Finding 1236574 (2023-001)

Segregation of Duties - Material Weakness Federal Program: Assistance Listing #14.228 Community Development Block Grants - CV - Small Business Assistance Program, Passed Through Pennsylvania Department of Community and Economic Development, Pass-Through Entity Identifying Number: C000082605 Prior Year Finding Number: N/A Criteria: Internal control is a process, which captures and properly records transactions, safeguards assets and assures compliance with laws and regulations. One critical element of internal control is adequate segregation of duties between accounting functions. Condition/Context: The responsibility for performance of certain accounting duties, principally as related to review and approval of the award application and eligibility criteria is vested in a limited number of employees wherein there is also a familial relationship amongst individuals overseeing the program, such that there is an overall lack of segregation of duties. Questioned Costs: N/A Cause: The Center has limited staff amongst whom duties can be segregated and certain of the staff members involved in the oversight of the program were related to each other. The Center made a risk-based decision that the cost of hiring additional personnel would outweigh the benefits to be derived. Effect: The Center cannot be assured that errors or irregularities that may occur will be prevented or detected and corrected on a timely basis by its internal control system. Recommendation: We recommend that the Center be aware of the lack of adequate segregation of duties and the familial ties amongst employees and involve other individuals and/or the Board in direct oversight of program operations. Views of Responsible Officials and Planned Corrective Actions: The Center understands and will seek to delineate responsibilities as best able with available staff. Furthermore, the Board of Directors will provide oversight of the ongoing activities; see corrective action plan.