BUENA VISTA COUNTY

Segregation of Duties Criteria - Management is responsible for establishing and maintaining internal control. A good system of internal control provides for adequate segregation of duties so no one individual handles a transaction from its inception to completion. In order to maintain proper internal control, duties should be segregated so the authorization, custody, and recording of transactions are not under the control of the same employee. This segregation of duties helps prevent losses from employee error or dishonesty and maximizes the accuracy of the County's financial statements. Condition - Individuals in many county offices create transactions, void transactions, reconcile, and report transactions that are not reviewed by an independent person. Cause - The County has a limited number of employees and procedures have not been designed to adequately segregate duties or provide compensating controls through additional oversight of transactions and processes. Effect - Inadequate segregation of duties could adversely affect the County's ability to prevent, or detect and correct, misstatements, errors, or misappropriation on a timely basis by employees in the normal course of performing their assigned functions. Recommendation - Each department head should review the operating procedures of their office to obtain the best segregation of duties as possible under the circumstances. The department head should utilize current employees to provide internal checks through review of financial transactions, voids, reconciliations, and reports. Such reviews should be performed by independent persons to the extent possible, and should be evidenced by initials or signature of the reviewer and the date of the reviews. Response - To the degree possible in the various departments, incoming mail is opened, and checks and cash listed, by a person not authorized to make accounting entries. Checks and cash are then turned over to accounting personnel for processing. The list of checks and cash is later reconciled with cash receipt records. To the degree possible in each department, bank accounts are reconciled promptly by a staff person who is not authorized to sign checks. To the degree possible in the departments, the following responsibilities are segregated: approval of supporting documentation of claims submitted, preparing and recording of disbursements, and reviewing of warrant with original claim documentation. To the degree possible in the departments, voided transactions, both receipts and disbursements, will be reviewed and approved by an individual not involved in the voided transaction. Conclusion - Response accepted.

We will consider a review of our procedures, with consideration of limited staff

Tax Increment Financing Criteria - Chapter 403.I9 of the Code of Iowa provides a municipality shall certify indebtedness to the County Auditor. Such certification makes it a duty of the County Auditor to provide for the division of property tax to repay the certified indebtedness. Properly designed policies and procedures pertaining to control activities over the County's computer systems and implementation of the policies and procedures help provide reasonable assurance financial information is safeguarded and reliable and helps ensure achievement of objectives in the reliability of financial reporting, effectiveness and efficiency of operations and compliance with appliable laws and regulations. Condition - The County does not have written policies and procedures related to input and review of information into the County's computer systems for the division of property tax to repay tax increment financing certified by County municipalities. Cause - Management has not required written policies for the above information-system controls related to tax increment financing. Effect - Lack of written policies for the information system could result in a loss of data or compromised data, resulting in unreliable financial information. Recommendation - The County should develop written policies addressing the above items in order to improve the County's control over its information system related to tax increment financing. Response - The County will comply in the future with these recommendations. County officials have discussed and agree these policies are needed. Conclusion - Response accepted.

We will review the extent of additional procedures which should be implemented as part of fulfilling our responsibility.

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