Finding Text
Criteria – A good system of internal controls contemplates an adequate segregation of duties so that no one individual handles a transaction from its inception to completion.
Condition – The limited number of staff of Listening House does not facilitate the segregation of duties necessary to achieve a low level.
Cause – Listening House’s size and budget constraints limit the number of personnel and does not allow.
Effect – A material misstatement of the consolidated financial statements occurred and was not detected.
Repeat Finding – Yes.
Recommendation – Management, the contract accountant, and the Board of Listening House should remain involved on the financial affairs of Listening House on a regular basis to provide oversight and independent review functions and mitigate the weakness created by the lack of segregation.
Auditee's comments and response – Management, the Board, and its contracted accounting staff will regularly monitor financial reports and activities of Listening House.
Responsible party for the corrective action – Molly Jalma, Co-Executive Director