Audit 399703

Criteria: Internal control is a process effected by CCUIH’s Board of Directors, management, and other personnel, designed to provide reasonable assurance regarding the achievement of objectives related to the effectiveness and efficiency of operations, reliability of financial reporting, and compliance with applicable laws and regulations. A sound system of internal control includes adequate segregation of duties so that no one individual has control over all phases of a transaction from initiation through completion. Condition: Due to limited staffing levels and resources available to CCUIH, certain elements of internal control that depend on proper segregation of duties are not fully in place. Specifically, a lack of segregation of duties exists within certain accounting functions, including cash disbursements, payroll processing, cash receipts, and certain financial reporting activities. Cause: CCUIH has a limited number of personnel, which restricts management’s ability to segregate accounting duties necessary to maintain adequate internal control. While this condition is common in organizations of similar size, the concentration of accounting responsibilities among a limited number of individuals increases internal control risk. Effect: The lack of adequate segregation of duties increases the risk that errors or irregularities in the CCUIH’s financial records could occur and not be detected in a timely manner during the normal course of operations. As a result, there is an increased risk of misstatements that could be material to the financial statements. Recommendation: Management should implement compensating controls to mitigate the risks associated with limited segregation of duties, such as enhanced management review, independent review of bank reconciliations and journal entries, and periodic oversight by the Board of Directors.

Criteria: Per guidance provided in 2 CFR part 200.512, the audit must be completed, and the data collection form and reporting package must be submitted within the earlier of 30 calendar days after receipt of the auditor’s report(s), or nine months after the end of the audit period. A six-month extension was provided for submission of the data collection form and reporting package for the reporting period. Condition: The financial statement audit was not completed within the allowed timeframe and the data collection form and reporting package were not submitted timely. Cause: The delay was caused by limited staffing and competing operational priorities. Effect: CCUIH filed a late submission of the data collection form and reporting package for the audit period. Recommendation: Management should implement procedures to ensure all required reports are prepared, reviewed, and submitted timely.