Finding Text
2022-001. The Church does not maintain dual control over certain funds and the duties of certain employees are incompatible. Repeat Finding: This finding was a component of number 2021-001 in the prior year Schedule of Findings and Questions Costs ? Federal Programs. Condition: 1) The storage of funds in the safes located in the accounts receivable office at the South Barrington campus are not under dual control (we noted that multiple individuals have individual access to the safes). These safes hold unprocessed funds received in the mail and other funds received during the week. 2) The accounts receivable manager, accounts receivable specialist, and the donations coordinator at the South Barrington campus are responsible for handling incoming cash receipts, can individually access funds stored in the safes in the accounts receivable office, and are responsible for modifying donor records. Criteria: 1) A sound system of internal control requires that incoming funds be processed and maintained under dual control at all times until the funds are fully processed and an independent record is made to document the amount and nature of the funds received. 2) A sound system of internal control requires that persons who have custody or control of assets ? particularly financial assets ? should not also have accounting or reporting responsibilities with respect to those assets. Cause: 1) The safes located in the accounts receivable office at the South Barrington campus are not dual control devices. 2) The duties of the accounts receivable manager, accounts receivable specialist, and the donations coordinator at the South Barrington campus include both cash custody and accounting responsibilities. Effect: 1) A lack of dual control in circumstances where it is warranted creates an environment in which there is a greater risk that misappropriation, embezzlement, or fraud could occur and not be detected in a timely manner. 2) An internal control environment in which a person has both custody/control and accounting/reporting duties with respect to financial assets is conducive to the possibility that misappropriation (including theft or embezzlement) could occur and not be detected in a timely manner. Recommendation: 1) We recommend that the Church take additional steps to implement appropriate dual control procedures, such as by modifying the safes located in the accounts receivable office at the South Barrington campus to require two individuals to access their contents. It is our understanding that subsequent to December 31, 2022, the Church began utilizing a dual control safe to hold mail and other funds received during the week at the South Barrington campus. 2) We recommend the Church take steps to address the incompatibility of the duties assigned to the accounts receivable manager, the accounts receivable specialist, and the donations coordinator at the South Barrington campus in order to reduce the risk of undetected misappropriation. Views of Responsible Officials and Planned Corrective Action: Installation of the safe is complete and is fully functional. It is our understanding that the accompanying processes have been found to be acceptable but will be further reviewed during the 2023 audit.