Finding 28706 (2022-002)

Material Weakness
Requirement
ABEILN
Questioned Costs
-
Year
2022
Accepted
2023-08-08

AI Summary

  • Core Issue: One employee has too much control over critical financial areas, increasing the risk of errors or fraud.
  • Impacted Requirements: Segregation of duties is not being properly implemented, which is essential for internal controls.
  • Recommended Follow-Up: Review and adjust responsibilities to ensure no single employee manages incompatible duties.

Finding Text

One important aspect of the internal control structure is the segregation of duties among employees to prevent an individual employee from handling duties which are incompatible. We noted one individual has control over portions of one or more of the following areas for the District relating to federal programs; cash, investments, receipts, capital assets, wire transfers, computer systems, school lunch program and journal entries. See finding 2022-001.

Corrective Action Plan

The District has a limited amount of resources although our employees have separate responsibilities as listed below: 1) Cash: We have three secretaries who initiate cash receipts. The SBO reconciles and posts any cash receipts. Disbursement transactions are created with a PO system, approved by the Supervisor, Principals, Superintendent or the Board of Education. 2) Investments: Any deposits into the ISJIT lunch accounts are recorded by the Secretaries into the student?s JMC account. Any transfers between accounts including savings, checking and ISJIT are initiated the SBO and approved by the Superintendent. 3) Receipts: Any deposits are prepared and reconciled to the deposit slip and accounting software by the secretaries before taken to the bank. Any State deposits made directly to the bank accounts are posted by the SBO. Once deposits are reconciled by the secretaries, the SBO reconciles the bank deposit to the bank statement and posts the transactions. 4) Capital Assets: Capital Assets are approved by the Board of Education initially, then purchased through the PO process and paid through the accounting software. Reconciling of Assets are reconciled the SBO. 5) Wire Transfers: Wire transfers are initiated by creating a payable check to a vendor, and then the Superintendent approves the wire transfer. 6) Computer Systems: The District utilizes one accounting system, Software Unlimited. This system controls all data input and output for the General Ledger, Payroll, Accounts Payable and Fixed Assets. 7) School lunch program: We have three secretaries receive payments, process and reconcile lunch receipts for the lunch program. These receipts are posted by the SBO. The lunch secretary prepares the State reimbursement for student lunches and the SBO posts the State payments. 8) Journal Entries: Journal entries are prepared and posted by the SBO. In the future, the Superintendent or one of Board members may approve for audit purposes.

Categories

Internal Control / Segregation of Duties

Other Findings in this Audit

  • 28707 2022-002
    Material Weakness
  • 605148 2022-002
    Material Weakness
  • 605149 2022-002
    Material Weakness

Programs in Audit

ALN Program Name Expenditures
10.555 National School Lunch Program $292,310
84.425 Education Stabilization Fund $187,293
84.010 Title I Grants to Local Educational Agencies $68,387
84.358 Rural Education $56,888
10.553 School Breakfast Program $49,732
32.009 Emergency Connectivity Fund Program $39,215
84.424 Student Support and Academic Enrichment Program $10,000
84.367 Improving Teacher Quality State Grants $9,687
97.036 Disaster Grants - Public Assistance (presidentially Declared Disasters) $5,524
84.048 Career and Technical Education -- Basic Grants to States $3,941
84.027 Special Education_grants to States $3,420
10.649 Pandemic Ebt Administrative Costs $614