Finding Text
2023-002 – SPECIAL TESTS & PROVISIONS: RENT REASONABLENESS
Material Weakness/Material Noncompliance
U.S. Department of Housing and Urban Development
CFDA #: 14.871 – Housing Voucher Cluster
CRITERIA
The PHA may not approve a lease until the PHA determines that the initial rent to an owner is
a reasonable rent. (2) The PHA must redetermine the reasonable rent: (i) Before any increase
in the rent to an owner; (ii) If there is a 10 percent decrease in the published FMR in effect 60
days before the contract anniversary (for the unit size rented by the family) as compared with
the FMR in effect 1 year before the contract anniversary. (iii) If directed by HUD.
The PHA may also redetermine the reasonable rent at any other time.
At all times during the assisted tenancy, the rent to owner may not exceed the reasonable rent
as most recently determined or redetermined by the PHA. (24 CFR 982.507)
CONDITION
We identified 10 instances in which the Authority was required to perform an assessment to
determine if the rent requested by the landlord is reasonable. In all ten, the Authority did not
perform this rent reasonableness assessment.
CAUSE
The Authority experienced turnover in the administrative department.
EFFECT
The Authority cannot ensure that HAP payments to landlords were reasonable.
QUESTIONED COSTS
Likely questioned costs - $2,281,311.
CONTEXT
We selected a sample of 40 vouchers from a population of 153. This was not a statistically
valid sample.
REPEAT FINDING
Repeat of finding 2022-002
RECOMMENDATION
We recommend the Authority develop and implement a recertification checklist to accompany
the tenant file to ensure all required documentation is obtained and rent reasonableness
procedures are performed