relation to rents being charged for comparable units
taking into account relevant features. In addition, the rents may not exceed
rents currently being charged by the same owner for comparable
unassisted units, and the portion of rents paid with grant funds may not
exceed HUD-determined fair market rents.
Condition: It was noted that 3 out of 40 selected rent assistance payments did not
have a calculation showing whether the rent assistance was reasonable or
not.
Cause / Effect: Wayne Metropolitan Community Action Agency and Affiliates did not
maintain sufficient procedures to ensure rent payments were reasonable.
Recommendation: Uniform Guidance requires the Organization to determine rent
reasonableness. We recommend management review rent assistance
payments prior to disbursement to ensure all required elements are present
to comply with Uniform Guidance.
Views of Responsible
Officials and Corrective Management agrees with the finding. See accompanying corrective action
Actions: plan.