Minutes 03-21-2017 - Laserfiche WebLink

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10 the risk that any one individual could intentionally or unintentionally misappropriate assets. Policies should be in place requiring the segregation of certain duties. The County's payroll processing controls did not provide the appropriate segregation of duties related to the payroll processing. One individual at the County has the ability to input employee time, prepare the batch time entry reports to post to the general ledger, and edit employee hours. We recommend these controls either be segregated or compensating controls be implemented such as periodic reports reviewed of all changes made to employee time entered, new employees created as compared to reports from Human Resources, changes in employee benefits, earnings, or withholdings. During our testing we noted at the Sheriff's Department the same individual was capable of creating and approving a purchase requisition. Without some segregation of duties within these functions, there is increased exposure that someone could intentionally or unintentionally misappropriate assets of the County. Additionally, without additional internal controls related to financial reporting, errors could occur and not be detected. Joel Black resumed the PowerPoint presentation: Federal Awards — Significant Deficiency 2016-006 Monitoring Controls over 1571 Reporting Sound internal controls require that all financial and performance reports be reviewed in details by a knowledgeable person independent of the preparation process to ensure the accuracy and the completeness of the reports. This review should include both the verification and validation of the information included within the report, but also the accuracy of the information within the report. The reviewer should be able to verify the source information to the supporting sub-ledger information to ensure the valuation of the information included in the reports, the accuracy of the data, and the completeness of the information. During our testing of the preparation of the monthly 1571 report, as required by the North Carolina Department of Health and Human Services, we noted the County does not have sufficient controls in place to perform the necessary monitoring reviews to properly identify, summarize, and prepare the reports. By not having a detailed review of the report preparation and submission, the County is exposed to the risk of errors being included in the report. As the aggregation of information is very manual, with little direct monitoring controls, the County is at risk for errors to occur in the monthly reporting of federal and state expenditures and services. This report also provides information for the preparation of the County's schedule of expenditures of federal and state awards and any errors in this report would also result in an error to that schedule — see further discussion in finding 2016-005. • New GASB Pronouncements- Implemented This Year o Statement No. 72, Fair Value Measurement and Application, provides guidance on the measurement of fair values of certain accounts — most notably investments. Due to the nature of the County's investments, no significant change was required. o GASB Statement No. 76, Hierarchy of Generally Accepted Accounting Principles for State and Local Governments, provides guidance on the authoritative literature which should be utilized in applying GAAP to state and local government financial statements. No significant change for the County. o GASB Statement No. 79, Certain External Investment Pools and Pool Participants, provides for the accounting of the value of external investment pools (such as the North Carolina Capital Management Trust) at amortized cost,