Finding Text
Segregation of Duties Criteria – Management is responsible for establishing and maintaining internal control. A good system of internal control provides for adequate segregation of duties so no one individual handles a transaction from its inception to completion. In order to maintain proper internal control, duties should be segregated so the authorization, custody and recording of transactions are not under the control of the same employee. This segregation of duties helps prevent losses from employee error or dishonesty and maximizes the accuracy of the Agency’s financial statements. Condition – Generally, one individual has control over the following areas for the Agency: (1) Accounting system - record keeping for revenues, expenses and related reporting. (2) Receipts - collecting, depositing, journalizing and posting. (3) Payroll - changes to the master list, preparation and distribution. Cause – The Agency has a limited number of employees and procedures have not been designed to adequately segregate duties or provide compensating controls through additional oversight of transactions and processes.
Effect – Inadequate segregation of duties could adversely affect the Agency’s ability to prevent or detect and correct misstatements, errors or misappropriation on a timely basis by employees in the normal course of performing their assigned functions.
Recommendation – The Agency should review its control activities to obtain the maximum internal control possible under the circumstances utilizing currently available staff or Agency Board members to provide additional control through review of financial transactions, reconciliations and reports.
Response – Due to the limited number of office employees, segregation of duties is very difficult. The fiscal officer will continue to review our procedures and implement additional controls where possible.
Conclusion – Response accepted. This comment was repeated from the prior year.