Office of University Audit
1. Inadequate segregation of duties
- Strong internal control requires the appropriate segregation of responsibilities for authorization, physical custody of assets, and related record keeping.
- Persons who can authorize purchase orders should not be capable of processing payments.
- The person who prepares deposits should not post receipts to customer accounts.
- One individual should not have the ability to order, receive, approve for payment, and verify charges to monthly accounting reports.
2. Inadequate, or untimely, review of monthly ledger reports
This represents the final detective control in our system of accounting.
- The FRS accounting reports represent the official records of the University. All transactions recorded in the accounting reports should be reviewed and verified on a monthly basis. Senior administrators, Chairs, Principal Investigators should review the accounting reports for reasonableness and propriety. Reports generated by local "shadow" systems, although a useful management resource, do not represent the official record of the University.
3. Inappropriate access—Lack of security
- Management should provide safeguards for physical objects, restricted information, critical forms, etc.
- Control over keys; store cash and checks in secure place; lock desks and doors after hours; restrict access to forms (request for payment, petty cash reimbursement, etc.); change safe combinations periodically, always when an individual who knows the combination terminates employment.
4. Inadequate authorization of expenditures
- For grants, expenditures should be approved by the Principal Investigator, or someone designated in writing by the Principal Investigator.
- Documents such as Travel and Conference reports and petty cash reimbursement vouchers should be authorized by an appropriate University supervisor or official. A subordinate should not approve a supervisor's transactions; e.g. a secretary should not approve the Chair's T & C report.
5. Lack of appropriate authorization of time records
- Internal time sheets should be approved by an appropriate supervisor.
6. Inadequate authorization and processing of student time records
- Student time records should be approved by an appropriate supervisor and forwarded directly to the Payroll and Employee Records Center.
- Student time cards should be approved by someone with knowledge of actual hours worked; time cards should never be pre-approved.
- Student time cards, after approval signature has been obtained, should never be returned to the student. Time cards should be forwarded to the Payroll and Employee Records Center directly by the supervisor so that hours reported cannot be altered.
7. Inadequate knowledge of policies and procedures
- Departments should have written manuals as a form of administrative control, to provide guidance to employees regarding departmental policies and procedures, and to facilitate the training of new employees.
- Departments should have copies of all University policies and procedures manuals such as those published by the following: University Finance Department, Personnel, the Office of Research and Project Administration, Procurement Services.
8. Lack of control over capital equipment
- An equipment listing should be maintained and continuously updated to reflect new purchases and dispositions.
- Equipment should be properly tagged.
- A record of equipment taken home or off premises should be maintained.
- Maintenance contracts on equipment should be periodically reviewed to ensure that the University is paying only for equipment still in use.
- When faculty leave the University, appropriate approvals are required before equipment can be taken from the University.
9. Untimely deposit of receipts
- Cash and checks should be deposited in a timely manner.
- The risk of loss to the University is increased when cash receipts are held in departments for extended periods of time before deposit.
10. Personal telephone toll calls
- Personal toll calls should be charged to a personal credit card or to the employee's home telephone.
- Employees should not make personal toll calls and then reimburse the University.