Finding 42768 (2022-001)

Material Weakness Repeat Finding
Requirement
P
Questioned Costs
-
Year
2022
Accepted
2022-11-28
Audit: 38203
Organization: Bridgeport Public Schools (NE)

AI Summary

  • Core Issue: Accounting and financial duties are not properly segregated, increasing the risk of fraud.
  • Impacted Requirements: Lack of segregation fails to meet standards for reducing fraud risk.
  • Recommended Follow-Up: Management should remain vigilant about potential errors or fraud and explore additional controls to mitigate risks.

Finding Text

2022-001 SEGREGATION OF ACCOUNTING FUNCTIONS Criteria Accounting and financial duties should be segregated to reduce the ability of individuals to both commit and conceal instances of fraud to a low level. Condition and Context Accounting and financial duties are not sufficiently segregated to reduce the risk of fraud to an acceptable low level. Questioned Costs None Cause The District has a limited number of personnel involved in the accounting functions. Potential Effect Improper segregation of duties could cause misstatements, caused by error or fraud to occur and not be detected. Recommendation The cost of additional personnel to properly segregate accounting and financial responsibilities would appear to outweigh the benefits received. However, the management and Board of Education should constantly be aware of the possibility that errors, or fraud could occur, and continue current practices mitigating these possibilities and examine and implement other mitigating controls when appropriate. Identification of major programs: Child Nutrition Cluster 10.555, 10.559 Education Stabilization Fund (ESF)ARP Act ESSERS III 84.425

Corrective Action Plan

Recommendation The cost of additional personnel to properly segregate accounting and financial responsibilities would appear to outweigh the benefits received. However, the management and Board of Education should constantly be aware of the possibility that errors, or fraud could occur, and continue current practices mitigating these possibilities and examine and implement other mitigating controls when appropriate. Action Taken The District has assessed the benefits and costs associated with proper segregation of duties for the District and has determined that costs would outweigh benefits received. The District understands the Inherent risks associated with improper segregation of accounting functions. Management has communicated the need for transactions to be well supported by documentation as well as seeking appropriate authorization when appropriate. The District requires monthly reporting to the Board of Education for all disbursements to ensure transactions are proper and potential errors and irregularities are identified on a timely basis. The District will continue to review accounting procedures and processes to further mitigate this internal control deficiency whenever possible and feasible.

Categories

School Nutrition Programs Internal Control / Segregation of Duties

Other Findings in this Audit

  • 42769 2022-001
    Material Weakness Repeat
  • 42770 2022-001
    Material Weakness Repeat
  • 42771 2022-001
    Material Weakness Repeat
  • 619210 2022-001
    Material Weakness Repeat
  • 619211 2022-001
    Material Weakness Repeat
  • 619212 2022-001
    Material Weakness Repeat
  • 619213 2022-001
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
84.425 Education Stabilization Fund $408,698
10.559 Summer Food Service Program for Children $164,488
84.027 Special Education_grants to States $142,238
84.010 Title I Grants to Local Educational Agencies $91,272
93.778 Medical Assistance Program $45,563
32.009 Emergency Connectivity Fund Program $45,497
84.424 Student Support and Academic Enrichment Program $23,338
10.555 National School Lunch Program $1,753