FAC Explorer

Finding 28407 (2022-003)

Material Weakness Repeat Finding
Requirement
P
Questioned Costs
-
Year
2022
Accepted
2023-03-28
Audit: 36188
Organization: St. Francis School District (WI)
Auditor: Cliftonlarsonallen LLP

AI Summary

  • Core Issue: The District lacks proper segregation of duties, allowing one person to handle all financial activities, increasing the risk of errors or fraud.
  • Impacted Requirements: This deficiency violates compliance requirements related to allowable costs and cost principles, as it undermines internal controls.
  • Recommended Follow-Up: The District should conduct a risk assessment and implement additional controls to mitigate risks, while the Board should continue monitoring financial transactions.

Finding Text

Finding No. Control Deficiencies 2022-003 Segregation of Duties ? Federal and State Awards Type of Finding: Material Weakness In Internal Control Over Compliance Repeat of Finding 2021-003 Assistance Listing Number ? All State ID Number ? All Compliance Requirements: Allowable Costs/Cost Principles Reporting Condition: The District has one position to essentially complete or review and approve all financial and recordkeeping activities of the District. Context: While performing audit procedures, it was noted that the District did not have adequate segregation of duties for internal control purposes during the majority of the fiscal year. Criteria: Segregation of duties is an internal control intended to prevent or decrease the occurrence of errors or intentional fraud. Segregation of duties ensures that no single employee has control over all phases of a transaction or process. Cause: The lack of segregation of duties is due to the limited number of employees and the size of the District?s operations. In addition, the District has not completed a formal risk assessment and review of internal controls to identify additional mitigating and compensating controls which could be implemented to reduce the risk of errors or intentional fraud. Effect: Errors or intentional fraud could occur and not be detected in a timely manner by other employees in the normal course of their responsibilities as a result of the lack of segregation of duties. Recommendation: We recommend that the District Board of Education continue to monitor the transactions and the financial records of the District. We recommend that the District perform a risk assessment of its operations and current procedures to identify and implement mitigating controls to reduce the risk of errors and intentional fraud. Management Response: There is no disagreement with the audit finding.

Corrective Action Plan

2022-003 Federal Assistance Listing Number ? All State ID Number - All Recommendation: We recommend that the District continue to evaluate the financial, compliance, and reporting requirements specific to federal and state awards administered by the District. The District should incorporate identified opportunities to improve segregation of duties in written policies and procedures. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: The District recently realigned responsibilities within the administrative team which included the appointment of a Curriculum Director. The new alignment now allows for the Curriculum Director to provide proper oversight of Title funds, and the Pupil Services Director will provide oversight of IDEA funding. The Director of Finance will continue to collaborate with the respective directors as a fiscal contact for federal awards, but grant coordination will be delegated to the respective department heads. Name of the contact person responsible for corrective action: Deborah Kerr, District Superintendent Planned completion date for corrective action plan: On-going

Categories

Allowable Costs / Cost Principles Internal Control / Segregation of Duties Subrecipient Monitoring HUD Housing Programs Material Weakness Reporting

Other Findings in this Audit

  • 28408 2022-003
    Material Weakness Repeat
  • 28409 2022-003
    Material Weakness Repeat
  • 28410 2022-003
    Material Weakness Repeat
  • 604849 2022-003
    Material Weakness Repeat
  • 604850 2022-003
    Material Weakness Repeat
  • 604851 2022-003
    Material Weakness Repeat
  • 604852 2022-003
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
93.778 Medical Assistance Program $176,825
84.010 Title I Grants to Local Educational Agencies $141,913
10.553 School Breakfast Program $134,649
84.425 Education Stabilization Fund $79,889
10.555 National School Lunch Program $51,767
84.027 Special Education_grants to States $26,031
84.367 Improving Teacher Quality State Grants $24,343
10.559 Summer Food Service Program for Children $17,928
84.424 Student Support and Academic Enrichment Program $11,738
84.173 Special Education_preschool Grants $9,943