Christian Care Cottonwood, Inc.

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.