Procedure Number: 5.1.7-P
Current Effective Date: 11/01/2018
Original Effective Date: 09/01/2009
Revision Dates: 09/01/2009, 04/01/2009, 10/20/2018
Revision Number: 3
Responsible Official: System Director of Business Services
To provide guidance on internal controls.
This procedure applies to all colleges and the System Office.
Each college and the System Office must ensure that adequate internal controls exist in key financial processes.
- Key financial processes include cash collection, procurement card use and payroll.
- Internal controls help ensure that accountability and control is maintained for all transactions.
- Internal controls are developed and implemented to prevent and detect errors and to avoid and reduce the likelihood of fraud and theft.
- Proper internal controls are achieved primarily through appropriate design of processes/procedures and segregation of duties.
- Each business unit must be able to demonstrate that adequate internal controls have been established and are being used.
Business processes, including forms and procedures, must be designed to establish an adequate internal control structure. Examples include:
- Pre-numbered receipts are provided to the payee for receipt of cash/checks.
- All receipts of cash/checks are made at the business office unless the college can clearly demonstrate that adequate controls exist in another area which accepts cash/checks.
- Offices that receipt cash/checks utilize cash registers or a cash receipts log to record transactions.
- Management approves all expenditures.
Job duties must be properly segregated to establish an adequate internal control structure. Examples include:
- The employee preparing an invoice does not receive the payment
- The employee accepting cash does not prepare the deposit.
- The employee with payroll responsibility does not have the ability to perform personnel (HR) activities.
Contact the System Office of Audit Services for assistance in identifying key financial processes, designing internal control processes/procedures and analyzing job duties to ensure proper segregation of duties.