Finding Text
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program Name: Housing Voucher Cluster
Assistance Listing Number: 14.871
Federal Award Identification Number and Year: MD015VO - 2023
Award Period: July 1, 2022 – June 30, 2023
Compliance Requirement: Special Tests and Provisions – Reasonable Rent
Type of Finding:
• Significant Deficiency in Internal Control over Compliance
• Other Matters
Criteria or specific requirement: The Authority must determine that the rent to owner is reasonable at the time of initial leasing. The Authority 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 was unable to provide adequate supporting documentation and evidence of internal control over compliance for reasonable rent requirements.
Questioned costs: Unable to determine.
Context: Exceptions were noted in 3 out of 40 files tested:
• 2 files did not include approval of the determined rent.
• The rent was not determined prior to the effective date of the move-in for 3 samples.
Cause: The Authority did not follow the established procedures in its Housing Choice Voucher Administrative Plan.
Effect: The Authority is not in compliance with rent reasonableness requirements.
Repeat Finding: Yes, see finding 2022-004.
Recommendation: We recommend the Authority review their process and internal controls for rent reasonableness to ensure compliance with HUD requirements and their administrative plan.
Views of responsible officials: There is no disagreement with the audit finding.