Finding Text
2023 – 002: Segregation of Duties and Control Documentation
Type of Finding:
• Material Weakness in Internal Control over Financial Reporting
Condition: The University does not have appropriate segregation of duties and review control procedures in place to provide reasonable assurance that financial records of the University are complete, accurate, and retained; therefore, the potential exists that a material misstatement of the annual financial statements could occur and not be prevented, or detected and corrected, by the University’s internal controls.
Criteria or specific requirement: Internal controls should be in place to provide reasonable assurance that financial records of the University are complete, accurate, and retained to support the University’s financial statement prepared in accordance with U.S. GAAP.
Context: While performing audit procedures, it was noted that due to staffing turnover, staffing changes, and operational challenges, management does not have appropriate segregation of duties control and review procedures in place to provide reasonable assurance that financial records of the University are complete, accurate, and retained to support the University’s financial statement prepared in accordance with U.S. GAAP
Effect: The lack of controls and review procedures in place over the financial reporting function increases the risk of misstatements, fraud, or errors occurring and not being detected and corrected.
Cause: While performing audit procedures, it was noted that due to staffing turnover, staffing changes, and operational challenges, management does not have appropriate segregation of duties and review procedures in place.
Repeat Finding: Yes – 2022-002.
Recommendation: The University should evaluate their financial reporting processes and controls, including the segregation of duties among its internal staff (including number of internal staff), to determine whether additional processes and controls over the financial records of the University are complete, accurate, and retained to support the University’s financial statement prepared in accordance with U.S. GAAP.
Views of responsible officials and planned corrective actions: There is no disagreement with the audit finding.