Finding Text
Finding: The District has insufficient segregation of duties over the disbursement process for federal programs. Criteria: A good internal control contemplates an adequate segregation of duties so that no one individual handles a transaction from inception to completion. Condition: Access to the master vendor file is not limited. One position has access to initiate, approve, enter invoices to be paid, print checks with contain the authorized signers and reconciles bank statements. The same position posts journal entries to the general ledger. The journal entry posted to the program for furniture costs was not properly documented. Cause: There has been significant turnover in the Business Office. Procedures have not been properly designed to limit access rights and responsibilities in the cash disbursement cycle. Effect: Misappropriations of assets or errors could occur and not be detected in a timely manner. Federal program costs are not allowable. Context: The deficiency is over all disbursement transactions of the District including federal awards. Identification as a repeat finding: This is not a repeat finding of the program. Recommendation: In general, authorization of new vendors, purchasing, entering invoices into the accounting system, and processing of checks and electronic funds transfers should be segregated from each other. The following are recommendations to strengthen the District?s internal control system: ? Access to edit the master vendor file should be limited to a position without access to accounts payable processing. ? Check sequence should be formally tracked by a position independent of the cash disbursement function to ensure all checks are appropriately approved and accounted. Theposition accounting for check sequence should also ensure all checks accounted for are on the bill listing provided to the Board for review each month. ? A separate position should obtain the checks printed and match all invoices to the check stubs. This individual should attach the stub to the invoice and prepare the checks for mailing. This individual should also obtain the electronic funds transfer report and compare to the invoices and to the total for the bank transfer. ? Journal entries should be prepared by one employee and be properly documented to substantiate the purpose and the amounts posted. Another employee should review the entry and approve prior to posting.