It's easy to assume larger local governments have no problems fully implementing best practices for segregation of duties. While segregating duties can be easier for larger governments with more employees, they can struggle with the process, too. The State Auditor's Office has some suggestions for navigating challenges on your journey to segregating duties!
“That's the department's responsibility!”
With the recent and continued influx of federal funding, you might make more subawards than in the past. (A subward is providing your grant funds to other agencies to carry out a portion of the grant program.) Passing along your money to others doesn't relieve you of grant compliance requirements – it actually adds responsibilities for you to monitor your subgrantees (referred to as “subrecipient monitoring”). Since this is a frequent area reviewed in our audits, here are a few tips and resources to keep in mind:
The Financial Intelligence Tool (FIT) has been updated with fiscal year 2020 data submitted by local governments! As of June 30, 2021, our Office received 100 percent of the 2020 annual reports from nine government types. Interested in who they are and how other government types are progressing? This interactive infogram provides you all the facts.
Cash is the heartbeat of government operations, especially for smaller cash basis governments. For better or worse, without cash there is no government spending. And without spending, there are no government services. As the old saying goes – cash is king! So how much cash is needed to keep a cash –basis government's operations humming? The proper amount of “cash balance sufficiency” (CBS) for a government depends on each government's spending priorities and what it hopes to accomplish for its citizens.
During the past year, you have worked hard with your team to keep existing services going and rolling out new services quickly. From reimagining service delivery to taking paper-based, internal processes on-line, 2020 was a year of non-stop change. In a recent survey published by Route Fifty, 72 percent of local government finance officials indicated that their team had taken on three or more new responsibilities as a result of the pandemic.
According to the Government Finance Officers Association (GFOA), it's a best practice for governments to formally adopt financial policies. We couldn't agree more. Financial policies create expectations for government operations, provide a foundation for making financial decisions and help ensure good financial management.
Here are the top 12 we consider essential:
Segregating duties is a best practice that protects against error and fraud, but it can be hard to do when you don't have enough people.
But fear not! Just because your government has a small staff does not mean it is impossible to implement this important internal control. It mostly depends on the decisions you make. Segregating duties is not an ‘all or nothing concept' – you can segregate responsibilities as much as you can and then fill in any gaps with oversight controls.
During the past year, you probably have made a lot of changes in your organization “on the fly.” The urgency of the pandemic meant some things weren't negotiable. Other changes in the external environment – regulations, economic conditions, community needs – have followed each other at a relentless pace. You likely had to make many decisions and probably convinced your team as “we have to do it this way for now.”
Spring is a time of renewal and energy, plants come alive and start to bloom, the green grasses grow, and the air has a fresh, clean scent. Spring is a great time to dust off the cobwebs of last year, and start afresh. If you've filed your annual report, then it's a good time to kick off some spring cleaning at your workplace.
Here are some ideas for you to consider:
Do you ever wonder if a key control can be a person? Maybe you have a long-standing employee that everyone goes to for answers, or perhaps an employee that really knows and understands a certain process. People are most certainly an important part of the control system, and governments benefit from these valuable employees that contribute so much.