Finding Text
Finding #2023-001 – Lack of Segregation of Duties
Criteria: Internal controls should be in place that provide adequate segregation of duties and reduce overlapping accounting functions, especially in cash receipts and disbursements. In addition, those functions should be segregated from those overseeing overall finances.
Condition: The responsibility for the District’s bookkeeping and accounting functions is assumed by a limited number of individuals. The Business Manager enters and approves journal entries and reconciles all bank accounts.
Cause: The District has determined that hiring additional staff to perform separate accounting duties would be too costly and not an effective use of resources.
Effect: Because of the lack of segregation of duties, errors or irregularities could occur and not be detected on a timely basis.
Recommendation: The District should be aware of the need for separation of duties and provide for as much separation of duties as feasible in the circumstances.
Response: Management of the District is aware that the current number of accounting staff does not allow for full segregation of duties. Segregation of duties is enhanced whenever possible and the Board of Education and management assumes an active roll through monthly review of receipts and disbursements and monthly financial reports. The Superintendent and Business Manager are in constant communication regarding the District’s finances. The Superintendent is not involved in processing day to day financial transactions.