Finding Text
2023 – 005 – Housing Voucher Cluster - Reasonable Rent
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program Name: Housing Voucher Cluster
Federal Award Identification Number and Year: VA003, 2022-2023
Assistance Listing Number: 14.871/14.879/14.EHV
Award Period: July 1, 2022 – June 30, 2023
Type of Finding: Material Weakness, Material Noncompliance (Modified Opinion)
Criteria or specific requirement:
The PHA’s administrative plan must state the method used by the PHA to determine that the rent to owner is reasonable in comparison to rent for other comparable unassisted units. The PHA determination must consider unit attributes such as the location, quality, size, unit type, and age of the unit, and any amenities, housing services, maintenance, and utilities provided by the owner.
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 5% 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 (24 CFR sections 982.4, 982.54(d)(15), 982.158(f)(7), and 982.507).
Condition: The Authority did not have sufficient internal controls over reasonable rent determinations to ensure compliance with HUD requirements.
Context: During our testing of 25 files for rent reasonableness requirements, we noted that 10 files had a reasonable rent determination that was not performed until after the effective date.
Questioned costs: $1,800
Cause: The Authority has had turnover in the staff who perform the rent reasonableness determinations, resulting in these processes being performed by less experienced and trained staff.
Effect: The Authority is not in compliance with HUD’s requirements over rent reasonableness.
Repeat Finding: No
Recommendation: We recommend the Authority review their reasonable rent determination process to ensure that it is performed before the rent is set to go into effect.
Views of responsible officials: There is no disagreement with the audit finding.