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CORRECTIVE ACTION PLAN FISCAL YEAR 2019-20 AUDIT INTERNAL CONTROL RECOMMENDATIONS The purpose of this corrective action is to respond to non -material internal control findings during the audit of fiscal year ending June 30, 2020 and provide guidance regarding implementation of the associated recommendations. I 11w 1. During our audit, we noted that the District has no formal policy for the capitalization of property and equipment purchases. This leaves the organization open to the possibility that fixed assets will not be appropriately recorded, depreciated, or reported. a. Recommendation. We recommend that the District implement a written policy requiring all assets costing more than an established amount to be capitalized and depreciated over the assets' useful lives. b. Corrective Action. The District will draft a Policy for Capitalization and Depreciation of Capital Assets and provide to the Board for approval. 2. During our audit, we noted that the District was missing supporting documentation that supported the disposals of fixed assets for the year, including proof of proceeds received for disposed assets. a. Recommendation. We recommend that the District retain supporting documentation for disposition of assets, including documentation for any proceeds received. b. Corrective Action. The District's Policy for Capitalization and Depreciation of Capital Assets will include Disposal of Equipment Assets, Excess Personal Property and Scrap Materials. Guidance regarding supporting documentation for disposition will be included. 3. During our audit, we noted that a single individual approves vendor changes and is also in charge of processing cash disbursements. a. Recommendation. We recommend that the District segregates the responsibilities for adding/editing vendor information and processing disbursements and perform a regular risk assessment review to identify where segregation of duties issues need to be corrected. b. Corrective Action. Implementing this recommendation while maintaining the need for redundancy in staff (to allow for vacations, etc ... ) would require the addition of an additional staff member and is not a viable option at this time. Rather, bi-weekly the Management Services Administrator or Accounting Supervisor will print Vendor Audit Reports and review all changes, additions 12/31/2020 ATTACHMENT 4