2024-004 – Significant Deficiency – Internal Control
Significant Deficiency in Internal Control: Management is responsible for the design and implementation of internal controls to ensure reporting is accurate, complete, and compliant with relevant regulations. Audit procedures noted that several r...
2024-004 – Significant Deficiency – Internal Control
Significant Deficiency in Internal Control: Management is responsible for the design and implementation of internal controls to ensure reporting is accurate, complete, and compliant with relevant regulations. Audit procedures noted that several reports tested for federal and state agreements were not reviewed and approved before submission or lacked documentation that a review or approval occurred. Staff turnover and change of responsibilities has led to insufficient controls to ensure reporting review and approval documentation prior to submission. Without proper review and approval, there is a heightened risk that reports may be inaccurate, incomplete, or non-compliant with regulatory requirements.
Recommendation: We recommend that the Organization prioritize training for staff involved in the preparation and review of reports. Clear guidelines, defined responsibilities, and established deadlines should be implemented to support accuracy and accountability. Additionally, efforts should be made to ensure continuity of internal controls in the event of staffing or responsibility changes. Management should periodically test these controls to ensure they operate effectively, particularly following changes in key personnel involved in the process.
Responsible Person for Corrective Action: Lindsay Mitchell, Director of Fiscal & Facilities
Corrective Action to be Taken:
The Fiscal Department has implemented a new agency-wide approval system to strengthen internal controls and streamline workflow processes. All relevant staff have received comprehensive training to ensure a smooth transition to the new software. The system enables submission of reports, journal entries, purchase orders, and supporting documentation for review and approval by Supervisors, Program Directors, and the President/CEO. The software maintains a complete audit trail, documenting the originator and each level of the approval. To ensure compliance and effectiveness, the Finance Director will conduct an internal audit six months into the fiscal year. This audit will evaluate adherence to established processes and procedures, confirm the effectiveness of internal controls, and identify any areas for improvement.
The anticipated completion date for this corrective action is 9/30/2025.