Finding Text
Federal Program
U.S. Department of Housing and Urban Development AL #14.871 – Material Weakness
Criteria
The Program required the Authority to determine that the rent to the owner is reasonable at the
time of initial leasing and during the term of the contract (a) before any increases 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.
Condition
It was noted during testing of tenant files that one file did not have a rent reasonableness
calculation for the increase in rent.
Cause
Turnover of staff and lack of controls.
Questioned Costs
Undeterminable
Context
We selected a sample of fourteen tenants out of a total of 132 tenants.
Effect
The rent may not be reasonable.
Recommendation
We recommend that the Authority review the procedures for maintaining and reviewing tenant
files to ensure required documentation is available to support the rent to owner.
Repeat Finding
This is not a repeat finding.
Views of Responsible Officials
Management will continue to educate new staff and make sure they understand the importance
of compliance with all policies. We will continue to emphasize the importance of documentation
and reviewing checklists to improve our processes.