Finding Text
Finding 2023-006 Segregation of Duties – Federal and State Awards
Type of Finding: Material Weakness in Internal Control Over Compliance
Other Matter
Repeat of Finding 2022-003
Federal and State Agencies: All
Assistance Listing Numbers: All
State ID Number: All
Federal and State Program Titles: All
Pass-through Agencies: All
Pass-Through Numbers: All
Award Periods: All
Compliance
Requirements: Allowable Costs/Cost Principles, Reporting
Condition: The District has one position to essentially complete or review and approve all financial and recordkeeping activities of the District.
Context: While performing audit procedures, it was noted that the District did not have adequate segregation of duties for internal control purposes during the majority of the fiscal year.
Criteria: Segregation of duties is an internal control intended to prevent or decrease the occurrence of errors or intentional fraud. Segregation of duties ensures that no single employee has control over all phases of a transaction or process.
Cause: The lack of segregation of duties is due to the limited number of employees and the size of the District’s operations. In addition, the District has not completed a formal risk assessment and review of internal controls to identify additional mitigating and compensating controls which could be implemented to reduce the risk of errors or intentional fraud.
Effect: Errors or intentional fraud could occur and not be detected in a timely manner by other employees in the normal course of their responsibilities as a result of the lack of segregation of duties.
Recommendation: We recommend that the District Board of Education continue to monitor the transactions and the financial records of the District. We recommend that the District perform a risk assessment of its operations and current procedures to identify and implement mitigating controls to reduce the risk of errors and intentional fraud.
Management Response: There is no disagreement with the audit finding.