2016 05-17 CC PACKET - Laserfiche WebLink

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CITY OF GEM LAKE SCHEDULE OF FINDINGS AND RESPONSES YEAR ENDED DECEMBER 31, 2016 MATERIAL WEAKNESS 20,15-001 Limited Segregation of Duties Conditlon; Due to the small size of the City's staff, there is !ay definition a lack of segregation of the accounting functions that 'is necessary to ensure adequate internal accounting .control. While we realize this scenario is common for small entities, we are required to report tNs issue and to advise tiiat a concentration of duties and responsibilities in a limited number of individuals is not desirable from an internal control perspective. Criteria: Generally, a system of internal control contemplates separation of duties. such that no individual has responsibility to execute a transaction, hay..e physical access to the related. assets; and have responsibility or authority to record the transaction. Effect, The City is unable to maintain segregation of incompatible duties. Cause: The condition is due to a limited number of personnel.. involved in receipt and disbursement processes. Recommendation: Controls should be reviewed periodically and: consideration given to improving the segregation of duties. In making this review,. it is impnrtant,to:consider the benefit derived as weighed against. the cost of the improvements. Manag ement Res once: Management has decided, due to the, small size;; -'of the city Is staff, that the. additional casts: of implementing the necessary cc ntrols.outweiigii the benefits that would be derived. (37}