Finding Text
2023-001: Segregation of Duties and Information Systems Access
Condition: The size of the Hospital’s office staff precludes a proper segregation of functions to ensure
adequate internal control. The basic premise is that no one employee should have access
to both physical assets and the related accounting records or to all phases of a transaction.
This is not unusual in entities this size, but the Board of Directors should continue to be
aware of this condition and to realize the concentration of duties and responsibilities in a
limited number of individuals is not desirable for an effective system of internal control.
Under those conditions, the most effective controls lie in the Board of Directors'
knowledge of matters relating to Hospital operations; however, a significant deficiency
exists in the Hospital’s internal controls. This is a repeat finding from 2022-001.
Criteria: The lack of proper segregation of duties is considered an internal control weakness.
Effect: As a result of not having a sufficient number of individuals in the accounting and business
office department to segregate duties, the Hospital has an internal control weakness.
Recommendation: We recommend that management and those charged with governance continue to
evaluate whether to accept the degree of risk associated with this condition because of
cost or other considerations.
Corrective Action
Plan: The Hospital does not have the resources available to increase staff size and address this
internal control deficiency; however, in the past year several positions have turned over
and this has created an opportunity to review assignments of work and job duties while
trying to maintain relatively the same size staff in the future. The Board of Directors and
management are aware of the incompatible duties and will continue to provide oversight
and monitor the Hospital's operations, as well as review recommendations from the Chief
Financial Officer of the Hospital on proposed changes in job assignments for potential
future segregation of duties concerns.