THE HOUSING AND REDEVELOPMENT AUTHORITY OF ST. CLOUD, MINNESOTA

2022-001 Lack of Adherence to Policies in Administrative Plan - Reopening the Waitlist - Assistance Listing No. 14.871 Criteria: The HRA's administrative plan states that "if the waiting list has been closed, it cannot be reopened until the HRA publishes a notice in local newspapers of general circulation, minority media, and other suitable media outlets. The notice must comply with HUD fair housing requirements and must specify who may apply, where and when applications will be received. HRA Policy The HRA will announce the reopening of the waiting list at least 10 business days prior to the date applications will first be accepted. If the list is only being reopened for certain categories of families, this information will be contained in the notice. The HRA will give public notice by publishing the relevant information in suitable media outlets including, but not limited to: St. Cloud Times." Condition: The HRA opened its waitlist in 2022 and did not publish public notice of the opening in the St. Cloud Times. Cause: HRA staff did not follow the administrative plan as outlined in the criteria. We understand that the infrequency in which the HRA opens its waitlist may be a contributing factor to the lack of publication. Effect: The auditor is not in a position to determine the effect of the HRA not following its established policies. However, failure to follow policies increases the risk that noncompliance will occur and not be detected in a timely manner. Recommendation: We recommend the HRA takes steps to ensure that the policies in the administrative plan are followed. Response: The HRA intended to publish the opening of the Housing Choice Voucher waitlist in the St. Cloud Times. Due to staff error, it was not published. While we errored in not publishing notice in a local newspaper, the waitlist opening was widely advertised throughout our jurisdiction via the Central MN CoC, Adult Mental Health Initiative, FHPAP advisory committee, HousingLink, NAACP, St. Cloud Area Human Services Council, Hands Across the World, United Way 211, Emergency Food and Shelter Program Committee, SCSU Multicultural Resource Center, HRA website, HRA office signage, and at all HRA properties. The HRA has implemented additional internal controls to ensure the required publication is not missed in the future.

DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT Finding 2019-001: Housing Voucher Cluster ? Section 8 Housing Choice Vouchers Program ? CFDA No. 14.871 ? Special Tests and Provisions ? Reasonable Rent Criteria: The HRA must determine that the rent to owner is reasonable at the time of initial leasing. Additionally, the HRA must determine that reasonable rent during the term of the contract before any increase in rent to owner, and at the anniversary date if there is a five percent decrease in the published Fair Market Rent in effect 60 days before the HAP contract anniversary. The HRA must maintain records to document the basis for the determination that rent to owner is a reasonable rent. Condition/Context: During our audit, we tested 25 tenants for the rent reasonablness compliance requirement. Of the 25 tenants tested, one tenant did not have documentation to support a review of rent reasonableness which was required due to an increase of the rent to owner. The HRA performed a rent reasonableness review during the audit and it was determined that rent was reasonable, therefore no noncompliance was detected. Cause: Unknown. Effect: If rent reasonableness reports are not run as required, there is a risk that noncompliance could occur within the HRA. Questioned Costs: $0 Recommendation: We recommend that the HRA work to ensure that rent reasonableness reports are ran as required in the criteria above and retained in the tenant file. Client Response to Finding: Following the completion of audit fieldwork, the Voucher Programs Manager selected 40 tenant files to review in order to ascertain if this was more of an isolated incident or a larger problem. All files reviewed contained the rent reasonableness calculation. Following the review, a department meeting was held to discuss the finding and how important it is that all required processes and procedures followed. Staff also developed additional internal controls related to rent reasonableness that will be implemented.

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