Finding Text
Criteria: Internal control policies and procedures should be in place to ensure the District can perform timely and accurate financial closeout procedures in order for the District to produce its monthly and annual financial statements. Furthermore, segregation of employees' duties is a common practice in an effective internal control environment. Segregation of duties is when specific employee functions related to important accounting areas are separated among different individuals to significantly reduce the risk that any one could intentionally misappropriate assets or unintentionally make errors. Policies should be in place requiring the segregation of certain duties. Condition: The Finance Director approved purchases, approved check runs, and balanced the bank statements. Had the District consistently used purchase orders signed by the appropriate Department heads and had the Superintendent reviewed and signed off on check runs, the District would have had better segregation of duties. Effect: The District was more susceptible to fraud or errors due to multiple functions being performed by the same individual. Cause: Internal controls and segregation of duties policies were not implemented during the year. Recommendation: We recommend the District create and adopt policies and procedures to be implemented which designate duties assigned to each staff member and ensures that there is proper segregation of duties in order to safeguard the District's assets from fraud or errors. District response: The District no longer exists due to consolidation. Internal controls will be practiced in the new district by all appropriate personnel.