Finding Text
Finding Type: Material weakness in Internal Controls over Financial Reporting Criteria: Management is responsible for establishing and maintaining effective internal controls in order to safeguard the assets of the District. A key element of internal control is the segregation of incompatible duties within the accounting function. Condition/Finding: During our audit, we noted the following areas in which the District should improve segregation of duties: - The District does not have procedures in place to allow for an independent review of payroll registers when payroll disbursements are made and recorded in the accounting records. - The District currently does not have procedures in place to allow for an independent review of manual journal entries Cause: This condition appears to be the result of the District not adhering to established internal control polices and procedures. Effect: The District is exposed to increased risk that misstatements, whether caused by error or fraud, could occur and not be detected by management on a timely basis. Recommendation: The District should evaluate its processes and procedures to ensure that a sufficient segregation of incompatible duties exists. View of Responsible Officials (Corrective Action): See corrective action plan.