Finding Text
2022-001 - Internal Control over Financial Reporting ? Lack of Segregation of Duties ? Significant Deficiency Condition & Criteria: The small size of the Authority?s office staff does not allow for adequate segregation of duties. Standard practice regarding the design of a good system of internal controls relies at least in part on a system of checks and balances accomplished by having different employees performing various functions within the accounting cycle. These checks and balances are not possible when the same person performs all of an interrelated series of tasks. Although the Authority does have some compensating controls in place, there are still a number of situations where one person is responsible for all aspects of a transaction. Effect: The condition could result in errors being made in the accounting records and going undetected due to the lack of ?cross-checking? and could result in the undetected misappropriation of Authority assets. Cause: The size of the Authority, and its budget, make it impractical for the Authority to hire the additional personnel needed to provide for optimum segregation of duties. Recommendation: The oversight that is provided by the close involvement of the Authority Manager and the Board of Directors is considered a compensating control. We urge the Board to continue to have the Authority Manager and the Board closely involved in all financial aspects. Views of Responsible Officials and Planned Corrective Actions: The Authority understands the potential effects of the condition described above but agrees that it would not be cost beneficial to hire additional personnel in order to provide for more adequate segregation of duties. As a compensating control, the Board intends to continue its close involvement in, and oversight over, the financial transaction process.