Finding Text
FINDING 2023-001: Lack of Segregation of Duties – Cash Receipts Criteria - Good internal control requires a segregation of duties and responsibilities such that no one employee has access to both physical assets and the related accounting records, or to all phases of a transaction. Condition - The person performing accounting functions for the Corporation occasionally has access to physical checks. Context - Management is responsible for implementing controls to ensure adequate segregation of duties. Cause - The accountant records checks in the accounting system when they are received. Occasionally, the accountant will pick up checks from the management location and therefore, has access to both physical assets and the accounting records. Effect - The lack of segregation of duties may result in undetected errors in financial statements and increases the possibility of misappropriation of the Corporation’s assets. Recommendation - We recommend the Corporation establish procedures to adequately segregate duties so no one has access to both physical assets and the related accounting records. Auditee's comments and response - The small size of the Corporation’s staff makes it difficult to adequately segregate duties in some areas. The Corporation is acquiring a check scanning machine from their bank that will allow their administrative assistant to deposit the checks electronically as soon as they arrive in the mail. Responsible party for corrective action: Lisa Fischer – Chief Operating Officer