Finding 513907 (2024-001)

Material Weakness Repeat Finding
Requirement
P
Questioned Costs
-
Year
2024
Accepted
2024-12-12
Audit: 332122
Organization: Bridgeport Public Schools (NE)

AI Summary

  • Core Issue: Accounting and financial duties are not adequately separated, increasing the risk of fraud.
  • Impacted Requirements: Proper segregation of duties is essential to minimize fraud risk.
  • Recommended Follow-Up: Management should stay vigilant about potential errors or fraud and explore additional controls as needed.

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, the management and 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.

Corrective Action Plan

Recommendation: The cost of additional personnel to properly segregate accounting and financial responsibilities would appear to outweigh the benefits received. However, the management and 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. Action Taken: The District has assessed the benefits and costs associated with proper segregation of duties for the District and has determined that costs would outweigh benefits received. The District understands the inherent risks associated with improper segregation of accounting functions. Management has communicated the need for transactions to be well supported by documentation as well as seeking appropriate authorization when appropriate. The District requires monthly reporting to the Board of Education for all disbursements to ensure transactions are proper and potential errors and irregularities are identified on a timely basis. The District will continue to review accounting procedures and processes to further mitigate this internal control deficiency whenever possible and feasible.

Categories

Internal Control / Segregation of Duties

Other Findings in this Audit

  • 513908 2024-001
    Material Weakness Repeat
  • 513909 2024-001
    Material Weakness Repeat
  • 1090349 2024-001
    Material Weakness Repeat
  • 1090350 2024-001
    Material Weakness Repeat
  • 1090351 2024-001
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
10.553 School Breakfast Program $130,696
84.027 Special Education Grants to States $115,013
84.010 Title I Grants to Local Educational Agencies $106,054
84.424 Student Support and Academic Enrichment Program $104,135
84.358 Rural Education $46,746
10.555 National School Lunch Program $27,791
93.778 Medical Assistance Program $8,951
84.173 Special Education Preschool Grants $4,698
84.048 Career and Technical Education -- Basic Grants to States $3,836