Christian Care Cottonwood, Inc.Non-Profit

2025-001 U.S Department of Housing and Urban Development Mortgage Insurance Rental Housing CFDA #14.134 Eligibility Significant Deficiency in Internal Control over Compliance Criteria: Complete controls over internal controls require all tenant eligibility requirements to be supported by appropriate documentation. Uniform Guidance 2 CFR 200.303(a) requires non-Federal entities to establish and maintain effective internal control over Federal awards that provides reasonable assurance that the entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Effective internal controls over compliance should ensure that rental assistance is calculated accurately and in accordance with applicable program requirements. Condition: During our testing, one out of 15 tenant files tested received an assistance payment that was higher than allowed. Cause: The Organization’s internal review procedures did not identify the use of the incorrect assistance payment. Effect: The use of incorrect assistance payments increases the risk that the rental subsidy in connection with the Federal program may not be accurate. While no questioned costs were identified, the deficiency represents a breakdown in internal control over compliance. Questioned Costs: $10 Context/Sampling: A nonstatistical sample of 15 tenants out of 99 total were selected for testing. Repeat Finding from Prior Year: No. Recommendation: We recommend Christian Care management strengthen internal controls and oversight over the rental assistance calculations and tenant eligibility documentation to ensure accuracy of all assistance payments. Views of Responsible Officials: Management agrees with the finding.

Noncompliance and Significant Deficiency in Internal Control over Compliance Finding 2020-001 Eligibility U.S. Department of Housing and Urban Development CFDA #14.314 Assisted Living Conversion for Eligible Multifamily Housing Project Criteria: The Organization is responsible for examining and annually reexamining incomes of households occupying assisted living units and making appropriate adjustments to the tenant payment and the project rental assistance payments. Condition: During testing performed, we identified one tenant whose tenant payment calculation did not reflect the appropriate amount on HUD-50059. This resulted in both the tenant portion of rent and the project rental assistance payment amounts to not agree to HUD-50059 for a period of seven months. Questioned Costs: None. Context/Sampling: A nonstatistical sample of 8 tenants out of 27 total tenants were selected for eligibility testing. Cause: The procedures used by Christian Housing - Cottonwood, Inc. to calculate the tenant portion of rent did not identify the difference between the amounts listed on the form HUD-50059 and the actual amount charged to the tenant within a reasonable amount of time. Effect: Christian Housing - Cottonwood, Inc. failed to calculate the correct tenant portion of rent. Repeat Finding from Prior Year: No. Recommendation: We recommend Christian Housing - Cottonwood, Inc. review the method used to ensure that the tenant portion of rent calculated agrees to the amount of rent charged to the tenant. Views of Responsible Officials: Management agrees with the finding and has corrected the error.

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