Finding Text
Finding 2024-001 – Segregation of Duties (Material Weakness)
Criteria
The Organization is responsible for ensuring they maintain appropriate segregation of duties to mitigate
any one individual from handling all aspects of the transaction cycles.
Conditions and Context
Due to the staff turnover in the Finance and Administration Departments, the finance officer has become
responsible for most of the accounting functions to include cash receipts, cash disbursements, payroll,
accruals, all journal entries, and financial statement preparation. Additionally, he opens the mail and
reconciles the bank statements.
Effect
The Organization does not have mitigating controls to ensure that no one employee has access to both
physical assets and the related accounting records, or to all phases of a transaction.
Recommendation
We recommended that the Organization uses the segregation matrix as it continues to restructure staffing
to ensure that no one person is responsible for all the components of a transaction cycle. Until segregation
of duties are effectively put in place, we recommend the Executive Director and/or a Board member be
utilized to share responsibilities.
Agency Response:
LearningWorks is utilizing a temporary plan that engages existing staff in aspects of segregation. The
recently revised Finance Manual includes a full matrix that explicitly includes additional finance staff to
ensure segregation of duties through the transaction cycle. LearningWorks is committed to and engaged in
hiring a Finance Associate. The agency will incorporate these criteria and the matrix in our routine
operations. Additionally, we are willing to institute further recommended practices that will remediate this
finding.