Audit Finding 2022-001 ? Lack of Segregation of Accounting Duties Criteria or Specific Requirement: Internal control that supports the HRA?s ability to initiate, record, process, and report financial data consistent with the assertions of management in the financial statements requires adequate segregation of accounting duties. Condition: During the year ended March 31, 2022, the HRA had a lack of segregation of accounting duties due to a limited number of office employees. This condition increases the risk that errors could occur which would not be prevented or detected and corrected, on a timely basis. Adequate segregation exists when the following components of a transaction are separate: authorization, custody of the related asset, recording, and reconciliation. This lack of segregation can be demonstrated in the following areas, which is not intended to be an all-inclusive list: ? The bookkeeper has access to checks, is an authorized check signer, receives the bank statements, mails checks, and processes payments. ? The bookkeeper has control over payroll checks, sets up employee records, inputs employees? hours, and processes payroll. Management is aware of this condition and has taken certain steps to compensate for the lack of segregation. However, due to the number of staff needed to properly segregate all of the accounting duties, the cost of obtaining desirable segregation of accounting duties can often exceed benefits which could be derived. Because of this reason, management has determined a complete segregation of accounting duties is impractical to correct. Context: This finding impacts the internal control for all significant accounting functions. Effect or Potential Effect: The lack of adequate segregation of accounting duties could adversely affect the HRA?s ability to initiate, record, process and report financial data consistent with the assertions of management in the financial statements. Cause: There are a limited number of office employees. Recommendation: Continue to review the accounting system, including changes that may occur. Implement segregation whenever practical.
Audit Finding 2022-002 ? Procurement Requirements Criteria or Specific Requirement: According to compliance requirements, HRA procurements under federal awards must be made in compliance with applicable federal regulations and other procurement requirements specific to an award or subaward. Condition: During testing, we noted supporting documentation was not available that showed that procurements were made in accordance with compliance requirements. Vendors appeared to be selected without the HRA obtaining more than one quote or bid. Context: This finding impacts HRA?s compliance with the procurement requirements. Questioned Costs: None. Effect or Potential Effect: The lack of proper quotes or bids is not in accordance with compliance requirements. Cause: The HRA appears to not be appropriately securing procurements. Recommendation: We recommend the HRA design and implement internal controls to ensure compliance with procurement compliance requirements.
Audit Finding 2022-001 ? Lack of Segregation of Accounting Duties Criteria or Specific Requirement: Internal control that supports the HRA?s ability to initiate, record, process, and report financial data consistent with the assertions of management in the financial statements requires adequate segregation of accounting duties. Condition: During the year ended March 31, 2022, the HRA had a lack of segregation of accounting duties due to a limited number of office employees. This condition increases the risk that errors could occur which would not be prevented or detected and corrected, on a timely basis. Adequate segregation exists when the following components of a transaction are separate: authorization, custody of the related asset, recording, and reconciliation. This lack of segregation can be demonstrated in the following areas, which is not intended to be an all-inclusive list: ? The bookkeeper has access to checks, is an authorized check signer, receives the bank statements, mails checks, and processes payments. ? The bookkeeper has control over payroll checks, sets up employee records, inputs employees? hours, and processes payroll. Management is aware of this condition and has taken certain steps to compensate for the lack of segregation. However, due to the number of staff needed to properly segregate all of the accounting duties, the cost of obtaining desirable segregation of accounting duties can often exceed benefits which could be derived. Because of this reason, management has determined a complete segregation of accounting duties is impractical to correct. Context: This finding impacts the internal control for all significant accounting functions. Effect or Potential Effect: The lack of adequate segregation of accounting duties could adversely affect the HRA?s ability to initiate, record, process and report financial data consistent with the assertions of management in the financial statements. Cause: There are a limited number of office employees. Recommendation: Continue to review the accounting system, including changes that may occur. Implement segregation whenever practical.
Audit Finding 2022-002 ? Procurement Requirements Criteria or Specific Requirement: According to compliance requirements, HRA procurements under federal awards must be made in compliance with applicable federal regulations and other procurement requirements specific to an award or subaward. Condition: During testing, we noted supporting documentation was not available that showed that procurements were made in accordance with compliance requirements. Vendors appeared to be selected without the HRA obtaining more than one quote or bid. Context: This finding impacts HRA?s compliance with the procurement requirements. Questioned Costs: None. Effect or Potential Effect: The lack of proper quotes or bids is not in accordance with compliance requirements. Cause: The HRA appears to not be appropriately securing procurements. Recommendation: We recommend the HRA design and implement internal controls to ensure compliance with procurement compliance requirements.