Finding Text
2025-001 (2024-003) – Segregation of Duties Type of Finding: (A) Material Weakness in Internal Control Over Financial Reporting Questioned Costs: None Condition Due to the small number of employees in the organization, adequate segregation of duties of the accounting functions was not in place before December 31, 2024. Starting in January 2025, internal controls were implemented to help segregate duties, however, as noted below, some issues were still present. • We noted no visible documentation of a review of the bank reconciliations by an appropriate supervisor. • We noted no review or approval of journal entries. • We noted no visible documentation of a review for many cash disbursements.Cause The small office environment makes segregation of duties difficult to manage at times. Effect The current process in place allows for both the initiation and concealment of misstatements that could go undetected. Recommendation We recommend management evaluate the current structure of the cash disbursement process, the account reconciliation process and the journal entry process and implement appropriate segregation of duties. View of Responsible Official and Corrective Action Plan CWA management is in agreement with this finding. They will develop and implement procedures requiring monthly independent reconciliations of all accounts to include bank reconciliations as well as the review of both journal entries and disbursements by an appropriate supervisor.