Finding Text
Criteria
Accounting and financial duties should be segregated to reduce the ability of individuals to both commit and conceal instances of fraud to a low level.
Condition and Context
Accounting and financial duties are not sufficiently segregated to reduce the risk of fraud to an acceptable low level.
Questioned Costs
None
Cause
The District has a limited number of personnel involved in the accounting functions.
Potential Effect
Improper segregation of duties could cause misstatements caused by error or fraud to occur and not be detected.
Recommendation
The cost of additional personnel to properly segregate accounting and financial responsibilities would appear to outweigh the benefits received. However, management and the Board of Education should constantly be aware of the possibility that errors or fraud could occur and continue current practices mitigating these possibilities and examine and implement other mitigating controls when appropriate.
Views of Responsible Officials and Planned Corrective Action
The District understands the inherent risks associated with inadequate segregation of accounting functions. The District requires monthly reporting to the Board of Education and the District superintendent to ensure transactions are recorded, and potential errors and irregularities are identified on a timely basis. The District has implemented procedures to limit the existence of, and mitigate risks associated with, nonsegregated accounting functions. The District has assessed the benefits and costs associated with additional requirements necessary to ensure proper segregation of duties and has determined that cost would outweigh any benefits received.