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CITY OF MOUNDS VIEW <br /> Schedule of Findings and Responses <br /> Year Ended December 31,2025 <br /> A. FINANCIAL STATEMENT FINDINGS <br /> MATERIAL WEAKNESS IN INTERNAL CONTROL OVER FINANCIAL REPORTING <br /> 2025-001 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. <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 /> -5- <br />