Finding Text
Criteria - Internal controls require the Organization to define authorization level and responsibilities for credit card usage in order to prevent unauthorized use.
Condition - Employees have been noted using credit cards assigned to other employees with no supporting documentation to verify the identity of the user or purpose of the transaction leading to a heightened risk of fraudulent activity or misappropriation of funds.
Cause - Resulted from a lack of internal controls over financial reporting.
Effect - The Organization is not following proper internal control procedures.
Questioned Costs - None identified.
Recommendation - We recommend that the Organization further develops its internal control policies to establish a formal approval and review process for credit card transactions that establishes the purpose and approval for the purchase.
Management’s Response - (a) Comments on the finding and recommendation: Refugee & Immigrant Self-Empowerment, Inc. acknowledges the need for documenting credit card usage.
(b) Actions Taken: Refugee & Immigrant Self-Empowerment, Inc. will establish a clear process requiring verification of identity and purpose for each transaction. We will implement strict controls, such as mandatory receipts, detailed transaction logs, and periodic audits. Additionally, we will provide comprehensive training to all employees on the proper use and accountability of credit cards, emphasizing the importance of adherence to established protocols. We will regularly review and update these procedures to adapt to evolving risks and maintain effective internal controls.
(c) Anticipated Completion Date: August 31, 2024