Audit 47922

INTERNAL CONTROL DEFICIENCY: Assistance Listing Number 20.205: Highway Planning and Construction Pass-through Entity Identifying Number: 56(107)-NC-56 Federal Award Year: 2022 Prior Year Finding Number: N/A U.S. Department of Transportation Passed through the Iowa Department of Transportation. Segregation of Duties over Federal Revenues ? The County Secondary Roads Department did not properly segregate custody, record-keeping and reconciling functions for revenues, including those related to federal programs. Criteria ? Management is responsible for establishing and maintaining internal control. A good system of internal control provides for adequate segregation of duties so no one individual handles a transaction from its inception to completion. In order to maintain proper internal control, duties should be segregated so the authorization, custody and recording of transactions are not under the control of the same employee. This segregation of duties helps prevent losses from employee error or dishonesty and maximizes the accuracy of the County?s financial statements. An effective internal control system also provides for internal controls related to ensuring proper accounting for all funds by reviewing reconciliations of bank and book balances. Condition ? Generally, one or two individuals in the offices identified may have control over the following areas for which no compensating controls exist:(1) Incoming mail is opened by an employee who is authorized to make entries to the accounting records.(2) Generally, one individual may have control over collecting, depositing, posting and daily reconciling of receipts for which no compensating controls exist. Cause ? The County offices noted above have a limited number of employees and procedures have not been designed to adequately segregate duties or provide compensating controls through additional oversight of transactions, processes and reports. Effect ? Inadequate segregation of duties and inadequate policies could adversely affect each County office?s ability to prevent or detect and correct misstatements, errors or misappropriation on a timely basis by employees in the normal course of performing their assigned functions. Recommendation ? Each official should review the control activities of their office to obtain the maximum internal control possible under the circumstances. The official should utilize current personnel, including elected officials, to provide additional control through review of financial transactions, reconciliations and reports. In addition, all bank accounts should be reviewed by an independent person, and a monthly report of voided receipts should be maintained. Secondary Roads Response and Corrective Action Planned ? With limited staff, we will attempt to segregate duties as much as possible. We will explore having state reimbursements directly deposited at the County Treasurer. Conclusions ? Response acknowledged. All offices should continue to review current operating procedures for the areas noted to obtain the maximum internal control possible. The officials should utilize current personnel to provide additional control through review of financial transactions, reconciliations and reports.

INTERNAL CONTROL DEFICIENCY: Assistance Listing Number 20.205: Highway Planning and Construction Pass-through Entity Identifying Number: 56(107)-NC-56 Federal Award Year: 2022 Prior Year Finding Number: N/A U.S. Department of Transportation Passed through the Iowa Department of Transportation. Segregation of Duties over Federal Revenues ? The County Secondary Roads Department did not properly segregate custody, record-keeping and reconciling functions for revenues, including those related to federal programs. Criteria ? Management is responsible for establishing and maintaining internal control. A good system of internal control provides for adequate segregation of duties so no one individual handles a transaction from its inception to completion. In order to maintain proper internal control, duties should be segregated so the authorization, custody and recording of transactions are not under the control of the same employee. This segregation of duties helps prevent losses from employee error or dishonesty and maximizes the accuracy of the County?s financial statements. An effective internal control system also provides for internal controls related to ensuring proper accounting for all funds by reviewing reconciliations of bank and book balances. Condition ? Generally, one or two individuals in the offices identified may have control over the following areas for which no compensating controls exist:(1) Incoming mail is opened by an employee who is authorized to make entries to the accounting records.(2) Generally, one individual may have control over collecting, depositing, posting and daily reconciling of receipts for which no compensating controls exist. Cause ? The County offices noted above have a limited number of employees and procedures have not been designed to adequately segregate duties or provide compensating controls through additional oversight of transactions, processes and reports. Effect ? Inadequate segregation of duties and inadequate policies could adversely affect each County office?s ability to prevent or detect and correct misstatements, errors or misappropriation on a timely basis by employees in the normal course of performing their assigned functions. Recommendation ? Each official should review the control activities of their office to obtain the maximum internal control possible under the circumstances. The official should utilize current personnel, including elected officials, to provide additional control through review of financial transactions, reconciliations and reports. In addition, all bank accounts should be reviewed by an independent person, and a monthly report of voided receipts should be maintained. Secondary Roads Response and Corrective Action Planned ? With limited staff, we will attempt to segregate duties as much as possible. We will explore having state reimbursements directly deposited at the County Treasurer. Conclusions ? Response acknowledged. All offices should continue to review current operating procedures for the areas noted to obtain the maximum internal control possible. The officials should utilize current personnel to provide additional control through review of financial transactions, reconciliations and reports.