FAC Explorer

Finding 1220059 (2025-001)

Material Weakness Repeat Finding
Requirement
P
Questioned Costs
-
Year
2025
Accepted
2026-06-29
Audit: 405239
Organization: Chisholm-Hibbing Airport Authority (MN)
Auditor: STERLE & CO LTD

AI Summary

  • Core Issue: There is a significant deficiency due to the lack of segregation of duties in financial processes.
  • Impacted Requirements: Effective control systems require a division of accounting duties to prevent errors or misappropriations.
  • Recommended Follow-Up: Board members should enhance oversight by reviewing bank activities, general ledger entries, and conducting periodic inspections of assets.

Finding Text

Lack of segregation of duties - significant deficiency Condition: Lack of segregation of duties over fiancial processes. Criteria: For an effective control system, division of accounting duties should exist to prevent errors or misappropriations from going undetected in the course of employees performing their assigned duties. Context: The lack of segregation of duties exists within the Authority as a whole over all of its accounting and reporting functions. This is a common circumstance in governments of similar size. Effect: Errors or misappropriations could occur and go undetected for a period of time. Questioned Costs: Not applicable Cause: Limited number of staff available to appropriately divide duties. Recommendation: The Authority's board memebers need to be cognizant of the issue and provide appropriate oversight. Such oversight includes careful review of bank activity as well as general ledger and journal entries. The board members should also periodically perform on site inspections of assets and financial records. Views of Responsible Officials and Corrective Actions: The Authority agrees with the recommendations and has approved a corrective action plan addressing additional oversight measures.

Corrective Action Plan

Actions Planned - The Authority is not in position to hire additional staff members for the sole purpose of eliminated the segregation of duties finding from our audit. The Airport Office Adminstrator communicates with the Executive Director and commission members regarding all major account transactions, including the recording of recurring and non-recurring jounral entry adjustments. The commission meets monthly and closely monitors the financial information provded to them. Official responsible: Airport Office Administrator Planned Completion Date - On-going monitoring Disagreement with Finding - none, the Authority concurs with the finding. Plan to Monitor - The Authority is aware of the situation and will monitor, as it deems appropriate. Monitoring will include commission member oversight for the interim and year-end reporting.

Categories

Internal Control / Segregation of Duties Reporting Significant Deficiency

Other Findings in this Audit

  • 1220054 2025-001
    Material Weakness Repeat
  • 1220055 2025-001
    Material Weakness Repeat
  • 1220056 2025-001
    Material Weakness Repeat
  • 1220057 2025-001
    Material Weakness Repeat
  • 1220058 2025-001
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
20.106 AIRPORT IMPROVEMENT PROGRAM, INFRASTRUCTURE INVESTMENT AND JOBS ACT PROGRAMS, AND COVID-19 AIRPORTS PROGRAMS $618,331