Finding Text
2022-001 Segregation of Duties Criteria - One important aspect of internal control is the segregation of duties among employees to prevent an individual employee from handling duties which are incompatible. Condition - We noted that cash receipts are issued and/or counted and bank deposits are prepared by the same person; an independent person does not open the mail and prepare an initial listing of the checks received and later compare the listing to the receipts issued; expenditures are processed, disbursements are recorded and checks are prepared by the same person and adjusting journal entries are recorded by one person and they are not reviewed or approved by a second person. Cause - Management has concluded that the benefits of hiring additional staff to properly segregate duties outweighs the potential benefits. Effect or Potential Effect - The potential effect of this control weakness is that fraud or errors could occur and not be detected within a reasonable period of time by District staff or management. Context - Pervasive. Identification of Repeat Finding - Yes. Auditor?s Recommendation - We realize segregation of duties is difficult with a limited number of business office employees. However, the District should review its procedures to obtain the maximum internal control possible under the circumstances utilizing currently available staff, including elected officials. District?s Response - We will continue to review our procedures and implement additional controls where possible. Auditor?s Conclusion - Response accepted.