Finding Text
Segregation of Duties ? Significant Deficiency Criteria The organization is required to maintain internal controls at a level where underlying support for federal award disbursements can be developed and a determination can be made that the federal awards are getting disbursed properly in accordance with the grant requirements. Condition There is not a system in place for grant disbursement duties to be properly segregated between authorization, custody, record keeping and reconciliation. Cause The organization is subject to size and budget constraints limiting the number of personnel within the grant department. Effect The design of internal control over financial reporting could adversely affect the ability to record, process, summarize and report federal awards in accordance with grant requirements. Recommendation We recommend the organization review their internal controls over grants to determine if additional procedures can be implemented that are cost effective. The board should constantly be aware of this condition. Compensating controls that mitigate the related risks could be (or are) provided through appropriate oversight of the performance of these functions and review of grant disbursements by individuals with knowledge of current grants and grant requirements. View of responsible officials and corrective actions We agree with this finding. We will improve monitoring and implement new procedures to properly segregate accounting functions as much as possible for the small size of the Association.