CLARKSDALE MUNICIPAL SCHOOL DISTRICT

Significant Deficiency not considered to be a Material Weakness/Immaterial Non-Compliance 2021-003 Finding Accounts payable testing and internal controls. Programs: Elementary and Secondary School Emergency Relief Fund I, CFDA #84.425D Compliance Requirement: Allowable Costs/Cost Principles Repeat Finding: None Criteria: An effective system of internal control is the responsibility of management. Management should establish an internal control system that ensures strong financial accountability and safeguarding of assets. This includes maintenance of accurate accounting records and following the proper purchasing procedures. Condition: During our testing of twenty-five (25) invoices, we noted three (3) in the sample where quotes were not obtained by the district. The district had an employee who was not following the purchasing/procurement procedures and was immediately terminated when management became aware of the problem. Context: Internal control procedures were tested for accounts payable in the major federal funds. Cause: The district did not properly implement an effective internal control system for accounts payable and did not follow the purchasing procedures required by the state. Effect: Without a proper internal control system being in place to ensure accurate accounting records, there is an increased risk that the financial statements could be materially misstated. Questioned Cost: None Recommendation: District should implement policies and procedures to establish an internal control system that will require accountability with regard to accounts payable and purchasing. This will ensure the proper safeguarding of assets and accurate accounting records. Response: Please refer to the Auditee?s Corrective Action Plan beginning on page 79.

Accounts payable testing and internal controls. A. Name of contact person responsible for corrective action: Name: Jessica Pulley Title: Business Manager B. Corrective action planned: District will implement policies and procedures to establish an internal control system that will require accountability with regard to accounts payable and purchasing, including obtaining quotes or bids for all required purchases. C. Anticipated completion date: June 30, 2022