Finding 1225070 (2025-002)

Criteria: Internal control that supports the District's ability to initiate, record, process, and report financial data consistent with the assertions of management in the financial statements requires adequate segregation of accounting duties. Condition: During the year ended June 30, 2025, the District had a lack of segregation of accounting duties due to a limited number of office employees. This lack of segregation of accounting duties can be demonstrated in the following areas, which is not intended to be an all-inclusive list: • The Program Director is responsible for reporting without review • The Program Director is responsible for preparing reimbursement requests without review Management is aware of this condition and will take certain steps to compensate for the lack of segregation. However, due to the small accounting staff needed to handle all of the accounting duties, the cost of obtaining desirable segregation of accounting duties can often exceed benefits which could be derived. Due to this reason, management has determined a complete segregation of accounting duties is impractical to correct. Context: This finding impacts the internal control over financial reporting. Cause: There are a limited number of office employees. Effect or Potential Effect: The lack of adequate segregation of accounting duties could adversely affect the District's ability to record, process, summarize, and report financial data consistent with the assertions of management in the financial statements. Recommendation: Continue to review the accounting system, including changes that may occur. Implement segregation whenever practical.