FAC Explorer

Finding 1179891 (2025-002)

Material Weakness Repeat Finding
Requirement
ABEILN
Questioned Costs
-
Year
2025
Accepted
2026-03-17
Audit: 392259
Organization: Red Oak Community School District (IA)
Auditor: NOLTE CORNMAN & JOHNSON PC

AI Summary

  • Core Issue: One employee has too much control over critical financial areas, increasing the risk of errors or fraud.
  • Impacted Requirements: Segregation of duties is not being properly enforced, which is essential for compliance with internal control standards.
  • Recommended Follow-Up: Review and redistribute responsibilities to ensure no single employee manages incompatible duties.

Finding Text

One important aspect of the internal control structure is the segregation of duties among employees to prevent an individual employee from handling duties which are incompatible. We noted one individual has control over portions of one or more of the following areas for the District relating to major federal programs; cash, investments, receipting, disbursements, capital assets, wire transfers, financial reporting and journal entries. See finding 2025-001.

Corrective Action Plan

For A/P - the District Office has the Secretary open all mail and deliver to intended recipients. When delivered to A/R, money is deposited in a timely manner (within 24 hours). A/R then prepares the deposit. The Deposit is then double-checked and initialed by another District Office employee before depositing. All accounts are reconciled weekly by A/R and monthly by the SBO. For Investments, there are two signers on the Bank Iowa accounts. All transactions are authorized by the Board, Superintendent, and then transactional is taken care of by the SBO. ACH/Wire Transfers - all ACH and Wire Transfers initiated by payroll are sent to the SBO by the Bank so there are two sets of eyes on them. Financial reporting is reviewed by the Superintendent and Board monthly. Journal entries are not initialed by another District Office Employee. We have made very concerted efforts to distribute duties without compromising accuracy.

Categories

Internal Control / Segregation of Duties Reporting

Other Findings in this Audit

  • 1179888 2025-002
    Material Weakness Repeat
  • 1179889 2025-002
    Material Weakness Repeat
  • 1179890 2025-002
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
10.555 NATIONAL SCHOOL LUNCH PROGRAM $333,276
84.010 TITLE I GRANTS TO LOCAL EDUCATIONAL AGENCIES $293,675
10.559 SUMMER FOOD SERVICE PROGRAM FOR CHILDREN $166,971
84.425 EDUCATION STABILIZATION FUND $139,317
10.553 SCHOOL BREAKFAST PROGRAM $85,527
21.027 CORONAVIRUS STATE AND LOCAL FISCAL RECOVERY FUNDS $75,719
84.027 SPECIAL EDUCATION GRANTS TO STATES $50,221
84.367 SUPPORTING EFFECTIVE INSTRUCTION STATE GRANTS (FORMERLY IMPROVING TEACHER QUALITY STATE GRANTS) $42,860
10.582 FRESH FRUIT AND VEGETABLE PROGRAM $32,956
84.424 STUDENT SUPPORT AND ACADEMIC ENRICHMENT PROGRAM $27,878
84.048 CAREER AND TECHNICAL EDUCATION -- BASIC GRANTS TO STATES $13,095