Finding Text
Finding No.: 2024-003
Criteria
In order for an Organization’s system of internal controls to function properly, it is essential that there be clear definitions of job responsibilities. Assignment of responsibilities should include the appropriate segregation of duties in order to ensure proper control. Also, personnel within the Organization should be cross-trained to ensure that in the event an employee leaves the Organization, there would be another employee prepared to take on the responsibilities. Such responsibilities should be formally documented in a policies and procedures manual.
Conditions Found
During audit procedures, it was noted that the Organization had trouble producing internal control procedure documents that had been updated for the period under audit. The Organization also relies heavily on a third party to produce quarterly and annual reporting.
Cause
The Organization lacks updated and proper documentation around policies and procedures and lacks formal review of third party information.
Effect
The SEFA and financial statements could be inaccurately presented. Recommendation
We recommend a document be maintained and regularly updated to reflect the current procedures, policies, roles and responsibilities in place. In addition, there should be formal documented review and approval by someone in the Organization of the work produced by the third party to ensure any errors or omissions in financial information are caught.
Views of Responsible Officials
Management agrees with this recommendation and will implement a review and approval process effective for the fiscal 2025 reporting period.