Finding 597598 (2022-001)

Significant Deficiency Repeat Finding
Requirement
ABJL
Questioned Costs
-
Year
2022
Accepted
2023-09-10

AI Summary

  • Core Issue: Inadequate segregation of duties increases risks for cash safeguarding and financial statement accuracy.
  • Impacted Requirements: Proper internal controls require effective separation of incompatible tasks, which is currently not feasible due to staff limitations.
  • Recommended Follow-Up: Management should acknowledge this limitation and explore implementing additional controls to mitigate risks.

Finding Text

Finding 2022-001 Segregation of Duties Condition: The Corporation?s offices are not large enough to permit an adequate segregation of duties for effective internal controls. Management has not separated incompatible activities of personnel, thereby creating risks related to the safeguarding of cash and the accuracy of the financial statements. Criteria: Proper controls over financial reporting include adequate segregation of duties. Cause: The concentration of closely related duties and responsibilities such as the recording and processing of cash receipts, preparing grant expenditure reports, preparing financial information for posting and analyzing financial information by a small staff makes it impossible to establish an adequate system of automatic internal checks on the accuracy and reliability of the accounting records. Effect: This deficiency results in a reasonable possibility that the Corporation would not be able to detect misstatements that would be material in relation to the financial statements and/or federal award program in a timely period by employees in the normal course of performing their assigned functions. Recommendation: While we do recognize that the Corporation is not large enough to permit a segregation of duties for effective internal controls, we believe it is important the Corporation be aware that this condition does exist. Repeat Finding: Yes. Views of Responsible Officials and Planned Corrective Actions: Management is cognizant of this limitation and will implement additional controls where possible.

Categories

Internal Control / Segregation of Duties Reporting

Other Findings in this Audit

  • 21152 2022-001
    Significant Deficiency Repeat
  • 21153 2022-002
    Significant Deficiency Repeat
  • 21154 2022-003
    - Repeat
  • 21155 2022-004
    - Repeat
  • 21156 2022-001
    Significant Deficiency Repeat
  • 21157 2022-002
    Significant Deficiency Repeat
  • 21158 2022-003
    - Repeat
  • 21159 2022-004
    - Repeat
  • 597594 2022-001
    Significant Deficiency Repeat
  • 597595 2022-002
    Significant Deficiency Repeat
  • 597596 2022-003
    - Repeat
  • 597597 2022-004
    - Repeat
  • 597599 2022-002
    Significant Deficiency Repeat
  • 597600 2022-003
    - Repeat
  • 597601 2022-004
    - Repeat

Programs in Audit

ALN Program Name Expenditures
10.415 Rural Rental Housing Loans $1.69M
10.427 Rural Rental Assistance Payments $175,960