Finding Text
Inadequate Controls Over Related Party Transactions
Criteria: Management is responsible for implementing adequate controls to ensure proper documentation and approval of related party transactions.
Condition: Insufficient controls over related party transactions.
Cause: Lack of controls. No policies or procedures that describe the proper supporting documentation for related party transactions. No policies or procedures that describe the proper review and approval of related party transactions.
Effect: Could result in undetected errors and irregularities and misstated interim financial reports.
Questioned Costs: None noted.
Recommendation: Improve internal controls over related party transactions. Implement written procedures for related party transactions, including required documentation and approval.
Views of Responsible Officials and Planned Corrective Actions: Our 2021 findings were not reported until mid-year 2022. Management has included Butler CPA to help in accurately reporting and documenting internal and third-party transactions.