Finding Text
2024-001: Segregation of Duties (Significant Deficiency)
Criteria: A fundamental concept in an adequate system of internal control is the segregation of duties, which follows the basic premise that no one employee should have access to both physical assets and the related accounting records or to all phases of a transaction.
Condition/context: During the course of our audit, we noted that the Accounting Manager has access to all modules of the accounting system. Specifically, she has the ability to receive, deposit, and record cash receipts; initiate, record, and process general journal entries; and reconcile all accounts.
Cause: Due to the small size of the Wyoming Energy Authority (the Authority), there is only one individual responsible for its accounting functions, and as such, the ability to properly segregate duties is limited.
Effect: Without an adequate segregation of duties, the Authority could be susceptible to a misappropriation of assets and/or inaccurate financial reporting.
Identification as a repeat finding: Yes; see prior-year finding 2023-002.
Recommendation: While additional segregation of duties is difficult with the Authority’s limited staffing, management and the Board of Directors should remain cognizant of the lack of an adequate segregation of duties and implement mitigating controls when feasible. We also recommend that the Executive Director and the Board of Directors continue to review financial reconciliations and reports for reasonableness.
Views of responsible officials and planned corrective actions: Management concurs with the finding. See Exhibit I.