Finding Text
Federal Program
U.S. Department of Housing and Urban Development AL #14.871 – Significant Deficiency
Criteria
The Authority 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
We tested compliance with the Authority’s rent reasonableness forms in 40 tenant files and
found that three tenants did not have a rent reasonableness form for the current cost of rent.
The rent was deemed reasonable by the Authority once noted by the auditors.
Questioned Costs
None
Context
We reviewed a sample of 40 of the Authority’s 436 tenant files for rent reasonableness
requirements.
Effect
HAP payments could have been paid to a tenant where rent was not considered reasonable.
Cause
Upon change in rent or move-in to a new property during the term of the HAP contracts, the
tenant files did not contain forms comparing the rent of like-kind units.
Repeat Finding
Not a repeat finding.
Recommendation
We recommend there be a second party review of the file to ensure all appropriate documents
are included.
Views of Responsible Officials
The Authority will have a checklist on annual certifications to ensure all appropriate documents
are included in the file.