Finding Text
Material Weakness Management override of controls. Criteria An effective system of internal accounting control necessitates the ability to detect and prevent management override of the control environment. Condition The former general manager was able to circumvent the Authority's procurement process and enter into contacts without proper approval. Subsequent to June 30, 2022, the Authority expended $26,850 related to the project that did not go through the proper procurement procedures. Cause Due to the size of the finance group, we found some controls were not being effectively maintained to detect and prevent management override of the control environment. Effect The internal control system is more susceptible to errors and other irregularities, either intentional or unintentional, not being discovered. Recommendation Management should follow all procurement procedures as outlined in the Authority's policy documents. A final cross check of proper approvals should be done by someone that does not have access to any of the processes involved in generating the source documents. Management's Response and Corrective Action See attached response.