Finding Text
Criteria: Good internal control includes a plan of organization, procedures, and records designed to safeguard assets and provide reliable financial records. A system of internal control should include proper segregation of duties so no one individual is capable of handling all phases of a transaction from beginning to end. Condition: The limited number of administrative employees results in an inadequate internal control structure. We noted the Village had a lack of segregation of duties as one person was capable of handling all aspects of processing transactions from beginning to end. Effect: A lack of segregation of duties increases the risk of possible errors or irregularities. Recommendation: We recommend the Village review the situation to determine whether the cost of properly segregating duties is worth the benefit. We further recommend the Village consider implementing certain compensating controls to reduce risk in this area. Response: The Village has reviewed the situation and determined that the cost to segregate duties outweighs the benefits. The Village is looking into ways to implement compensating controls to reduce the risk of lack of segregation of duties to a lower level.