Finding 395834 (2023-001)

Material Weakness
Requirement
P
Questioned Costs
-
Year
2023
Accepted
2024-05-03

AI Summary

  • Core Issue: The Program Manager handled both accounting and reconciliation tasks, violating the requirement for segregation of duties.
  • Impacted Requirements: This situation increases the risk of errors or fraud in financial reporting due to insufficient checks and balances.
  • Recommended Follow-Up: Review staffing and processes to ensure proper segregation of duties, especially during periods of turnover.

Finding Text

Programs: Child and Adult Care Program Criteria or Specific Requirement: No one employee should have access to both physical assets and related accounting records, or to multiple phases of a transaction. Condition: The Program Manager performed multiple accounting and reconciliation functions for part of the year. Cause: The Organization’s accounting department is small and staff turnover during the year inadvertently put too many accounting functions with one staff person for part of the year. Effect: The lack of segregation of duties increases the possibility that a material misstatement in the entity’s financial statements will not be prevented or detected and corrected on a timely basis. Questioned costs: There were no questioned costs.

Corrective Action Plan

During the period of April 2023 through September 2023, the turnover in staff put too many accounting functions on Program Manager I. The Organization hired additional staff and restructured accounting functions to Program manager II that eliminated the segregation of duties.

Categories

HUD Housing Programs Internal Control / Segregation of Duties

Other Findings in this Audit

  • 972276 2023-001
    Material Weakness

Programs in Audit

ALN Program Name Expenditures
10.558 Child and Adult Care Food Program $6.47M