Housing Authority of the City of DrumrightLocal Government

Segregation of Duties Criteria: To ensure effective internal control, a segregation of duties between individuals who authorize transactions and individuals who have control over related assets must always exist. Condition: The present system of internal accounting controls in certain situation does not provide for segregation of duties in the performance of functions due to a limited size of the staff. Questioned Costs: None noted. Effect: As a result of this condition, there is a likelihood that intentional or unintentional errors will go undetected. Cause: Due to the small size of the entity, the Authority?s decision was based on a ?cost to benefit? relationship which does not justify the addition of additional staff to accomplish the desired segregation. Recommendation: I recommend that the Authority take steps to ensure compensating controls are in place to mitigate the lack of segregation of duties so that risk of errors can be prevented. Management?s Response: During FY 2021, we did not have a need for a third person in the office (we believe Covid-19 played a part in the flow of traffic in the office). We take great steps to verify every deposit if correct and accurate. One of us in the office takes the rent and the other writes up the deposit and takes it to the bank. For FY 2022, this has been taken care to prevent any further audit findings regarding segregation of duties.

Bank Collateral Criteria: All funds on deposit at a financial institution should be safeguarded by either FDIC insurance or collateral pledged by financial institution. Condition: I noted the following deficiencies in bank collateral for funds as of September 30, 2021: Deposit Insured Deficiencies Blue Sky Bank $307,617 $250,000 $57,617 Questioned Costs: None noted. Effect: The Authority funds on deposit in excess of $250,000 are vulnerable. Cause: The Authority did not monitor the balances of its accounts closely enough to ensure adequate protection of all funds. Recommendation: I recommend that the Authority request the bank pledge collateral to insure the Authority?s balances in excess of the FDIC limit of $250,000. Management?s Response: This was an oversight by the Authority. We have contacted the bank to implement and gotten this taken care of. Going forward, we will closely monitor all investments the Housing Authority has. For FY 2022, this has been taken care of to prevent any further audit findings.