Finding Text
Significant Deficiency
2023-004 Special Tests and Provisions: Rent Reasonableness
Federal Program – U.S. Department of Housing and Urban Development AL #14.871
Grant Award No. – MN107-Housing Choice Voucher
Federal Award Year – 2023
Criteria or Specific Requirement – The Authority 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 – We tested compliance with the Authority’s rent reasonableness forms in 13 tenant
files and found that one tenant did not have a rent reasonableness form for an increase in rent.
The rent was deemed reasonable by the Authority once noted by the auditors. The error noted
remained undetected after completion of a quality control worksheet, which functions as the
Authority’s primary internal review process to ensure an annual certification, at minimum, was
performed and appropriate tenant information is documented.
Questioned Costs – None.
Context – We reviewed a sample of 13 of the Authority's 125 tenant files for rent
reasonableness requirements.
Effect – Housing assistance payments could have been paid to a tenant where rent was not
considered reasonable.
Cause – Upon change in rent during the term of HAP contracts, the tenant file did not contain
documentation comparing the rent of like-kind units.
Repeat Finding – This is not a repeat finding.
Recommendation – We recommend the Authority conduct a second part review of the file to
ensure all appropriate documents are included.
Views of Responsible Officials and Planned Corrective Actions – The Authority will have a
checklist on annual certifications to ensure all appropriate documents are included in each
tenant file.