Finding Text
2022-001 Condition: The Organization?s financial structure lacks appropriate segregation of financial duties. Adequate segregation of financial duties is not present among purchasing, receipting, and approval of financial transactions. Criteria: ? 200.303(a) requires non-federal entities to establish and maintain effective internal control over the federal awards that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Segregation of employees? duties is a common practice in an effective internal control structure. Segregation of duties is when specific employee functions related to important accounting areas (such as cash receipting and cash disbursements) are separated among different individuals to significantly reduce the risk that any one individual could intentionally or unintentionally misappropriate assets.Effect: Failure to implement and maintain adequate segregation of duties exposes the Organization to greater risk of noncompliance with federal awards requirements. Cause: The Chief Executive Officer initiates and approves all financial transactions without any oversight from the board of directors. Recommendation: We recommend that the Organization implement an internal control policy to review and approve the Chief Executive Officer?s financial activity. The individual assigned to review and approve the Executive Director?s transactions should possess the financial acumen to review and approve financial transactions and identify any issues or concerns. Management Response: Management concurs with this finding. Management will immediately implement procedures to segregate financial duties to the extent possible with available resources.