Finding Text
Segregation of Duties
Type of Finding: Material Weakness in Internal Control over Financial Reporting
Condition: There is not an ideal segregation of duties among personnel involved in the accounting
function. A lack of proper segregation of duties could allow errors or irregularities to occur and go
undetected. This condition is inherent in operations which, for sound economic conditions, must
function with a small number of office personnel, and correction of this condition would require the
employment of additional office personnel. Consequently, corrective action may not be practical.
Criteria or specific requirement: A proper segregation of duties is an important component of a
system of strong internal controls and should be implemented, if possible.
Cause: For sound economic reasons, the Project and the management company must function with a
small number of office personnel, and correction of this condition would require the employment of
additional office personnel. Consequently, corrective action may not be practical.
Effect: A lack of segregation of duties increases the risk that errors or fraud may occur and not be
prevented or detected on a timely basis.
Repeat Finding: Yes, Prior year finding 2022-001
Recommendation: When this condition exists, management's and the board's close supervision and
review of accounting information is the best means of preventing or detecting errors and irregularities.
Views of responsible officials and planned corrective actions: We agree and will continue to
monitor monthly financial results and accounting information as correction is not practical