Finding Text
Finding 2020-002: Segregation of Duties
Federal Program: Research and Development Cluster (Education and Human Resources)
Assistance Listing Number and Title: 47.076 STEM Education
Name of Federal Agency, Pass Through Entity (when applicable), Award Number and Year: National Science Foundation: 1431638 (9/1/2014 – 8/31/2022), 1524963 (11/1/2015 – 9/30/2021), 1500529 (9/1/2015 – 8/31/2022), 1624185 (9/16/2016 – 8/31/2022), 1640791 (9/15/2016 – 8/31/2022), 1720869 (5/15/2017 – 4/30/2022), 1726113 (8/1/2017 – 9/30/2023), 1645003 (3/15/2017 – 2/29/2020), 1821462 (7/1/2018 – 6/30/2024), 1812860 (9/1/2018 – 8/31/2020), 1940925 (1/15/2020 – 12/31/2023), 1907950 (7/1/2019 – 6/30/2024), 2015205 (4/1/2020 – 3/31/2022), 2021059 (10/1/2020 – 9/30/2024)
Federal Program: Research and Development Cluster (Mathematical and Physical Sciences)
Assistance Listing Number and Title: 47.049 Mathematical and Physical Sciences
Name of Federal Agency, Pass Through Entity, Award Number and Year: National Science Foundation: 1821372 (10/1/2018 – 9/30/2024 pass through entity American Physical Society), 1834530 (9/1/2018 – 8/31/2025 pass through entity American Physical Society), 1938815 (8/1/2020 – 7/31/2024)
Federal Program: Research and Development Cluster (Science)
Assistance Listing Number and Title: 43.001 Science
Name of Federal Agency, Pass Through Entity: NNX16AR36A (8/24/2016 – 8/23/2021 pass through entity Temple University of the Commonwealth System of Higher Education)
Material Weakness in Internal Controls Over Compliance, Other matters
Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): As noted in 2 CFR 200.303 “The non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).”
Condition: The Chief Financial Officer is responsible for posting entries into the accounting system without a second level review, and obtaining all bank statements unopened while also having the ability to add or modify payees and unilaterally initiate and authorize electronic fund transfers such as automated clearing house payments. The CFO is also responsible for opening the mail which may contain payments by check, and can manually reduce receivable balances.
Cause: Accounting department employees have not been trained to perform tasks that would allow for a proper segregation of duties related to accounting entries. Employees outside of the accounting department are permitted to work from home, which limits the employees who can perform functions such as opening the mail.
Effect or Potential Effect: If any one employee can control all stages of a transaction, defalcations or irregularities could occur and not be detected timely.
Questioned Costs: None noted.
Identification as a Repeat Finding, if Applicable: 2019-001
Recommendation: We recommend that AAPT provide training to the Finance and Administration staff so that entries can be subject to supervisory review by an individual knowledgeable as to the propriety of the entries. We recommend that AAPT segregate the ability to initiate and authorize electronic payments. We recommend that an employee outside of the Finance and Administration department open the AAPT mail and create an initial recordation log of checks or cash received.
Views of Responsible Officials and Planned Corrective Actions: AAPT has instituted the segregation of duties of submitting and approval of electronic payments.
The senior accountant has been authorized to submit the ACH/Wire transfer requests. The CFO has the authorization of approval of submitted electronic payments. The change was activated around March 15, 2024
The staff will be trained on generating journal entries previous prepared by the CFO and supervised and approve by the CFO – completed date May 15, 2024
The administrative assistant of the CEO will come to AAPT twice weekly to process incoming mail and create an initial recordation log of checks or cash received. The administrative assistant will not have access in any system to enter/modify/delete any information related to checks that are received.
Anticipated Completion Date: January 2025
Responsible Official: Michael Brosnan, CFO