Finding 44886 (2022-001)

Significant Deficiency
Requirement
ABH
Questioned Costs
-
Year
2022
Accepted
2022-10-11

AI Summary

  • Core Issue: Critical financial duties are combined under one individual due to limited staffing, leading to a lack of segregation of duties.
  • Impacted Requirements: Proper internal controls require separate employees for different accounting functions to prevent fraud and misappropriation of assets.
  • Recommended Follow-Up: Management and the Board should enhance oversight of financial activities, despite the challenges of hiring additional staff.

Finding Text

2022-001 Segregation of Duties Condition: Due to the limited number of people working in the office, many critical duties are combined and given to the available employees. Presently, a single individual has the ability to prepare and sign checks, reconcile bank accounts, perform payroll duties and maintain the general ledger. Despite performing mitigating controls such as dual check signers, department head invoice approvals, and external review by the Board of Directors, a lack of segregation of duties exists. Criteria: A proper internal control structure requires the performance of accounting functions by separate employees or volunteers. Effect: Lack of segregation of duties increases the Organization?s exposure to misappropriation of assets and fraud. Recommendation: Management and the Board of Directors should remain involved in the financial affairs of the Organization to provide additional oversight controls. Management Response: Management agrees with the recommendation. Management and the Board of Directors will continue to be involved in the financial affairs of the Organization. The Organization does not believe it would be feasible or fiscally responsible to hire enough individuals to achieve proper segregation of duties.

Categories

Internal Control / Segregation of Duties

Other Findings in this Audit

  • 44885 2022-001
    Significant Deficiency
  • 621327 2022-001
    Significant Deficiency
  • 621328 2022-001
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
59.075 Shuttered Venue Operators Grant Program $1.94M
21.027 Coronavirus State and Local Fiscal Recovery Funds $100,000