Finding Text
Material Weakness ? Lack of Segregation of Duties Criteria: Ideally the internal controls over financial reporting would allow for an adequate segregation of duties among employees. Condition: The District?s limited number of office staff precludes a proper segregation of functions to assure adequate internal control over the cash receipts cycle. Cause: The District does not have enough office employees to adequately segregate duties. Effect: This results in a greater chance for material misstatements to the financial statements that would go undetected, since there are not sufficient mitigating controls in place to catch these errors. Recommendation: This is not unusual in districts of your size, but the Board and management should continue to be aware of this condition and realize that the concentration of duties and responsibilities in a limited number of individuals is not desirable from a control point of view.