Finding Text
Criteria – Internal controls over safeguarding assets constitute a process, effected by an entity’s governing body, management and other personnel designated to provide reasonable assurance regarding prevention or timely detection of unauthorized transactions and safeguarding assets from error or misappropriation. Such processes include establishing policies addressing proper authorization of the disbursement. Disbursements should be approved by the Local Workforce Development Board prior to funds being disbursed. Condition –Three disbursements tested were paid to the Executive Director’s company and three disbursements tested were reimbursements to the Executive Director. Although the disbursements were approved by the Executive Director, the Executive Director is not an independent approver for these transactions. Cause – The Local Workforce Development Area’s policies and procedures do not require disbursements related to the Executive Director be approved by an independent person prior to payment. Effect – Lack of policies and procedures requiring independent approval of disbursements related to the Executive Director could result in unauthorized transactions and the opportunity for misappropriation. Recommendation – The Local Workforce Development Area should adopt written policies and procedures requiring independent approval of all disbursements prior to payment being made. Response and Corrective Action Planned – We will review policies and procedures for disbursements to ensure that all payments have an evidenced independent review prior to payment. We plan to implement these changes January 1, 2026. Conclusion – Response accepted.