Finding 1061979 (2023-004)

Finding 2023-004 – Segregation of Duties U.S. Department of Transportation Formula Grants for Rural Areas and Tribal Transit Program – ALN 20.509 Activities Allowed or Unallowed/Allowable Costs Condition: One position within the finance group had access to the blank checks, the ability to process invoices, and the responsibility for reviewing the vendor statements. Criteria: An effective system of internal accounting control necessitates an adequate segregation of duties so that no one individual handles a transaction from its inception to its completion. Cause: Due to the size of the finance group and transition that occurred during the year, we found some critical duties are combined and assigned to the available employees. Effect: The internal control system is more susceptible to errors and other irregularities, either intentional or unintentional, not being discovered. Repeat Finding: This is a repeat finding of 2022-004. Recommendation: Management should continue to review staff responsibilities and analyze where segregation of duties can be established and maintained. A final cross check of the invoice, purchase order, and check requisition should be done by someone that does not have access to any of the processes involved in generating the source documents. Views of Responsible Official and Planned Corrective Action: Management agrees with the finding. See separate Corrective Action Plan.