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CITY OF MOUNDS VIEW <br />Schedule of Findings and Responses <br />Year Ended December 31, 2023 <br />A. FINANCIAL STATEMENT FINDINGS <br />MATERIAL WEAKNESS IN INTERNAL CONTROL OVER FINANCIAL REPORTING <br />2023-001 Segregation of Duties <br />Criteria — Internal control over financial reporting. <br />Condition — The City of Mounds View, Minnesota (the City) has limited segregation of <br />duties in a number of areas. <br />Questioned Costs — Not applicable. <br />Context — The condition applies to multiple areas as noted above. <br />Repeat Finding — This is a current year and prior year finding. <br />Cause — The limited segregation of duties is primarily caused by the limited size of the City's <br />business office staff. <br />Effect — One important element of internal accounting controls is an adequate segregation of <br />duties such that no one individual should have responsibility to execute a transaction, have <br />physical access to the related assets, and have responsibility or authority to record the <br />transaction. A lack of segregation of duties subjects the City to a higher risk that errors or <br />fraud could occur and not be detected in a timely manner in the normal course of business. <br />Recommendation — We recommend that the City continue to segregate duties as best it can <br />within the limits of what the City considers to be cost -beneficial. <br />Management Response — There is no disagreement with the audit finding. The City reviews <br />and makes improvements to its internal control structure on an ongoing basis and attempts to <br />maximize the segregation of duties in all areas within the limits of the staff available to <br />eliminate or mitigate this internal control weakness. However, the City does not consider it <br />cost -beneficial at this time to increase the size of its staff in order to further segregate <br />accounting functions. <br />-4- <br />