Finding Text
Segregation of Duties
Criteria: No one person should have access to both physical assets and the related accounting records or to all phases of a transaction.
Condition: Many of the accounting functions are performed by a few individuals. No approval process in place.
Cause: Limited staff available.
Effect: Material weakness in internal controls. Increased possibility of undetected errors or irregularities. Less likely errors or irregularities would be discovered internally. Financial statement misstatement caused by error or fraud that would not be detected or prevented by management.
Questioned Costs: None noted.
Recommendation: Board of directors remain involved with the review and oversight regarding the Organizations’ financial statements and budgets. Segregate functions between employees and put controls in place so that the accounting functions can be reviewed by someone other than the person recording them. Monthly financial activity such as journal entries, detail of significant asset and liability balances, bank statements and cancelled check images should be reviewed by another member of management for reasonableness. Views of Responsible Officials and Planned Corrective Actions: Management will continue to review processes to determine where improvements can be made. Our 2021 findings were not reported until mid-year 2022. As a part of Inspiration's corrective action, we
contracted with professional CPA firm, Butler CPA out of Kendallville, Indiana in August 2022. This has enhanced our efficiency, accuracy, and segregation of duties. The board of directors plays an active role in oversight of Inspiration Ministries Inc.’s activities. The monthly board packets include but are not limited to reconciled financial statements such as profit and loss statement and balance sheet.