Finding 1239145 (2025-002)

Finding 2025-002 –Limited Segregation of Duties Significant Deficiency in Internal Control over Financial Reporting and Compliance Criteria: Uniform Guidance requires non-Federal entities to establish and maintain effective internal controls over financial reporting and compliance. Condition: The auditors noted one signature on sampled checks related to project vendor payments. Although there was evidence of oversight over the requisition packets submitted to the Pennsylvania Broadband Development Authority (the Agency) for reimbursement, we did not identify adequate segregation of duties among personnel responsible for submitting requisitions, performing accounting, recordkeeping, and bank reconciliation functions, and handling the receipt and application of federal funds against outstanding loan balances. Cause: The Organization lacked adequate segregation of duties due to limited staff. Effect/Potential Effect: Unauthorized purchases or fraudulent disbursements could occur that could go undetected. Lack of segregation of duties could result in a financial statement misstatement by error or fraud that could go undetected by the management. Questioned Costs: None reported. Context / Sampling: Sampled atleast five canceled check payment images for signatures.