Finding 12149 (2022-001)

Significant Deficiency Repeat Finding
Requirement
P
Questioned Costs
-
Year
2022
Accepted
2023-06-14
Audit: 16224
Organization: Nutrition, INC (IN)
Auditor: Donovan CPAS

AI Summary

  • Core Issue: There is a lack of proper segregation of duties in the Nutrition department, as only one person has access to all financial records.
  • Impacted Requirements: This situation violates GAAP and Government Auditing Standards, which require multiple individuals to handle accounting responsibilities to safeguard assets.
  • Recommended Follow-Up: No immediate changes are recommended due to the department's size; however, management should monitor the situation and consider future adjustments as conditions change.

Finding Text

Finding 2022-001 ? Financial Statement and Federal Awards Program Information: 10.558 Department of Agriculture, Child and Adult Care Food Program Finding Resolution Status: Remains open and repeat finding. Information on Universe and Population: This is not applicable. Sample Size Information: This is not applicable. Statement of Condition: Compliance with generally accepted accounting principles (GAAP) and Government Auditing Standards require that certain accounting and administrative responsibilities must be performed by more than one person; however, only one person has access to all books and records. Due to the size of Nutrition, proper segregation of duties cannot be achieved without the cost exceeding any benefit. Criteria: Generally accepted accounting principles and Government Auditing Standards require management of Nutrition to establish policies to safeguard assets. Effect or Potential Effect: Because of inherent limitations in any internal control system, errors, irregularities, or instances of non-compliance may nevertheless occur and not be detected. Also, projection of any evaluation to future periods is subject to risk that procedures may become inadequate because of changes in conditions or that the effectiveness of the design and operation of policies and procedures may deteriorate. Cause: Nutrition lacks the size to adequately segregate duties. Recommendation: No recommendation. Due to the size of Nutrition, and the makeup of the staff, proper segregation of duties cannot be achieved without the cost exceeding the benefit, at this moment in time. Questioned Costs: $0 Views of Responsible Officials and Planned Corrective Actions: The views of the management of Nutrition are set out in the Corrective Action Plan.

Corrective Action Plan

Finding 2022-001 ? Financial Statement and Federal Awards Statement of Condition: Nutrition was not segregating duties of accounting and administrative responsibilities for internal control purposes. Status: Coming out of the pandemic impacted the ability to complete the segregation of duties process, due to the lack of staff. As a result, Nutrition is working to develop the processes that will help to implement the procedures that will segregate duties and will continue working with team members to implement processes to segregate duties moving forward. At this time, the development is on-going and will take place when the business growth warrants and supports such an action. Presently, adding additional staff to provide another layer of preparation, review, and monitoring would outweigh the costs.

Categories

Internal Control / Segregation of Duties

Other Findings in this Audit

  • 588591 2022-001
    Significant Deficiency Repeat

Programs in Audit

ALN Program Name Expenditures
10.558 Child and Adult Care Food Program $2.95M