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.
Views of Responsible Officials and Planned Corrective Action: The District understands the inherent risks associated with inadequate segregationof 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.