Finding Text
2023-002 Allowable Costs: Segregation of Duties over Financial Reporting Process.
Federal Program Information: Activities to Support State, Tribal, Local and Territorial Health
Department Response to Public Health or Healthcare Crises (Assistance Listing #93.391)
Condition and Criteria: During the course of the audit, we noted lack of segregation of duties
as it relates to cash receipts, cash disbursements, and cash reconciliation. There should be
segregation of duties over the physical access to assets and the ability to record and track those
assets in the accounting system.
Prior Year Audit Finding: n/a
Cause and Effect: Lack of segregation of duties has resulted due to the limited personnel and
several employee transitions during the year. This increases the Organization’s risk of
misappropriation of assets and could result in intentional fraud or unintentional errors that
could occur and go undetected.
Recommendation: We recommend the Organization review all financial internal control
policies and procedures to ensure proper segregation of duties and minimize the Organization’s
risk to misappropriation of assets. This will help mitigate the risk of misappropriation of assets
and fraudulent reporting as it relates to lack of segregation of duties.
Management’s Response: Management understands the importance of segregating financial
and accounting duties in order to reduce the risk of fraud and error. Accordingly, as of fiscal
year 2024, management has hired a new Chief Financial Officer (“CFO”) and Finance Director.
The Interim CFO has continued to work with the new CFO to prevent separation of duties
issues wherever possible. Additionally, management plans to review the internal control
policies and procedures and make changes as considered necessary.
Prior year audit finding: n/a
Context: This represents a systemic problem.
Questioned Costs: None.