Audit 309790

Condition and Criteria: Limited number of staff prevents separation of functions necessary to assure adequate internal control structure. Over the past few years, management has implemented several compensating controls to limit the severity of the deficiency, including: hiring an outsourced accountant who performs quarterly reviews, implementing a director-level review of expense reimbursements and purchase requests prior to disbursement, hiring a Director of Financial Operations, and having another staff member reconcile the bank statements. However, the staff member preparing the reconciliations is closely related to the Executive Director and the Executive Director remains responsible for performing substantially all bookkeeping and accounting functions, including having the ability to print and sign checks. Effect: Significant deficiency in internal controls. Cause: Limited staff and resources are available to provide ideal segregation of duties. Auditor’s Recommendation: We recommend the Organization continue to add compensating controls where prudent and to continue to rely on the mitigating controls of close oversight by the Board of Directors and to evaluate the oversight on a consistent basis. Views of Responsible Officials and Planned Corrective Actions: As noted above, The Trust for Tomorrow continues to add compensating controls each year when possible. For example, a Director of Financial Operations was hired during the last half of the fiscal year under audit and this individual has taken over certain responsibilities, including but not limited to general ledger coding, review and approval of invoices, processing timesheets, and handling expense reimbursement requests. Further, we will continue to review our processes to determine where duties can be segregated amongst existing staff. Additionally, the board will continue to provide close oversight of the Organization and evaluate that oversight on a consistent basis.

Condition and Criteria: Limited number of staff prevents separation of functions necessary to assure adequate internal control structure. Over the past few years, management has implemented several compensating controls to limit the severity of the deficiency, including: hiring an outsourced accountant who performs quarterly reviews, implementing a director-level review of expense reimbursements and purchase requests prior to disbursement, hiring a Director of Financial Operations, and having another staff member reconcile the bank statements. However, the staff member preparing the reconciliations is closely related to the Executive Director and the Executive Director remains responsible for performing substantially all bookkeeping and accounting functions, including having the ability to print and sign checks. Effect: Significant deficiency in internal controls. Cause: Limited staff and resources are available to provide ideal segregation of duties. Auditor’s Recommendation: We recommend the Organization continue to add compensating controls where prudent and to continue to rely on the mitigating controls of close oversight by the Board of Directors and to evaluate the oversight on a consistent basis. Views of Responsible Officials and Planned Corrective Actions: As noted above, The Trust for Tomorrow continues to add compensating controls each year when possible. For example, a Director of Financial Operations was hired during the last half of the fiscal year under audit and this individual has taken over certain responsibilities, including but not limited to general ledger coding, review and approval of invoices, processing timesheets, and handling expense reimbursement requests. Further, we will continue to review our processes to determine where duties can be segregated amongst existing staff. Additionally, the board will continue to provide close oversight of the Organization and evaluate that oversight on a consistent basis.