Finding Text
Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Housing Voucher Cluster Assistance Listing Number: 14.871 / 14.879 Federal Award Identification Number and Year: MD004 (various funding increments active during period 7/1/21-6/30/22) Award Period: July 1, 2021 through June 30, 2022 Type of Finding: ? Significant Deficiency in Internal Control over Compliance. ? Other Matters. Criteria: As a condition of admission or continued occupancy, 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 5 percent decrease in the published Fair Market Rent in effect 60 days before the HAP contract anniversary. The PHA 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: During our testing, we noted the Commission did not have adequate internal controls designed to ensure that rent reasonableness requirements were being met. Questioned Costs: Unknown Context: Testing of 40 HCVP tenant files for rent reasonableness standards revealed the following: 1 file that was missing the rent reasonableness comparison report to substantiate the contract rent. 1 file that was missing the lease amendment letter effective for the sampled contract rent change. Rent reasonableness comparison report was performed late, after the rent effective date. Cause: The Commission does not have controls in place to ensure it is meeting rent reasonableness requirements set by HUD. Effect: The Commission is not in compliance with program requirements over rent determination. Repeat Finding: Not a repeat. Recommendation: The Commission should implement processes to ensure that all proper documentation is being maintained during the rent approval process for every tenant. View of Responsible Officials: There is no disagreement with the audit finding.