Finding 375423 (2023-001)

Material Weakness Repeat Finding
Requirement
ABEGLN
Questioned Costs
-
Year
2023
Accepted
2024-03-11

AI Summary

  • Core Issue: The District's offices lack sufficient space to separate duties, increasing risks for cash handling and financial accuracy.
  • Impacted Requirements: Effective internal controls require that no single employee manages a transaction from start to finish, which is currently not feasible.
  • Recommended Follow-Up: Management should assess current procedures to enhance internal controls, acknowledging the limitations due to staff size.

Finding Text

Condition: The District’s offices are not large enough to permit an adequate segregation of duties for effective internal controls. Management has not separated incompatible activities of personnel, thereby creating risks related to the safeguarding of cash and the accuracy of the financial statements. Criteria: Management is responsible for establishing and maintaining internal control. A good system of internal control provides for adequate segregation of duties so no one individual handles a transaction from its inception to completion. In order to maintain proper internal control, duties should be segregated so the authorization, custody and recording of transactions are not under the control of the same employee. This segregation of duties helps prevent losses from employee error or dishonesty and maximizes the accuracy of the District’s financial statements. Cause: The concentration of closely related duties and responsibilities such as the recording and processing of cash receipts, preparing grant expenditure reports, preparing financial information for posting and analyzing financial information by a small staff makes it impossible to establish an adequate system of automatic internal checks on the accuracy and reliability of the accounting records. Effect: This deficiency results in a reasonable possibility that the District would not be able to detect misstatements that would be material in relation to the financial statements and/or federal award programs in a timely period by employees in the normal course of performing their assigned functions. Recommendation: The District should review the operating procedures of the District offices to obtain the maximum internal control possible under the circumstances utilizing currently available staff. While we do recognize that the District is not large enough to permit a segregation of duties for effective internal controls, we believe it is important the Board be aware that this condition does exist. Repeat Finding: Yes. Views of Responsible Officials and Planned Corrective Actions: Management is cognizant of this limitation and will implement additional procedures where possible.

Corrective Action Plan

CORRECTIVE ACTION PLAN February 8, 2024 To: U.S. Department of Education North Fayette Valley Community School District respectfully submits the following corrective action plan for the year ended June 30, 2023. Name and address of independent public accounting firm: Hacker, Nelson & Co., CPAs 123 W. Water Street Decorah, IA 52101 Audit period: Year ended June 30, 2023. The findings from the June 30, 2023 schedule of findings and questioned costs is discussed below. The findings are numbered consistently with the numbers assigned in the schedule. FINDINGS - FEDERAL AWARDS PROGRAM AUDIT U.S. Department of Education: 2023: Education Stabilization Fund (ESF): Federal Assistance Listing Number 84.425B: Discretionary Grants: Rethink K-12 Education Models (ARP) Federal Assistance Listing Number 84.425C: COVID-19 Governor’s Emergency Education Relief Fund (GEER II) Federal Assistance Listing Number 84.425U: American Rescue Plan - Elementary and Secondary School Emergency Relief (ARP ESSER III) Federal Assistance Listing Number 84.010: Title I Grants to Local Education Agencies Page 2 FINDINGS - FEDERAL AWARDS PROGRAM AUDIT (Continued) Material Weakness: See Finding 2023-001 Recommendation: The District should review the operating procedures of the District offices to obtain the maximum internal control possible under the circumstances utilizing currently available staff. While we do recognize that the District is not large enough to permit a segregation of duties for effective internal controls, we believe it is important the Board be aware that this condition does exist. Action Taken: Management is cognizant of this limitation and will implement additional procedures where possible. Anticipated Date of Completion: June 30, 2024 Material Weakness: See Finding 2023-002 Recommendation: The District should ensure bank reconciliations are being prepared and compared to the general ledger balance each month to investigate and resolve any variances in a timely manner. Action Taken: In the future, we will perform bank reconciliations and compare to the general ledger each month. Anticipated Date of Completion: June 30, 2024 If the U.S. Department of Education has questions regarding this plan, please call Kassie Stansbery, Business Manager/Treasurer, at 563-422-3851. Sincerely yours, Kassie Stansbery North Fayette Valley Community School District Business Manager/Treasurer cc: Neil W. Schraeder, CPA

Categories

Internal Control / Segregation of Duties

Other Findings in this Audit

  • 375424 2023-002
    Material Weakness Repeat
  • 375425 2023-001
    Material Weakness Repeat
  • 375426 2023-002
    Material Weakness Repeat
  • 375427 2023-001
    Material Weakness Repeat
  • 375428 2023-002
    Material Weakness Repeat
  • 375429 2023-001
    Material Weakness Repeat
  • 375430 2023-002
    Material Weakness Repeat
  • 951865 2023-001
    Material Weakness Repeat
  • 951866 2023-002
    Material Weakness Repeat
  • 951867 2023-001
    Material Weakness Repeat
  • 951868 2023-002
    Material Weakness Repeat
  • 951869 2023-001
    Material Weakness Repeat
  • 951870 2023-002
    Material Weakness Repeat
  • 951871 2023-001
    Material Weakness Repeat
  • 951872 2023-002
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
10.555 National School Lunch Program $472,289
84.425 Education Stabilization Fund $400,617
84.010 Title I Grants to Local Educational Agencies $188,039
10.553 School Breakfast Program $66,036
84.287 Twenty-First Century Community Learning Centers $50,000
84.027 Special Education_grants to States $49,115
84.367 Improving Teacher Quality State Grants $38,184
84.424 Student Support and Academic Enrichment Program $12,510
84.048 Career and Technical Education -- Basic Grants to States $12,154