Core Issue: There is a material weakness in internal controls due to a lack of proper segregation of duties in the accounting system.
Impacted Requirements: This weakness may prevent timely identification of problems or irregularities, increasing the risk of errors or fraud.
Recommended Follow-Up: Establish procedures to segregate duties in financial processes and enhance Board oversight to strengthen internal controls.
Finding Text
Material Weakness in Internal Control 2022-001 Criteria Internal controls should be in place to insure that employees do not have incompatible duties. Condition Proper segregation of duties does not exist in the accounting system. Effect Management may not become aware of problems or irregularities within a timely manner. Cause The Organization is unable to hire additional personnel due to its size. Recommendation Procedures should be established and implemented where the Organization segregates duties in the receipts and expenditures cycles and implements additional controls over the accounting and recording functions. Involvement by the Board of Directors can help mitigate the risk of error or fraud. The Board of Directors should remain involved in the financial affairs of the Organization with oversight and independent review of internal control functions. Views of responsible officials and planned corrective actions We agree the size of the Organization prohibits hiring additional personnel. Duties have been segregated where possible. The Board of Directors is involved where possible.
Corrective Action Plan
FINDINGS-FINANCIAL STATEMENT AUDIT MATERIAL WEAKNESS 2022-001 Segregation of duties- Procedures should be established and implemented where the Organization segregates duties in the receipts and expenditures cycles and implements additional controls over the accounting and recording functions. Involvement by the Board of Directors can help mitigate the risk of error or fraud. The Board of Directors should remain involved in the financial affairs of the Organization with oversight and independent review of internal control functions. Action Taken: We agree the size of the Organization prohibits hiring additional personnel. Duties have been segregated where possible. The Board of Directors is involved where possible.
Categories
Internal Control / Segregation of DutiesMaterial Weakness