Finding 581977 (2020-004)

Criteria: Per 24 CFR section 982.54(d)(15), the Housing Authority must adopt a written administrative plan that establishes local policies for the method of determining that rent paid to an owner is a reasonable rent, initially and during the term of the housing assistance payment contract. Per 24 CFR section 982.507, the Housing Authority must determine that the rent to an owner is reasonable before any subsequent increase in rent is paid to the owner. Condition/Context: We could not determine whether the Housing Authority has a written administrative plan addressing reasonable rent determinations. The Housing Authority was also unable to provide documentation of reasonable rent for the period under audit for tenants. Our sample was not statistically valid. Questioned Costs: Not determinable. Cause: The lack of supporting documentation may be related to the Housing Authority changing voucher program administrators during fiscal year 2020. While the current administrator has access to tenant files, the rent reasonableness procedures performed in fiscal 2020 were done by a previous contractor. Also due to the Housing Authority falling behind on obtaining audits, the documents being requested by auditors are several years old and maybe have been purged. Effect: Rent paid to landlords may not be reasonable in comparison to other comparable unassisted units. Recommendation: The Housing Authority should ensure the vendor administering the program maintains proper records of rent reasonableness. The Housing Authority should also ensure it has a written policy for the method of determining that rent paid to an owner is a reasonable rent as required by 24 CFR section 982.54(d)(15). Views of Responsible Officials: WBHA is concerned that the current contract administrator for the HCV Program has failed to comply with providing the requested documentation as required by 24 CFR section 982.54(d)(15). We are engaging with our current HCV Contract Administrator (Allegiant Property Management, LLC) on expectations for compliance currently and in the future. WBHA is also exploring other contract administrators or possibly opting out of the HCV Program altogether and working with WHEDA to administer WBHA’s HCV Program.