Finding Text
Uniform Guidance 2 CFR 200.303 states that non-federal entities must establish and maintain effective internal control over the federal award, stating that, "internal controls should be in compliance with guidance in "Standards for Internal Control in the Federal Government" issued by the Comptroller General of the United States or the "Internal Control Integrated Framework", issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).". The accounting department consists of one (1) individual responsible for all accounting functions, including writing and signing checks. Checks signed by the accountant are then mailed for payment without review and approval by another party. This lack of segregation creates a risk that unauthorized transactions could be approved and processed without appropriate oversight. Additionally, there is an increased potential for undetected errors or fraudulent activities. The current organizational structure and limited staffing resources have led to overlapping responsibilities, where duties are not adequately separated due to practical constraints. The absence of proper segregation of duties increases the risk of misappropriation of assets, inaccurate financial reporting, and potential non-compliance with applicable regulations and internal policies. The effectiveness of internal controls is compromised, potentially undermining the reliability of financial statements and safeguarding of assets.