Finding 498243 (2023-001)

Significant Deficiency Repeat Finding
Requirement
P
Questioned Costs
-
Year
2023
Accepted
2024-09-25
Audit: 320984
Auditor: Sterle & CO LTD

AI Summary

  • Core Issue: There is a significant lack of segregation of duties in financial processes, increasing the risk of errors or misappropriations.
  • Impacted Requirements: Effective control systems require a clear division of accounting duties to prevent undetected issues.
  • Recommended Follow-Up: The governing board should enhance oversight, and management must ensure proper supervision of accounting functions like accounts payable and reconciliations.

Finding Text

Lack of segregation of duties - Significant deficency Condition: Lack of segregation of duties over financial processes. Criteria: For an effective control system, division of accounting duties should exist to prevent errors or misappropirations from going undetected in the course of employees performing their assigned duties. Context: The lack of segregation of duties exists within the Center as a whole over its accounting and reporting functions. This is a common circumstance in nornprofit organizations of a similar size. Effect: Errors or misappropriations could occur and go undetected for a period of time. Questioned Costs: Not applicable Cause: Limited number of staff available to appropriately divde duties. Recommendation: The Center's governing board should be cognizant of the issue and provide appropirate oversight. Management should provide reasonable oversight to accounting functions including accounts payble disbursements, reconciliations, and reporting including journal entry preparation. Views of Responsible Officials and Corrective Actions: The Center agress with the recommendations.

Corrective Action Plan

Lack of segregation of duties. Recommendation: The Center's governing board should be cognizant of the issue and provide appropriate oversight. Management should provide reasonable oversight to accounting functions including accounts payable disbursements, reconciliations, and reporting including journal entry preparation. Action taken: The Center agrees with recommendations. The Center recongizes this deficiency due to the size of the financial department and limted resources to adequately divide duties or hire enough additional staff to completely segregate duties. The Center hired an account payable staff to the team in December 2021 to assist with work load and help create better division of duties. The Center also hired a part-time employee in August 2023 to assist with financial preparation. In May 2024 Northland hired an additional part-time employee to assist with billing data analysis. This is an ongoing process.

Categories

Internal Control / Segregation of Duties Reporting

Other Findings in this Audit

  • 1074685 2023-001
    Significant Deficiency Repeat

Programs in Audit

ALN Program Name Expenditures
93.696 Certified Community Behavioral Health Clinic Expansion Grants $1.05M