Finding Text
Inadequate segregation of duties within a signfiicant account or process - significant deficiency. Condition: Due to the limited number of District staff, appropriate segreation of duties is not feasible for all accounting and reporting functions Specific examples include: (a) the District places the authority over the year end finanical reporting process, including all controls over procedures used to enter transaction totals into the general ledger; initiate, authorize, record, and process journal entries into the general ledger: and record recurring and nonrecurring adjustments to the financial statements with one individual (the business manager). (b) the District has several departments that are responsible for the collection of fees charged to students and the general public. The departments are responsible for the colletion, processing, and reporting to the business office. In most instances, one individual in each department performs these duties. Criteria: Internal controls should be in place to provided adequate segregation of duties to provide reasonable assurance of compliance with District financial accounting contols and policies. Cause: Generally the lack of segregation is due to the limited funding avaiable to add additional staff to appropriately divide related duties. Effect: The lack of segreation of duties creates a control deficiency because the design and operation of the control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect misttatements on a timely basis creating a more than remote likelihood that a misstatement in the District's financial statemetns that is more than inconsequential will not be prvented or detected by the District's internal control. Context: The lack of segregation of duties exists within the district as a whole over all of its accounting and reporting functions. This is a common circumstance in districts of similar size. Recommendation: The District's management nees to be cognizant of this situation which may include re-assigning duties, adding additional reconciling features, or providing appropriate oversight responsibility. Views of Responsible Officials and Planned Corrective Actions: The District is aware of the situation and will monitor as it deems appropriate. Monitoring will include educating program managers to provide addtional oversight for the interim and year end reporting. Repeat Finding - Yes - prior year finding noted as 2022-001