FAC Explorer

Finding 481227 (2023-001)

Significant Deficiency
Requirement
P
Questioned Costs
-
Year
2023
Accepted
2024-08-16
Audit: 317343
Organization: Douglass Community Services, Inc. (MO)
Auditor: Gray Hunter Stenn LLP

AI Summary

  • Core Issue: The Organization lacked proper segregation of duties in accounting due to a retirement and insufficient staffing.
  • Impacted Requirements: Internal controls require that no single person should manage multiple aspects of an accounting transaction, and compensating controls must be established when segregation is not possible.
  • Recommended Follow-Up: Management should enhance supervision and review of accounting processes to mitigate risks associated with the lack of segregation of duties.

Finding Text

Condition - The Organization had a lack of segregation of duties during the year ended December 31, 2023. Criteria - Internal control procedures require that accounting functions should be segregated so that one person does not control more than one aspect of an accounting transaction. And when there are duties that are not segregated, compensating controls should be in place to overcome the risks related to a lack of segregation of duties. Cause - During 2023, the Organization had an employee in the accounting department retire and was not replaced. The Organization has a limited number of staff in the accounting department to be able to keep proper segregation of duties after the employee’s retirement. Effect - After the employee’s retirement, the Organization could not maintain segregation of duties. Recommendation - When a lack of segregation of duties exists, management’s close supervision and review of accounting information are the best means of preventing or detecting errors and irregularities.

Corrective Action Plan

We acknowledge the audit finding regarding the lack of segregation of duties. To address this issue, we have developed the following corrective action plan: 1. Risk Assessment: We will conduct a risk assessment to identify all areas with Segregation of Duty conflicts. 2. Policy Implementation: Policies will be evaluated and will be established to clearly define roles and responsibilities, ensuring no single individual controls multiple aspects of critical financial transactions. 3. Duty Reassignment: We have also hired another position in the finance department with the start date of August 7, 2024. Responsibilities will be assigned amount staff to eliminate conflicts. 4. Training: Employees will receive training on the importance of Segregation of Duties and their specific roles under the new framework. 5. Monitoring: Regular internal audits and continuous monitoring will be implemented to ensure compliance with the new Segregation of Duties policies. We anticipate completing these actions by September 30, 2024. Responsible Party is Stephanie Cooper, Chief Executive Officer

Categories

Internal Control / Segregation of Duties

Other Findings in this Audit

  • 481228 2023-001
    Significant Deficiency
  • 481229 2023-001
    Significant Deficiency
  • 481230 2023-001
    Significant Deficiency
  • 481231 2023-001
    Significant Deficiency
  • 481232 2023-001
    Significant Deficiency
  • 481233 2023-001
    Significant Deficiency
  • 481234 2023-001
    Significant Deficiency
  • 481235 2023-001
    Significant Deficiency
  • 481236 2023-001
    Significant Deficiency
  • 1057669 2023-001
    Significant Deficiency
  • 1057670 2023-001
    Significant Deficiency
  • 1057671 2023-001
    Significant Deficiency
  • 1057672 2023-001
    Significant Deficiency
  • 1057673 2023-001
    Significant Deficiency
  • 1057674 2023-001
    Significant Deficiency
  • 1057675 2023-001
    Significant Deficiency
  • 1057676 2023-001
    Significant Deficiency
  • 1057677 2023-001
    Significant Deficiency
  • 1057678 2023-001
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
10.558 Child and Adult Care Food Program $217,669
94.011 Foster Grandparent Program $205,815
10.565 Commodity Supplemental Food Program $164,296
10.569 Emergency Food Assistance Program (food Commodities) $158,620
93.600 Head Start $116,853
94.002 Retired and Senior Volunteer Program $80,245
14.231 Emergency Solutions Grant Program $68,035
16.575 Crime Victim Assistance $42,701
93.575 Child Care and Development Block Grant $6,630