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Policy: I.A.1x2 (inactive)

Issued: July 17, 1989

Owner: University Comptroller

Latest Review: March 8, 2000



For Current Policies:
Policy Table of Contents


1.0 Purpose

This policy describes the general guidelines for establishing and maintaining internal control procedures for departments and other University activities.

2.0 Policy [Top]

2.1 General

Internal controls include organizational plans and procedures which are designed to:

Department and activity heads are responsible for conducting their business activities in a manner consistent with good internal control.

The University Comptroller is responsible for the promulgation of policies and procedures directed toward the establishment of good internal control.

The University's internal auditors, in their periodic reviews of departments and activities, will review the system of internal control and make recommendations for improvements.

2.2 Responsibility to Safeguard Assets

Assets include all property of the University. Examples of assets are buildings, equipment, inventory, accounts receivable, and cash (including checks).

Extreme care must be exercised in safeguarding cash and items easily convertible to cash, such as accounts receivable. Appropriate physical safeguards must be employed to protect all assets. Cash must be secured in a locked facility (an appropriate safe is strongly recommended).


Any observed weaknesses in internal control should be brought to the attention of the University Comptroller immediately.

See also the following policies and procedures:

2.3 Responsibility to Verify the Accuracy and Reliability of Financial Data

The University's Financial Accounting System produces monthly reports for all accounting entities. These reports are distributed to departments and activities in the early part of each month.

It is the responsibility of departments and activities to verify, promptly, the accuracy of all reports received. Any errors should be reported immediately to the appropriate central financial office.

See also Procedure 1-4, "Reconciliation of Monthly Departmental Accounting Records to AM090/91."

NOTE: This procedure contains a list of central offices capable of helping with various kinds of Financial Accounting System-related problems.

The reliability of the monthly reports is dependent on the timely recording of all transactions. Vouchers, travel expense reimbursement vouchers, billings of support service units, receipts, personnel/payroll actions, and any other financial transactions must be forwarded promptly to the appropriate central financial office for processing.

See also Policy VII.A.11, "Timely Payments to Vendors."

The University's central financial offices will review accounts on a selective basis and seek resolution of any questionable balances.

2.4 Responsibility to Reconcile Accounts Periodically

Fiscal Administrators are responsible for ensuring each assigned account is reconciled to departmental records on a periodic basis.

Fiscal Administrators are expected to be familiar with financial policies and procedures and serve as the primary resource for inquiries on that group of accounts. "Fiscal Administrator" is the person responsible for monitoring and reconciling the activity in a group of accounts.

"Responsible Person" is the person designated to approve trans- actions and has the primary responsibility for control of the activity within the account.

2.5 Responsibility to Promote Operational Efficiency Through Organization and Training

The University is committed to achieving a high level of efficiency and effectiveness in the use of personnel and other resources.

The achievement of an acceptable level of operational efficiency is dependent on: A proper organizational plan, and Sufficient training of employees.

Organizational plans must be designed to segregate duties so that no one employee controls all phases of a transaction.

New employees should be trained adequately for their responsibilities to help assure efficiency and accuracy.

Human Resources is responsible for the development of broad training programs. Specific job training and assignment of job responsibilities are the responsibility of the department or activity head.

2.6 Adherence to University Policies and Procedures

The University's policies and procedures are a primary means of establishing internal controls. In addition to conforming to certain State and Federal regulations, these controls allow the University to fulfill the dictates of prudent management. All individuals who deal with financial and administrative matters must be familiar with and adhere to these policies and procedures. Failure to adhere to the University's policies and procedures may be considered misconduct, as stated in the State's Standard of Conduct Policy.

2.7 Monitoring of Internal Controls by the Audit Department

The University's Audit Department is an integral part of the internal controls system. This office will monitor and evaluate internal controls as part of its annual audit plan. Weaknesses in internal controls will be commented on by the Audit Department in its reports.

The appropriate department or activity head must make a written response to any findings of inadequate internal controls and take prompt corrective action as recommended.

See also Policy I.C.1, "Internal Audit."

2.8 Documenting Departmental Business Operations

Departments should document all unique business operations with internal policies and procedures. Such departmental policies/ procedures not only document current operating practices, but also enhance management's communication to employees, help produce consistency of effort during periods of turnover, and provide a training aid for new employees.

2.9 Maintenance of Internal Controls

In an effort to maintain an effective system of internal controls, University management has instituted the following measures:

3.0 Definitions [Top]

"Fiscal Administrator" is the person responsible for monitoring and reconciling the activity in a group of accounts.

"Responsible Person" is the person designated to approve trans- actions and has the primary responsibility for control of the activity within the account.

4.0 References [Top]

The following is a list of financial policies and procedures addressing major internal controls issues.

See also Employee Policies maintained by Human Resources

5.0 Approvals and Revisions [Top]

           Previous version in effect from 7/17/89 to 3/8/00 available in policy archive.


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