Finding Text
2022-002. Special Tests and Provisions United States Department of Housing and Urban Development: Continuum of Care Program Assistance Listing No. 14.267 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: In our testing, there were instances in which comparable rents for the area were not documented and maintained in tenant files, to provide documentation of compliance with the criteria. Cause: The Organization did not have an adequate control in place for the review by a supervisor of every tenant file to ensure that the permanent documentation to conclude that reasonable rent was being charged. The Organizations has a control in place, instead, which required review of a selection of tenant files. Effect: The Organization could potentially not be in compliance with the requirement to ensure that grant funds to pay rent were used for reasonable rent in relation to comparable rent in the area. Questioned Costs: None reported. Context: During a review of tenant files, it was noted that documentation regarding comparable rentals was not included within the file. The Organization did maintain for reference the FY 2022 and FY 2023 Nassau-Suffolk, NY HUD Metro FMR Areas FMRs for All Bedroom Sizes, and also used this to assess reasonable rent. Identification of a Repeat Finding: This is not a repeat finding. Recommendation: The Organization should implement procedures for supervisor review of documents and approval of tenant files to ensure all proper documentation to support reasonable rent is maintained. Views of Responsible Officials of Auditee: The Organization agrees with the finding and will put proper procedures in place to ensure written documentation is maintained in tenant files, to support that the grant funds to pay rent were used for reasonable rent in relation to comparable rent in the area.