Best practices and internal control

Following the procedures described in the University Administrative Manual will accomplish many best business practices. To further develop best practices, department administrators should understand some internal control concepts, including:

  • Consistency, efficiency and effectiveness
  • Segregation of duties
  • Authorization and training
  • Review and approval
  • Safeguarding assets

Apply the general tips below to improve the operations in your department.

Internal control concepts

  • Consistency, efficiency and effectiveness

    If you don't have time to do it right, when are you going to have time to do it over?

    Consistent performance increases the reliability of operating transactions. Accounting operations are considered effective when they get the job done. Efficient procedures accomplish the objectives in an accurate and timely fashion using minimal resources. Best practices eliminate duplicated efforts, streamline processes, increase productivity and employ a variety of means to achieve consistent, efficient and effective processes.

    Written departmental procedures document business processes, personnel responsibilities, and departmental operations. They promote uniformity in executing and recording transactions and serve as training tools for employees. When used effectively, they help to reduce processing errors, inconsistent practices among employees, inaccuracies and unreliable financial information.

    While accuracy is important, timeliness is another key requirement to achieve efficiency. Employees should analyze their work flows and identify ways to work smarter and save time. Timely processing in the department helps the accounts payable and accounting services departments to work more efficiently.

    The system of checks and balances that assists the complete and accurate recording of transactions is known as the system of internal control. This system provides assurance that recorded information is correct and complete.

  • Segregation of duties

    Segregation of duties is a primary concept in a system of internal control. Duties within a department should be segregated so that one person does not perform processing from the beginning to the end of a process. One person should not be in the position to authorize a transaction, execute the transaction, record the transaction and provide the sole review of the transaction. Reconciliations should be performed by a person independent of the basic process. For example, one person should not be able to accept cash, record deposits, make the bank deposits and reconcile the account.

    Segregation of duties helps to reduce the risks of inaccurate financial reporting and improper use of funds.

  • Authorization & training

    In order to accomplish accurate posting of transactions, employees should be properly trained and authorized to perform accounting and cash handling functions. Only authorized personnel should have access to automated accounting systems, cash storage, original accounting documentation and sensitive information. Proper training should include an understanding of the essential need for timeliness in processing transactions. Errors and omissions should be identified and corrected on a timely basis.

  • Review & approval

    When a process is performed outside of Workday, there should always be another level of review and approval performed by a knowledgeable individual independent of the process. The reviewer should be able to identify errors and omissions. The approval should be documented to verify that a review has been done. Review and approval help to reduce uncorrected errors, irregularities and inaccurate or incomplete information in accounts and reports.

  • Safeguarding assets

    University assets are economic resources that are expected to be of benefit in the future. Assets include cash, office supplies and equipment. Physical protection of assets is a primary goal. Cash drawers should be locked and stored in a fire-proof safe. Office supplies should be kept at reasonable quantities. Equipment should be stored in secure locked areas. Keeping accurate lists of computers and equipment helps to reduce the risk of misplacing the equipment or of someone converting the equipment to personal use.

General tips

  • Be familiar with all of the policies, procedures, laws and regulations governing university operations. These include the following:
  • Keep written procedures for your department's cash handling and accounting functions. These procedures should specify who does what and should be updated as needed.
  • If you are a principal investigator, comply with the sponsor's requirements for accountability.
  • Fulfill your responsibility yourself, do not delegate your accountability functions.
  • In the case of a mistake, submit appropriate documents to correct the mistake as soon as possible.
Financial reports
  • Reconcile Workday financial reports to transaction documents at least monthly
  • Have an appropriate person review the monthly financial report and reconciliation.
  • Prepare your budget with your best estimate of how the department's funds will be earned and expended during the year.
  • Compare actual results to the budget and follow up significant variances.
Cash receipts
  • Endorse checks immediately when received.
  • Safeguard cash and checks against loss. Maintain accountability for cash with appropriate documentation of cash transfers.
  • Deposit receipts within 24 hours in accordance with UAM 1,061. Do not retain funds for any purpose.
  • Keep a cash receipts journal, or a duplicate receipt copy, or another suitable record when accepting payments.
  • Retain cash receipts documentation in accordance with the records retention rules in the administrative manual.
Other expenses & expenditures
  • Follow the policies and procedures described in the University Administrative Manual.
  • Review and edit purchasing card statements promptly.
  • Be rigorous in following the review and approval requirements on purchasing card statements and other accounting documents.
  • Do not sign contracts on behalf of the university unless you are specifically authorized in writing by the President to do so. Policy is located in the University Administrative Manual