Core Issue: There's a lack of segregation in accounting duties, allowing individuals access to both physical assets and accounting records.
Impacted Requirements: Proper segregation of duties is necessary to ensure transactions are handled correctly and to prevent mishandling.
Recommended Follow-Up: Increase duty segregation where possible and ensure the Board of Directors is actively involved in financial oversight.
Finding Text
SIGNIFICANT DEFICIENCY 2022-001. CONDITION: THERE IS A LACK OF SEGREGATION OF ACCOUNTING DUTIES THAT ENABLES THE SAME INDIVIDUALS TO HAVE ACCESS TO BOTH PHYSICAL ASSETS AND THE RELATED ACCOUNTING RECORDS OR TO ALL PHASES OF A TRANSACTION. EFFECT: TRANSACTIONS COULD BE MISHANDLED. CRITERIA: DUTIES SHOULD BE SEGREGATED TO PROVIDE REASONABLE ASSURANCE THAT TRANSACTIONS ARE BEING HANDLED APPROPRIATELY. CAUSE: THERE ARE A LIMITED NUMBER OF PERSONNEL FOR CERTAIN FUNCTIONS. IDENTIFICATION OF A REPORT FINDING: THIS IS A REPEAT FINDING. RECOMMENDATION: DUTIES SHOULD BE SEGREGATED TO THE EXTEND POSSIBLE. THE BOARD OF DIRECTORS MUST REMAIN INVOLVED IN THE FINANCIAL AFFAIRS OF THE COMPANY TO PROVIDE OVERSIGHT AND INDEPENDEDNT REVIEW FUNCTIONS.
Categories
HUD Housing ProgramsSignificant DeficiencyInternal Control / Segregation of Duties