Finding Text
Federal Program
U.S. Department of Housing and Urban Development AL #14.871 & 14.879 – Significant Deficiency
Grant Award No.
MN192-Housing Choice Voucher & MN192-Mainstream Voucher
Federal Award Year
2024
Criteria
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 ethe HAP contract anniversary (24 CFR sections 982.4,
982.54(d)(15), 982.158(f)(7), and 982.507).
Condition
One tested tenant was receiving HAP who was not living in a unit that was deemed to have a
reasonable rent rate.
Questioned Costs
None
Context
We tested rent reasonableness compliance requirements on 22 of the Authority’s 220 tenant files and
found that one tenant was receiving HAP that did not meet the reasonable rent criteria.
Effect
The tenant received more HAP payments than allowed due to an excessive rent cost.
Cause
Lack of controls procedures and oversight during the year.
Repeat Finding
Not a repeat finding.
Recommendation
We recommend the Authority reviews procedures and controls over rent reasonableness to ensure an
accurate assessment is performed.
Views of Responsible Officials
Management recognizes the deficiency and plans to implement the auditor’s recommendation.