Finding Text
2025-002 - Segregation of Duties (design deficiency) Criteria: A good system of internal control provides for an adequate segregation of duties so that no one individual handles a transaction from its inception to completion. Condition: There is a lack of proper segregation of duties between the functions of record keeping, asset custody and authorization. Context: Due to the limited number of office personnel within the Housing Authority, segregation of the accounting functions necessary to ensure adequate internal accounting control is not possible. This is not unusual in operations the size of Housing Authority; however, the Housing Authority’s management should constantly be aware of this condition and realize that the concentration of duties and responsibilities in a limited number of individuals is not desirable from an accounting point of view. Effect: Inadequate segregation of duties could adversely affect the Housing Authority’s ability to detect misstatements in amounts that would be material in relation to the financial statements in a timely period by employees in the normal course of performing their assigned functions. Cause: The Housing Authority does not have the economic resources needed to hire additional qualified accounting staff in order to properly segregate duties. Recommendation: We recommend that the Housing Authority’s board and management be aware of the lack of segregation of duties of the accounting functions and, where possible, implement oversight procedures to ensure that the internal control policies and procedures are being implemented by staff to the extent possible. Views of responsible officials and planned corrective actions: The Housing Authority will continue to segregate duties whenever possible and implement oversight procedures to ensure that the internal control policies and procedures are being implemented by staff to the extent possible.