Finding 1138051 (2023-003)

Significant Deficiency
Requirement
P
Questioned Costs
-
Year
2023
Accepted
2025-05-27

AI Summary

  • Core Issue: The District lacks adequate separation of accounting duties, which increases the risk of errors and fraud.
  • Impacted Requirements: Employees should not have access to both physical assets and related accounting records or control all phases of a transaction.
  • Recommended Follow-Up: Explore options to separate incompatible duties, even with a small staff, to strengthen internal controls.

Finding Text

One of the most critical areas of a District's internal control structure is the separation of accounting duties. The District has inadequate separation of accounting duties. The basic premise is that no one employee should have access to both physical assets and the related accounting records or to all phases of a transaction, including the capability to prepare the billings, receive the cash, deposit the cash, prepare the cash receipts journal, and reconcile the bank accounts. Although the small size of the District's office staff limits the extent of separation of duties, consideration should be made to separate incompatible duties.

Categories

Internal Control / Segregation of Duties HUD Housing Programs

Other Findings in this Audit

Programs in Audit

ALN Program Name Expenditures
10.760 Water and Waste Disposal Systems for Rural Communities $1.89M