Finding 1130242 (2024-001)

MATERIAL WEAKNESS 2024 – 1 Segregation of Duties Criteria: Duties should be segregated to provide reasonable assurance that transactions are handled properly. Condition: There is a lack of segregation of duties among Town personnel. Effect: Transaction could be mishandled. Cause: There are a limited number of personnel for certain functions. Recommendation: The duties should be separated as much as possible and alternative controls should be used to compensate for lack of separation. Management Response: The Town agrees that there is a lack of segregation of duties due to single person finance staff and has segregated functions with the manager and clerk when possible. Review procedures are in place that are performed by the Manager or management team, Mayor, Mayor Pro Tem and Board to provide reasonable assurance that the financial statements are not misstated, however the Town also recognizes that reasonable assurance takes into consideration that the cost of the control should not exceed the benefits. Cash receipts are handled by clerk. The Board also receives a monthly financial report and check register. The manager receives direct confirmation from the County for County collected revenues that are direct deposited to the Town and reviews all checks before the Mayor or Commissioner signs the check. The manager also reviews bank reconciliation on monthly basis and has access the financial software to review any accounts on a random basis. The Mayor or Commissioner manually signs checks in order to have a second review of checks before they are mailed by clerk.