Finding Text
Significant Deficiency in Internal Control over Compliance Criteria and Condition: The processing and recording of cash receipts and disbursements should be segregated among different individuals to reduce the risk of errors or irregularities. During our testing, we noted that the fiscal agent is responsible for both processing and recording these transactions. Cause: The Organization has limited staffing which restricted its ability to segregate financial responsibilities. Effect: A lack of segregation of duties over cash receipts and disbursements increases the risk that errors or misappropriations may occur and not be detected in a timely manner. Recommendation: We recommend the Organization work with the fiscal agent to ensure that responsibilities for processing and recording cash receipts and disbursements are segregated among different individuals. If staffing limitations prevent this, compensating controls should be implemented. Response: Management will work with the fiscal agent to strengthen controls by ensuring more than one employee is involved in processing and recording cash transactions. In addition, management will provide board oversight through periodic review of financial activity. Conclusion: Response accepted.