Finding Text
Finding 2022-004 – Internal Control Over Disbursements (Allowable Costs/Activities)
Significant Deficiency
AL Number: 84.425 Education Stabilization Fund
Condition:
During our testing of internal controls over nonpayroll disbursements we reviewed 20 transactions, noting there was no supporting documentation for 2 transactions.
No additional documentation was present to show that approval was obtained through other means, such as by email, verbally or follow-up signature approval from the program director.
The sampling was not a statistically valid sample.
Questioned Costs: None.
Criteria:
Internal controls should be in place that provide reasonable assurance that all financial transactions are reviewed and approved before payments are made and reports generated. No one individual should handle a transaction from its inception to its completion.
Cause:
Inattention to the procedures already in place to ensure that all transactions are properly authorized by appropriate personnel signing approvals before payment is issued may have led to this finding.
Effect:
Inadequate internal controls over disbursements could adversely affect the School District’s ability to detect misstatements in amounts that would be material in relation to the financial statements in a timely period by employees in the normal course of performing their assigned functions.
Recommendation:
We recommend that the School District strengthens internal control policies and procedures over disbursements and employees indicate their review and approval for all transactions to ensure they are properly authorized. We further recommend no disbursement be processed without all necessary supporting documentation being obtained.