The Lakeland office finds this control weakness: the project manager approves and pays the same invoice. Which administrative correction best reduces risk?
Correct Answer
A) independent payment review
Separating authorization, custody, and recording duties reduces payment and cash-handling risk.
Why This Is the Correct Answer
Separating authorization, custody, and recording duties reduces payment and cash-handling risk.
Why the Other Options Are Wrong
Option B: closed bid-file archive
closed bid-file archive puts the item in the wrong financial bucket, timing, base, or comparison for segregation of duties.
Option C: retainage terms extension
retainage terms extension puts the item in the wrong financial bucket, timing, base, or comparison for segregation of duties.
Option D: vendor history deletion
vendor history deletion puts the item in the wrong financial bucket, timing, base, or comparison for segregation of duties.
Memory Technique
Segregation Of Duties ledger for Owner Reviews: put separating in the right drawer.
Reference Hint
Open-book path: tab Contractor's Manual, 2025 to Business Administration, Segregation of Duties; verify the record, approval, or control duty before selecting the answer.
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