Finding Text
Segregation of Duties
Condition: The Organization has a limited number of office personnel and accordingly, does not have adequate internal controls in certain areas because of a lack of segregation of duties. An effective internal control structure provides an adequate segregation of duties so that no one individual handles a transaction from its inception to its completion.
Criteria: Internal controls should be in place that provides reasonable assurance that proper segregation of duties is achieved.
Cause: The Organization has a limited number of office personnel and inadequate internal controls.
Effect: The failure to properly segregate duties increase the risk that misstatements may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions.
Recommendation: While it is recognized that the Organization’s office staff may not be large enough to permit an adequate segregation of duties in all respects for an effective internal control structure, it is important that the Organization be aware of this situation.
Response: The Board has already taken measures to attempt to comply even though the Organization is relatively small and the number of clerical/bookkeeping staff they can employ is limited. The Board has addressed this circumstance by active participation in the Organization’s affairs. This includes approval of disbursements, regular review of financial reports, regular review of bank reconciliations and budget comparisons.