Finding Text
U.S. Department of Agriculture Natural Resources Conservation Service Soil and Water Conservation Program CFDA 10.902 2020-01: Segregation of Duties Criteria: The assignment of responsibilities should be segregated so that one person is not responsible for the authorization and recording of a transaction and the custody of the related asset. There needs to be a reconciliation or control activity to provide reasonable assurance that transactions are handled appropriately. Condition: Key duties and functions are not segregated among Association personnel. This is especially a concern in the cash management, account receivable, accounts payable, payroll, and journal entry functions. Effect: Transactions could be mishandled, due to errors or fraud, that could lead to loss of assets or the reporting of misleading financial information. Cause: There are a limited number of personnel for certain functions and lack of board oversight. Identification of a repeat finding: This is a repeat finding from the immediate previous audit. Recommendation: We recommend that duties be segregated as best as possible with the people available. The Board should oversee these areas as much as possible. Monthly financial activity such as journal entries, detail of significant asset and liability balances, bank statements, canceled check images, and reconciliations should be reviewed by the Treasurer for reasonableness. Views of responsible officials and planned corrective actions: The Association agrees with this finding and will adhere to the corrective action plan on page 30 in this audit report.