Finding 1084786 (2024-002)

Finding 2024-002 Segregation of Duties Rural Rental Housing Loan Program Cluster: Rural Rental Housing Loans, CFDA #10.415 – Year ended August 31, 2024 Rural Rental Housing Payments, CFDA #10.427 – Year ended August 31, 2024 Condition: Due to the size of the organization, there are not enough employees to adequately segregate incompatible duties. Criteria: No individual should have access to the performing, recording and reconciling of any one type of transaction. Effect: Because of the lack of segregation of duties, it is possible for an employee to misappropriate funds and conceal the transaction. Cause: Organizational limitations do not allow the hiring of additional employees. Auditor’s Recommendation: Because it is neither practical nor cost-efficient to have additional employees, the Board should continue to approve expenditures, sign checks, and periodically review the financial statements. Grantee Response: We concur with the recommendation.