Finding 1229073 (2025-001)

Material Weakness Repeat Finding
Requirement
P
Questioned Costs
-
Year
2025
Accepted
2026-09-08
Audit: 410531
Organization: CITY OF STEWART (MN)

AI Summary

  • Core Issue: The City lacks proper separation of duties in its internal controls due to a small business office staff.
  • Impacted Requirements: The inability to separate transaction execution, asset access, and transaction recording increases the risk of errors or fraud.
  • Recommended Follow-Up: The City should continue to separate incompatible duties as much as possible while balancing cost considerations.

Finding Text

Criteria: Generally, a system of internal control contemplates separation of duties such that no individual has responsibility to execute a transaction, have physical access to the related assets, and have responsibility or authority to record the transaction. Condition: Due to the limited size of the City's business staff, the City has limited segregation of duties. Questioned Costs: N/A Context: The City has informed us that the small size of its business office staff precludes proper separation of duties at this time. Effect: The City is unable to maintain separation of incompatible duties. Cause: Limited number of staff in the business office. Recommendation: We recommend that the City continue to separate incompatible duties as best it can within the limits of what the City considers to be cost beneficial.

Corrective Action Plan

Condition: Due to the limited size of the City's staff, the City has limited segregation of duties. Actions Planned in Response to Finding: The City reviews and makes improvements to its internal controls on an ongoing basis and attempts to maximize the segregation of duties in all areas within the limits of the staff available. Officer Responsible for Ensuring CAP: Mayor and Council Planned Completion Date: Not Applicable

Categories

Internal Control / Segregation of Duties

Other Findings in this Audit

  • 1229061 2025-001
    Material Weakness Repeat
  • 1229062 2025-002
    Material Weakness Repeat
  • 1229063 2025-003
    Material Weakness Repeat
  • 1229064 2025-004
    Material Weakness Repeat
  • 1229065 2025-001
    Material Weakness Repeat
  • 1229066 2025-002
    Material Weakness Repeat
  • 1229067 2025-003
    Material Weakness Repeat
  • 1229068 2025-004
    Material Weakness Repeat
  • 1229069 2025-001
    Material Weakness Repeat
  • 1229070 2025-002
    Material Weakness Repeat
  • 1229071 2025-003
    Material Weakness Repeat
  • 1229072 2025-004
    Material Weakness Repeat
  • 1229074 2025-002
    Material Weakness Repeat
  • 1229075 2025-003
    Material Weakness Repeat
  • 1229076 2025-004
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
66.468 DRINKING WATER STATE REVOLVING FUND $1.15M
66.458 CLEAN WATER STATE REVOLVING FUND $675,067
97.036 DISASTER GRANTS - PUBLIC ASSISTANCE (PRESIDENTIALLY DECLARED DISASTERS) $3,665