Finding Text
Segregation of Duties - Management is responsible for establishing and maintaining internal control. A good system of internal control provides for adequate segregation of duties so no one individual handles a transaction from its inception to completion. In order to maintain proper internal control, duties should be segregated so the authorization, custody and recording of transactions are not under the control of the same employee. This segregation of duties helps prevent losses from employee error or dishonesty and maximizes the accuracy of the District's financial statements. Condition - Various duties are not segregated for each transaction so that authorization, custody and recording are each properly performed by a different employee. Cause - The District has a limited number of staff to complete these duties and procedures have not been designed to adequately segregate the duties or provide compensating controls through additional oversight of transactions and processes. Effect - The potential effect of this control weakness is that fraud or errors could occur and not be detected by management or others within the District in a reasonable period of time. Auditor's Recommendation - I realize segregation of duties is difficult with a limited number of business office employees. However, the District should continually review its procedures to obtain the maximum internal control possible under the circumstances utilizing currently available staff, including elected officials. Client Response and Corrective Action Planned - We will continue to review our procedures and implement additional controls where possible. Auditor's Conclusion - Response accepted.