Finding Text
Finding 2023-001 Segregation of Duties
Condition: The Corporation’s offices are not large enough to permit an adequate segregation of duties for effective internal controls. Management has not separated incompatible activities of personnel, thereby creating risks related to the safeguarding of cash and the accuracy of the financial statements.
Criteria: Proper controls over financial reporting include adequate segregation of duties.
Cause: The concentration of closely related duties and responsibilities such as the recording and processing of cash receipts, preparing grant expenditure reports, preparing financial information for posting and analyzing financial information by a small staff makes it impossible to establish an adequate system of automatic internal checks on the accuracy and reliability of the accounting records.
Effect: This deficiency results in a reasonable possibility that the Corporation would not be able to detect misstatements that would be material in relation to the financial statements and/or federal award program in a timely period by employees in the normal course of performing their assigned functions.
Recommendation: While we do recognize that the Corporation is not large enough to permit a segregation of duties for effective internal controls, we believe it is important the Corporation be aware that this condition does exist.
Repeat Finding: Yes.
Views of Responsible
Officials and Planned
Corrective Actions: Management is cognizant of this limitation and will implement additional controls where possible.