Finding Text
2022-001: Lack of Segregation of Duties Statement of Condition: There were conflicting duties related to most areas in the accounting department that did not provide an adequate segregation of duties, which is essential and an integral part of any internal control system. Criteria and Cause: A proper segregation of duties is designed to prevent one person from being in a position to initiate, authorize, execute, and record the same transaction. Our consideration of the Organization?s internal control system in the accounting department disclosed that, primarily due to the limited number of personnel in that department, an adequate segregation of duties was not in place and functioning. Effect: The lack of adequate segregation of duties over the financial reporting system increases the risk that errors or fraud may occur and not be detected in a timely manner. Recommendation: We recommend that consideration be given to employing additional staff in the accounting department, as needed, and reassigning conflicting duties to the extent possible so that no individual is in a position to initiate, authorize, execute and record the same transaction.