oversight

The Other Place, Inc., Dayton, OH, Needs To Improve the Administration of Its Homelessness Prevention and Rapid Re-Housing Program Under the American Recovery and Reinvestment Act of 2009

Published by the Department of Housing and Urban Development, Office of Inspector General on 2010-04-30.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

                                                                   Issue Date
                                                                           April 30, 2010
                                                                   Audit Report Number
                                                                           2010-CH-1006




TO:         Jorgelle Lawson, Director of Community Planning and Development, 5ED


FROM:       Heath Wolfe, Regional Inspector General for Audit, 5AGA

SUBJECT: The Other Place, Inc., Dayton, OH, Needs To Improve the Administration of Its
           Homelessness Prevention and Rapid Re-Housing Program Under the
           American Recovery and Reinvestment Act of 2009

                                    HIGHLIGHTS

 What We Audited and Why

             We audited The Other Place, Inc.’s (The Other Place) use of the American
             Recovery and Reinvestment Act of 2009’s (Act) Homelessness Prevention and
             Rapid Re-Housing Program (program) funds. The Other Place was selected for
             audit based upon a citizen’s complaint to the Recovery Accountability and
             Transparency Board that was forwarded to our office. The complainant alleged
             that the City of Dayton, OH (City), The Other Place, and possibly Montgomery
             County, OH (County) engaged and set-up an unlicensed transitional housing
             shelter in violation of State of Ohio (State) and/or the City’s laws, and was leasing
             units far in excess of the true value for comparable units. Our objectives were to
             determine whether The Other Place used program funds effectively and efficiently
             and complied with the U.S. Department of Housing and Urban Development’s
             (HUD) requirements.

 What We Found

             The Other Place generally used its program funds in accordance with HUD’s and
             its requirements. It did not engage or set up an unlicensed transitional housing
             shelter in violation of State and/or City laws and did not lease units far in excess
           of the true value for comparable units. However, The Other Place’s
           administration of its program needs improvement. It provided rental assistance
           for units with program rents that were in excess of fair market rents for the area
           and for a larger unit than a program participant resided in. As a result, nearly
           $1,000 in program funds was not used effectively and efficiently or in accordance
           with HUD’s requirements.

           Further, The Other Place did not ensure that the initial program participant
           consultation and eligibility determination was completed in a timely manner.
           Program participants began receiving rental assistance beginning on October 1,
           2009, but the program application forms were not completed by the participants
           until December 2009. However, the participants were eligible to receive program
           rental assistance.

           We informed The Other Place’s executive director, the City’s director of planning
           and community development, the County’s community development manager,
           and the Director of HUD’s Columbus Office of Community Planning and
           Development of a minor deficiency through a memorandum, dated April 21,
           2010.


What We Recommend

           We recommend that the Director of HUD’s Columbus Office of Community
           Planning and Development require The Other Place to reimburse its program
           from non-Federal funds for the improper use of nearly $1,000 in program funds
           and implement adequate procedures and controls to ensure that its program is
           operated in accordance with HUD’s and its requirements.

           For each recommendation without a management decision, please respond and
           provide status reports in accordance with HUD Handbook 2000.06, REV-3.
           Please furnish us copies of any correspondence or directives issued because of the
           audit.

Auditee’s Response

           We provided our review results to the Director of HUD’s Columbus Office of
           Community Planning and Development and The Other Place’s executive director
           during the audit. We provided our discussion draft audit report to The Other
           Place’s executive director, City of Dayton and Montgomery County, OH,
           officials, and HUD staff during the audit. The executive director declined our
           offer for an exit conference.

           We asked the executive director to provide comments on our discussion draft audit
           report by April 16, 2010. The executive director provided written comments, dated


                                            2
April 13, 2010. The executive director generally disagreed with our finding. The
complete text of the written comments, along with our evaluation of that response,
can be found in appendix B of this audit report.




                                 3
                           TABLE OF CONTENTS

Background and Objectives                                                     5

Results of Audit
      Finding: The Other Place Needs to Improve Its Program Administration   7

Scope and Methodology                                                         9

Internal Controls                                                            10

Appendixes
   A. Schedule of Questioned Costs                                           12
   B. Auditee Comments and OIG’s Evaluation                                  13
   C. HUD’s and The Other Place’s Requirements                               19




                                            4
                       BACKGROUND AND OBJECTIVES

The Program. Authorized under Title XII of the American Recovery and Reinvestment Act of
2009 (Act), $1.5 billion became available until September 30, 2011, for the Homelessness
Prevention and Rapid Re-housing Program (program) administered by the U.S. Department of
Housing and Urban Development (HUD). Allocations to State and local recipients shall be used
for the provision of (1) short-term or medium-term rental assistance; (2) housing relocation; and
(3) stabilization services including housing search mediation or outreach to property owners,
credit repair, security or utility deposits, utility payments, rental assistance for a final month at a
location, moving cost assistance, and case management or other appropriate activities for
homelessness prevention and the rapid rehousing of persons who have become homeless.

The Other Place. The Other Place, Inc. (The Other Place) is a not-for-profit corporation
organized under the laws of the State of Ohio (State) that provides day shelter and support
services to homeless people. It provides an environment in which basic services are offered,
human needs addressed, and personal growth encouraged. It is governed by a board of trustees
and shall not consist of more than 27 persons. As of March 2010, there were 10 members.
Trustees shall serve for a term of 3 years or until their successors are elected. Officers include a
president, secretary, treasurer, and such other officers as the board of trustees may from time to
time determine are necessary.

The Other Place’s mission is to work to end homelessness by providing housing, services,
advocacy, and education. In addition, The Other Place provides case management services and
offers an intensive service coordination approach in which trained professionals provide
specialized services for homeless individuals, those at imminent risk of homelessness, and
previous homeless individuals and families.

The Other Place’s program is receiving $360,000 in Act funds from the City of Dayton
($281,500) and Montgomery County ($78,500). As of January 31, 2010, The Other Place used
$17,640 of program funds. The Other Place’s records are located at 1133 South Edwin C. Moses
Boulevard, Suite 306, Dayton, OH.

The City of Dayton and Montgomery County, OH. HUD allocated program funds for
communities to provide financial assistance and services to either prevent individuals and
families from becoming homeless or help those who are experiencing homelessness to be
quickly rehoused and stabilized. HUD used its Emergency Shelter Grant formula to allocate
program funds to metropolitan cities, urban counties, and States.

On August 14, 2009, HUD entered into a grant agreement with the City of Dayton (City) for
nearly $3 million in program funds. The agreement was pursuant to the provisions under the
Homelessness Prevention Fund, Division A, Title XII, of the Act. The City entered into a grant
agreement with The Other Place on September 23, 2009, for $281,500 for managing and
operating its program.




                                                   5
On August, 14, 2009, HUD awarded a grant to Montgomery County, OH (County), for nearly
$760,000 in program funds. The County is responsible for ensuring that each entity that
administers all or a portion of program funds or receives all or a portion of program funds to
carry out activities fully complies with the program’s requirements. The County entered into a
supplemental agreement with The Other Place pursuant to Resolution No. 09-1450, dated
September 15, 2009, for $78,500 in program funds.

Our objectives were to determine whether The Other Place used program funds effectively and
efficiently and complied with HUD’s and its requirements to include determining whether it (1)
determined and paid the appropriate rental assistance and (2) ensured that the initial program
participant consultation and eligibility determination was completed in a timely manner.




                                               6
                                RESULTS OF AUDIT

Finding: The Other Place Needs to Improve Its Program Administration
The Other Place administered its program contrary to HUD’s requirements. It provided rental
assistance for units with program rents that were in excess of fair market rents for the area and
for a larger unit than a program participant resided in. The overpayments occurred because the
County did not provide timely rent reasonableness schedules to The Other Place. Further, The
Other Place did not ensure that the initial program participants’ consultation and eligibility
determinations were completed in a timely manner. The delay occurred because the Other Place
lacked an understanding of the applicable program requirements. As a result, nearly $1,000 in
program funds was not used effectively and efficiently or in accordance with HUD’s
requirements.


 The Other Place Provided
 Excessive Rental Assistance

               The Other Place provided supportive services to unsheltered homeless persons
               through City and County programs using funds provided by the Act. The Dayton-
               Montgomery County program rent reasonableness policy requires that a HUD rent
               reasonableness form be completed by either the landlord, using other units it
               owns, or Eastway, a Dayton-Montgomery County program housing search
               provider, using comparable units advertised for rent with its database, which is
               updated weekly. The County was the entity responsible for providing schedules
               with the applicable fair market rents to The Other Place.

               The Other Place began housing program participants on October 1, 2009, when
               the participants entered into lease agreements with the landlord. It obtained a
               listing of Section 8 project-based market rents from the Dayton Metropolitan
               Housing Authority because it did not receive the schedules from the County. The
               Section 8 project-based market rents differed from the schedules eventually
               provided by the County on October 19, 2009. This discrepancy resulted in The
               Other Place’s paying excess rental assistance of $598 for 10 of the 11 program
               units. Further, The Other Place paid the rent for a one-bedroom unit when the
               unit was actually an efficiency unit, resulting in $372 in excessive rental
               assistance. This error occurred because the Section 8 project-based market rents
               did not include the rent for an efficiency unit.




                                                7
The Other Place Lacked an
Adequate Understanding of HUD’s
Requirements

         The Other Place did not ensure that the initial program participants’ consultation
         and eligibility determinations were completed in a timely manner. Program
         participants began receiving rental assistance on October 1, 2009, but the
         applications were not signed by the participants until December 2009. This delay
         was due in part to The Other Place’s not receiving the application form from the
         County until after the form was revised on October 14, 2009. Further, program
         applicants were hesitant to sign the forms, and they were not completed until
         December 2009. Federal Register Notice, FR-5307-N-01, dated May 19, 2009,
         Notice of Allocations, Application Procedures, and Requirements for Homelessness
         Prevention and Rapid Re-Housing Program Under the American Recovery and
         Reinvestment Act of 2009, requires that any individual or family provided with
         financial assistance through the program have at least an initial consultation with a
         case manager or other authorized representative who can determine the appropriate
         type of assistance to meet the needs of the applicant. Although the initial program
         participant consultation and eligibility determination and the applications were not
         completed in a timely manner, all participants were eligible to participate in
         program.

Conclusion

             The Other Place paid $970 ($598 plus $372) in excessive rental assistance
             because the County did not provide the rent reasonableness schedules in a timely
             manner. Further, it did not ensure that the initial program participants’
             consultation and eligibility determinations were completed in a timely manner.
             The delay occurred because the Other Place lacked an understanding of the
             applicable program requirements.

Recommendations

             We recommend that the Director of HUD’s Office of Community Planning and
             Development require The Other Place to

             1A.    Reimburse its program $970 ($598 for the improper rent reasonableness
                    determination plus $372 for using the improper unit size for the rent
                    determination) from non-Federal funds for the rental assistance cited in
                    this finding.

             1B.    Implement adequate procedures and controls to ensure that its program is
                    operated in accordance HUD’s and its requirements.


                                             8
                         SCOPE AND METHODOLOGY

To accomplish our objectives, we reviewed

           •   Applicable laws; Federal Register Notice, FR-5307-N-01, dated May 19, 2009;
               HUD’s program requirements at 24 CFR (Code of Federal Regulations) Part 582;
               and HUD’s program grant agreement with the City and the County.

           •   The City’s and the County’s 2008 consolidated plan substantial amendment for
               the program, their agreements with The Other Place, and the County’s board
               resolutions for the program.

           •   The Other Place’s general ledgers, policies and procedures, annual audited
               financial statements for 2008, memorandum of understandings, board meeting
               minutes, organizational chart, and grant agreements with the City and the County.

We also interviewed employees of The Other Place, the City, the County, and HUD.

We reviewed the following two allegations identified in the complaint forwarded to our office:
the City, The Other Place, and possibly the County engaged and set up an unlicensed transitional
housing shelter in violation of City and State laws and leased units far in excess of the true value
for comparable units. We also reviewed 11 program participant applications to determine
eligibility and whether program funds were used appropriately.

We performed our onsite audit work from January through February 2010 at The Other Place’s
office located at 1133 South Edwin C. Moses Boulevard, Suite 306, Dayton, OH. The audit
covered the period from June 21 through December 31, 2009, and was expanded as determined
necessary.

We conducted the audit in accordance with generally accepted government auditing standards.
Those standards require that we plan and perform the audit to obtain sufficient, appropriate
evidence to provide a reasonable basis for our finding and conclusions based on our audit
objectives. We believe that the evidence obtained provides a reasonable basis for our finding
and conclusions based on our audit objectives.




                                                 9
                              INTERNAL CONTROLS

Internal control is an integral component of an organization’s management that provides
reasonable assurance that the following controls are achieved:

     •   Program operations,
     •   Relevance and reliability of information,
     •   Compliance with applicable laws and regulations, and
     •   Safeguarding of assets and resources.

Internal controls relate to management’s plans, methods, and procedures used to meet its
mission, goals, and objectives. They include the processes and procedures for planning,
organizing, directing, and controlling program operations as well as the systems for measuring,
reporting, and monitoring program performance.



 Relevant Internal Controls

              We determined that the following internal controls were relevant to our audit
              objectives:

              •       Program operations - Policies and procedures that management has
                      implemented to reasonably ensure that a program meets its objectives.

              •       Validity and reliability of data - Policies and procedures that management
                      has implemented to reasonably ensure that valid and reliable data are
                      obtained, maintained, and fairly disclosed in reports.

              •       Compliance with laws and regulations - Policies and procedures that
                      management has implemented to reasonably ensure that resource use is
                      consistent with laws and regulations.

              •       Safeguarding resources - Policies and procedures that management has
                      implemented to reasonably ensure that resources are safeguarded against
                      waste, loss, and misuse.

              We assessed the relevant controls identified above.

              A significant weakness exists if management controls do not provide reasonable
              assurance that the process for planning, organizing, directing, and controlling
              program operations will meet the organization’s objectives.




                                               10
Significant Weakness

           Based on our review, we noted no significant weaknesses.

Separate Communication of a
Minor Deficiency

           We informed The Other Place’s executive director, the City’s director of planning
           and community development, the County’s community development manager,
           and the Director of HUD’s Columbus Office of Community Planning and
           Development of a minor deficiency through a memorandum, dated April 21,
           2010.




                                           11
                                  APPENDIXES

Appendix A

                SCHEDULE OF QUESTIONED COSTS

                           Recommendation
                               number            Ineligible 1/
                                  1A                $970
                                 Total              $970


1/   Ineligible costs are costs charged to a HUD-financed or HUD-insured program or activity
     that the auditor believes are not allowed by law; contract; or Federal, State, or local
     policies or regulations.




                                           12
Appendix B

        AUDITEE COMMENTS AND OIG’s EVALUATION

Ref to OIG Evaluation                        Auditee Comments




              April 13, 2010

              Ronald Farrell Assistant Regional Inspector General for Audit
              United States Department of HUD-Office of Inspector General
              200 North High Street Room 334
              Columbus, Ohio 43125


              Dear Mr. Farrell,

              I am writing in response to the discussion draft audit report of HUD’s Office of
              Inspector General for Audit dated April 2, 2010. As instructed our response includes
              our comments in regards to the issues contained in the draft report, subject: The Other
              Place, Dayton Ohio, Needs to Improve the Administration of Its Homelessness
              Prevention and Rapid Rehousing Program (HPRP) Under the American Recovery and
              Reinvestment Act of 2009.

              The audit officially began onsite February 1, 2010 at our administration offices
              located at 1133 S Edwin C Moses Boulevard, Dayton, Ohio. I and key staff were
              prepared with the requested documentation and presented them to Senior Auditor
              Kathleen Crago. The Other Place provided all agency financials, policy and
              procedures manuals for the entire organization, Board minutes, all contracts and
              access to bank records along with additional info for the period of June 1, 2009
              through December 30, 2009. The Other Place feels strongly as part of our response to
              this audit report, that it should be noted there were no significant weaknesses in any of
              these areas during the internal control portion evaluation of the audit. The Other
              Place operates its programs and services with the highest standards of conduct.




                                                13
Ref to OIG Evaluation                         Auditee Comments


Comment 1     It is our understanding now The Other Place was selected for audit based upon a
              citizen complaint to the Recovery Accountability and Transparency Board that
              alleged The Other Place and possibly The City of Dayton and Montgomery County
              engaged and set up an unlicensed transitional housing shelter utilizing Homelessness
              Prevention and Rapid Rehousing resources and also violating State and City Laws.
              We further understand the purpose of the audit was also to determine whether The
              Other Place used program funds effectively and efficiently and complied with the
              U.S. Department of Housing and Urban Development’s (HUD) requirements.

              We can agree with the initial comment on Page 1 of the Audit Report that states, ”The
              Other Place generally used its program funds in accordance with HUD’s and its
              requirements,” but would prefer the audit response would use a stronger indicator of
Comment 2     compliance than to use the word “generally.” “Generally” is vague and lacks the
              proper indication of our compliance with HUD’S guidelines. We fully agree with and
              will reiterate “The Other Place did not engage or set up an unlicensed transitional
              housing shelter in violation of State and/or City of Dayton, OH laws and did not lease
              units in far excess of the true value for comparable unit,” which is what initiated the
              audit originally.

              In response to the finding that states, “The Other Place’s administration of its program
              needs improvement in that we provided rental assistance for units with program rents
              that were in excess of fair market rents for the area and for a larger unit that a program
              participant resided in.” The Other Place as a subgrantee, administered its portion of
              the HPRP program in accordance to the guidelines provided by the direct Grantee, the
              City of Dayton and Montgomery County. According to HUD’s website, “HUD is
              committed to implementing Recovery Act investments swiftly and effectively as they
              generate tens of thousands of jobs, modernize homes to make them energy efficient,
              and help the families and communities hardest hit by the economic crisis.” In an
              effort to implement projects “swiftly” many communities lacked sufficient knowledge
              to execute HPRP programs in total accordance of the guidelines.

Comment 3     The Other Place was not provided Rent Reasonableness guidelines from our Project
              Administrator, the City of Dayton and Montgomery County, at the onset of the project
              to determine participant eligibility. Initially, we were instructed to use Fair Market
              Rent (FMR) calculations to determine rent reasonableness. We used the FMR
              schedule (see attached) that was created by Dayton Metropolitan Housing Authority,
              our local PHA which indicated $588 for a 1 bedroom unit as meeting Fair Market
              Rent guidelines. It was not until several weeks later that were we given a rent
              reasonableness chart by Dayton and Montgomery County. The chart, marked “draft”
              (see attached) differed from the fair market rent allowance we began operating the
              program under. That chart still did not incorporate rent with full utilities included or
              efficiencies.




                                                 14
Ref to OIG Evaluation                        Auditee Comments


              The units referred to in the audit report in which HPRP provided rental assistance
              (prevention) were being rented for $588 per month, which included all utilities. It
              was not until after our audit concluded did we find out the Fair Market Rent Chart we
              obtained from DMHA contained an error, specifically as it pertains to 1 bedroom
              units. (See Attached.) Dayton and Montgomery County’s Homeless HPRP program
              now provides a monthly updated rent reasonableness chart to all providers. Changes
              occur often as the rent reasonableness market study is based on many factors that
              change regularly. Program eligibility determinations based on rent reasonableness are
              done at enrollment and not reevaluated month to month based on new figures. The
              Other Place was utilizing the best and most current information, obtained from
              reputable agencies, in October 2009 when these participants were originally enrolled
              in the HPRP Program. We would have had no reason to reevaluate rent
              reasonableness during the period October 2009 through December 2009. So, We
              strongly disagree with the finding that The Other Place operated a Homeless
              Prevention and Rapid Rehousing Program that was not effective and efficient based in
              that we provided rental assistance for units with program rents that were in excess of
              fair market rents for the area.

Comment 4     In response to the finding of providing rental assistance to a larger unit than the
              participant resided in. The Other Place recognizes the opportunity for error with
              the design of HUD’s Homelessness Prevention and Rapid Rehousing Program
              (HPRP) Under the American Recovery and Reinvestment Act of 2009,
              specifically in providing rental assistance (prevention) to participants. With no
              HUD requirements for inspection of potential prevention program participant’s
              existing housing units, there is a reliance on participant self report, and/or
              landlord report on the size and condition of the unit. The leases for these
              particular units did not state bedroom size. No inspection to verify habitability,
              size, or location is required to determine program eligibility for prevention
              services. It was not until a site visit from the auditor, Kathy Crago did it become
              known that a specific unit was an efficiency unit as opposed to a one bedroom
              unit. This lack of verification through visual inspection is a flaw in HUD’s
              design of the Prevention portion of the HPRP program and could be happening
              throughout the country. The Other Place followed HUD’s and Dayton and
              Montgomery County’s guidelines in determining eligibility by relying on
              landlord information for the units in question. This is not an indication of The
              Other Place’s ability to operate the HPRP program effectively and efficiently, so
              we disagree with the finding.

              In regards to The Other Place ensuring program participant consultation and
              eligibility determination being completed in a timely manner, The Other Place
              HPRP program participants received consultation and program determination at
              the time of the enrollment in October 2009. The Other Place staff had




                                                15
Ref to OIG Evaluation                         Auditee Comments

              the information needed regarding housing status, income and resources to make an
              eligibility determination although Dayton and Montgomery County was still in the
              process of developing all of the required application forms and documentation
              requirements prior to October 1, 2009. The Other Place completed all required forms as
              they became available. Signatures on final versions of their completed application were
              obtained at various times. We did not ask clients to back date any documentation to
              coincide with the actual dates of enrollment and determination. Dates in sections of the
              HPRP application forms can possibly continue to differ from the dates of enrollment as
              additional information can be obtained at different times. While the actual paper
              application was completed at a later date this does not indicate that participant’s
              consultation and eligibility determination was not completed prior to enrollment. Case
              notes in client files would indicate that services and eligibility was done in a timely
              manner. Once the City of Dayton and Montgomery County finalized and distributed all
              required forms, documentation, and policies and procedures for the HPRP program. The
              Other Place had all participants moving forward immediately sign required paperwork
              upon completion. The Other Place disagrees with a finding of not ensuring program
              eligibility determination in a timely manner.

              Dayton and Montgomery County’s HPRP program and its subgrantees have continued to
              adjust and fine tune its administration of the HPRP resources since its beginning in
              October of 2009. Many changes came as a result of Dayton and Montgomery County
              seeking Technical Assistance from the HUD field office and/or clearer instruction from
              HUD Homeless Resource Exchange (HUDHRE) website. The Dayton and Montgomery
              County HPRP program, along with its subgrantees, including The Other Place, continues
              to provide valuable resources for the intended “at risk of literal homelessness, but for the
              assistance,” population with a better understanding of all program requirements.
              Adjustments to prevent possible recurrence of any of the initial oversights have been
              made to assure full compliance with all HPRP program guidelines. The Other Place
              should not be held responsible for any initial oversights that were a result of unclear
              guidance, timing issues or vague requirements that were either from the HPRP Grantee
              Dayton and Montgomery County or HUD itself.

Comment 5     As a good faith effort, The Other Place will seek the $970 reimbursement from the
              landlord of the property. This does not indicate our agreement with your conclusion
              “The Other Place lacked an understanding of the applicable program requirements, and
              therefore needs to reimburse HUD” but more as an indication of our commitment to
              providing the highest level of services in an ethical, moral and fiscally responsible
              environment.

              The Other Place is pleased to complete this audit process with our response to the draft
              findings and we fully support the finding that we did not operate a transitional housing
              program with HPRP funds, which is what initiated the original complaint. We stand




                                                16
Ref to OIG Evaluation                        Auditee Comments


              behind our administration of the HPRP program and disagree that we lacked knowledge
              or understanding of the project, and actually believe in contrast of that statement, that in
              fact, The Other Place has more knowledge and understanding than most organizations
              operating HPRP programs. The Other Place historically, currently and into the future
              will continue to be a good steward of all our resources. If you have any additional
              questions or comments feel free to contact me at (937)293-1945 or e-mail
              Tinap@theotherplace.org.

              Respectfully,
              Tina M. Patterson
              Tina M. Patterson
              Executive Director




              Attachments:
              DMHA FMR Schedule
              Rent Reasonableness Chart
              County Letter


              Cc: Jim Martone, The Other Place Board of Directors President




                                                17
                        OIG’s Evaluation of Auditee Comments

Comment 1   We spoke with The Other Place’s executive director before providing the audit
            notification letter on January 25, 2010, to discuss the audit’s purpose and why it
            was initiated. Further, the audit objectives and that the audit was initiated based
            upon a citizen’s complaint to the Recovery Accountability and Transparency
            Board that was forwarded to our office were included in our audit notification
            letter to the executive director.

Comment 2   We believe that generally it is an accurate reflection of The Other Place’s
            administration of its program considering the minor issues that we reported on.

Comment 3   While we agree that the County did not provide the rent reasonableness schedules
            in a timely manner and although The Other Place made a good effort in obtaining
            the schedule of rents, it failed to determine whether the rental assistance paid was
            in compliance with HUD’s standard of rent reasonableness or obtain comparable
            or market rents for the area from the City, County, or HUD’s Web site. The
            Other Place lacked a clear understanding of HUD’s requirements.

Comment 4   The Dayton-Montgomery County agreement with The Other Place states that it is
            obligated to monitor and control all employees to ensure that program regulations
            and requirement are followed. The program’s applicants must receive at least an
            initial consultation and eligibility assessment with a case manager who can
            determine eligibility and the appropriate type of assistance needed. According to
            the household member section of the intake and financial questionnaire, item #6
            specifically addresses the number of bedrooms in the unit.

Comment 5   The Dayton-Montgomery County agreement with The Other Place states that in
            the event that The Other Place violates any HUD regulations or requirements,
            including those related to the program, it shall assume full and complete
            responsibility for said violations, including repayment of improperly expended
            funds and payment of any penalty imposed.




                                             18
Appendix C

       HUD’S AND THE OTHER PLACE’S REQUIREMENTS

Federal Register Notice, FR-5307-N-01, dated May 19, 2009, Notice of Allocations, Application
Procedures, and Requirements for Homelessness Prevention and Rapid Re-Housing Program
Grantees Under the American Recovery and Reinvestment Act of 2009, Part IVA(a)(4), states
that the rental assistance paid cannot exceed the actual rental cost, which must be in compliance
with HUD’s standard of rent reasonableness. Rent reasonableness means that the total rent
charged for a unit must be reasonable in relation to the rents being charged during the same
period for comparable units in the private unassisted market and must not be in excess of rents
being charged by the owner during the same period for comparable nonluxury unassisted units.

HUD’s regulations at 24 CFR 582.305(b) state that HUD will only provide assistance for a unit
for which the rent is reasonable. For tenant-based rental assistance, project-based rental
assistance, and sponsor-based rental assistance, it is the responsibility of the recipient to
determine whether the rent charged for the unit receiving rental assistance is reasonable in
relation to rents being charged for comparable unassisted units, taking into account the location,
size, type, quality, amenities, facilities, and management and maintenance of each unit, as well as
not in excess of rents currently being charged by the same owner for comparable unassisted
units.

The Dayton-Montgomery County program rent reasonableness policy requires that a HUD rent
reasonableness form be completed by either the landlord, using other units it owns, or Eastway, a
Dayton-Montgomery County program housing search provider, using comparable units
advertised for rent with its database, which is updated weekly. Rent reasonableness means that
the total rent charged for a unit must be reasonable in relation to the rents being charged during
the same period for comparable units in the private unassisted market and must not be in excess
of rents being charged by the owner during the same period for comparable nonluxury unassisted
units. Comparable rents can be checked by using a market study, by reviewing comparable units
advertised for rent, or with a note from the property owner verifying the comparability of
charged rents to those of other units owned. For example, the landlord would document the rents
paid in other units.

The Dayton-Montgomery County program states that the program applicant must receive at least
an initial consultation and eligibility assessment with a case manager who can determine
eligibility and the appropriate type of assistance needed.




                                                19