I am curious to know what an auditors thoughts are on what a company should do when there are only 2 individuals qualified to be Database Administrators and both of these people are also responsible for internal application and development. 

What is your definition of database development? 

In my case our company is to small to have a dedicated database administrator, let alone a secondary support person that will cover him/her while they are on vacation.

In our company this person would be bored because it would only be a 8 hour a week job, on average. Now there is more than enough work for 2+ programmers.

Whats better, having an experienced DBA or some secretary who just inherited a new title so that we can maintain separation of duties on paper.