Finding Text
CRITERIA: The Organization is required to implement internal controls over financial reporting to ensure compliance with federal program requirements and to ensure these controls are operating as designed. CONDITION: The Organization does not have adequate segregation of duties for financial reporting purposes. CONTEXT: During dual purpose tests of controls and compliance over direct disbursements, we noted that there is no review and approval process of expense allocations, such as payroll and overhead. While a detailed review process exists for expense allocations made by subrecipients, no such review process exists for the Organization?s own expense allocations. EFFECT: This circumstance increases the opportunity for errors and misstatements to go undetected. CAUSE: This situation is created by limits on staffing and by insufficient resources to retain the number of staff necessary to obtain the optimum level of segregation and oversight. RECOMMENDATION: We recommend that management continue to look for opportunities to improve segregation among staff involved with financial reporting, and to implement processes to ensure that expense allocations are verified for accuracy. VIEWS OF RESPONSIBLE OFFICIALS: The Organization concurs with the finding. REPEAT FINDING: This finding was reported in the Schedule of Findings and Questioned Costs for the year ended June 30, 2021 as item 2021-02.