CHRISTIAN CARE COTTONWOOD VII, INC.

Significant Deficiency in Internal Control over Compliance and Noncompliance Finding 2020-001 Special Tests and Provisions U.S. Department of Housing and Urban Development CFDA #14.157 Supportive Housing for the Elderly Criteria: Christian Care Cottonwood VII, Inc. is required to create a residual receipts account for any surplus cash at year-end. HUD has deemed amounts in excess of $250 per unit, $2,500 in total for the 10 units operated by Christian Care Cottonwood VII, Inc., held in the residual receipts account are subject to recapture and must be sent to HUD by the PRAC renewal date. Condition: During testing performed, it was determined that the residual receipts account was overfunded by $5,796 as of December 31, 2020, as it was not sent back to HUD by the PRAC renewal date, June 1, 2020. Questioned Costs: None. Context/Sampling: N/A Cause: The procedures used by Christian Care Cottonwood VII, Inc. to monitor the residual receipts account balance and send excess funds back to HUD were not properly followed. Effect: Christian Care Cottonwood VII, Inc. failed to correctly remit excess residual receipts to HUD in a timely manner. Repeat Finding from Prior Year: No. Recommendation: We recommend Christian Care Cottonwood VII, Inc. review the methods used to ensure that excess residual receipts are properly remitted to HUD in a timely manner. Views of Responsible Officials: Management agrees with the finding.

Significant Deficiency in Internal Control over Compliance Finding 2020-002 Procurement, Suspension, and Debarment U.S. Department of Housing and Urban Development CFDA #14.157 Supportive Housing for the Elderly Criteria: Christian Care Cottonwood VII, Inc.?s internal controls over procurement and the written procurement, suspension, and debarment policy includes the requirement that procurement records and files for purchases in excess of the small purchase threshold ($10,000) shall include a contract. Condition: During testing performed, we identified the following issue: ? It was determined that an expenditure in excess of the small purchase threshold did not have a contract agreement per the procurement policy. Questioned Costs: None. Context/Sampling: A sample size of one expenditure in excess of $10,000 out of a population of one was selected for testing. Cause: Christian Care Cottonwood VII, Inc. was not following their formal procurement, suspension, and debarment policy and thus did not retain a contract. Effect: Christian Care Cottonwood VII, Inc. is not in compliance with the procurement guidelines under the Uniform Guidance. Repeat Finding from Prior Year: No. Recommendation: As an enhancement to controls over compliance, we recommend that Christian Care Cottonwood VII, Inc. consider modification or implementation of policies and procedures that would strengthen internal controls surrounding the procurement requirements and the management of these requirements. Views of Responsible Officials: Management agrees with the finding.

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