Professional Documents
Culture Documents
Bestpracticesfinal
Bestpracticesfinal
and
Best Practices
Goals
Describe Basic Internal Control Objectives
Describe the Best Practice Procedures Applied in Specific Areas
Cash Receipts
Signature Authority
Procurement
Accounts Payable
Payroll
Independent Contractors
Travel
Business Meals and Entertainment
Account Status Reports
Property Management
Conflict of Interest
Information Technology
financial data.
subject.
Internal Controls
Internal Controls
Its Good for Your Fiscal Health
Balanced Diet
Exercise
Good balance of leisure and work-mental health
(Tegen and Stinson, SACUBO April 2006)
Control Environment
Risk Assessment
Control Activities
Information and Communication
Monitoring
-COSO Integrated Framework Executive Summary
Staff Training
Organization Charts/Job Descriptions
Performance Measures
Segregation of Duties
Preventing one individual from having virtually complete
control over a financial process.
for Expense
Purpose
Authorization
for Other
Delegation of Signature Authority
Monthly Account Status Report Reconciliation
Annual Property Inventory
Independent Verification
Complexity
Decentralization many hands, need accountability
Repeat Problems
Unresponsive to prior weaknesses
Exposures
Detective Controls
misappropriation.
Making controls infallible is cost prohibitive
and unnecessarily cumbersome.
Controls do not eliminate the human factor.
To a significant extent, systems of internal
control rely on people and their actions.
Cash Receipts
The term cash receipts includes:
Currency
Checks
Credit cards
Wire transfers
Cash Receipts
Use of Revenue Object Codes
amounts received for
affiliated institutions
conferences and seminars
alumni functions
Cash Receipts
Use of Expense Credits
Examples include:
Returned or rejected items
Overpayments
Risks
Theft/fraud.
Mismanagement of funds.
Mis-statement of revenue and expenditures.
Noncompliance with University, BOR, State and Federal policies.
Types of documentation
Verification Procedures
Signature Authority
Transactions must be reviewed and approved by those officers
under whose responsibility the project lies.
Signatory authority may be delegated however, primary
responsibility for funds and transactions remains with the
budgetary unit head.
It is therefore necessary for a policy to be in writing to ensure
the delegation is authorized.
Signature Authority
The written signatory authority document should be:
Contain:
Vouchers.
Purchase requests.
Accounts Payable
Payroll
Risks
Delegated faculty / staff members sign their own name and not the
dean or budgetary unit heads name.
The University Procurement Office has sole responsibility for the coordination of
all University procurement activities.
Departments are authorized to make direct purchases with P-Cards and Petty
Cash.
The budgetary unit heads have the primary responsibility for the approval of all
purchases charged against the accounts under their administration.
The responsibility for receiving and inspecting supplies and equipment rests
with:
Purchase orders
Physical plant work orders
Requests for authority to travel
Risks
Misappropriation of funds.
Loss of sponsored funding.
Disallowance of costs.
Noncompliance with federal regulations.
Delay of future funding.
Delay of delivery of goods and services.
Delay of payments to vendors.
Jeopardized relationships with vendors.
Jeopardized credit standing of the University.
Payroll
Payroll disbursements represent the single largest expense
category to the University.
All payrolls are processed electronically through a web based
electronic payroll system.
All new employees are required to have their payments made
through direct deposit.
The University processes four types of payrolls:
Monthly Payroll
Academic Payroll
Salaried Biweekly
Hourly Biweekly
Payroll
Monthly Payroll
Administrative personnel.
Employees exempt from coverage under the Fair Labor Standards Act (Wage and Hour Law)
Academic Payroll
Compensation is earned at the rate of one-half of the contract salary for each academic
semester.
Additional payments for Maymester & summer session classes can be made.
Payroll
Salaried Biweekly
The hourly rate of pay is determined by dividing the annual rate by the number of available
work hours in the fiscal year.
The gross amount of each check is determined by multiplying the hourly rate of pay by the
number of hours reported on the time sheet.
Hourly Biweekly
The gross amount of each check is determined by multiplying the hourly rate of pay by the
number of hours reported on the time sheet.
Payroll
Personnel Report
Payroll Voucher
Time Records
Payroll
The Personnel Report is used to document:
Employment
Termination
Change in status of all personnel
Approved by:
Department heads
Deans
Vice presidents (in some cases )
Personnel Reports are electronically routed to the appropriate units.
Payroll
Payroll Vouchers contain:
Names of all persons paid on the preceding payroll
Social security numbers
Hourly rate of pay or gross salary
Approved by:
Department heads
Payroll vouchers are sent to the Payroll Department.
Payroll
Time Records, are prepared for each employee who is covered and
nonexempt under the Federal Fair Labor Standards Act. The document
records:
Name of employee
Pay period
Hours worked
Approved by:
employee,
Supervisor
Payroll
International Employees
All international employees are required to complete the
UGA Tax Information Form for Internationals
Immigration documents
Passport
I-94 card and
Visa
authorization/processing
distribution of the pay check
Risks
Staff members who approve or process payroll documents do not have access to payroll checks.
Payroll vouchers are properly approved by an appropriate supervisor having knowledge of the hours
worked.
Payroll vouchers are signed and approved on the last working day of the pay period.
Time cards are not returned to employees after they are approved by supervisors.
New hires are processed and paid in the appropriate pay cycle.
Payments to Non-Employees
Independent Contractors
Payments to Non-Employees
Independent Contractors - Minimum standards of documentation to use of
independent contractors as consultants require evidence that:
Payments to Non-Employees
Honoraria
An honorarium is:
Examples are
Guest lecturers
Workshop leaders.
Payments to Non-Employees
Prizes and Awards
Payments to Non-Employees
Stipends/Fellowships
Objective
Individuals are classified correctly as either an employee or
consultant / independent contractor for tax withholding
purposes.
Risks
Travel
The University reimburses employees for approved, necessary, and reasonable
travel expenses incurred while conducting business for the University.
Each employee is required to have travel approved by his/her department head
or other designated official.
For out-of-state travel, it is necessary to obtain:
Prior approval from the appropriate dean's, director's, or other unit head's office.
A financial review by the Travel and Encumbrance Section of the Accounts
Payable Department.
Travel outside of the continental limits of the United States must be approved
first by the appropriate vice president and then by the President's Office.
Reimbursement for travel expenses (meals, lodging, transportation and
miscellaneous expenses) is requested using an Employee Travel Expense
Statement.
Travel
In general, services (as well as materials, goods, or
supplies) must be received before payment can be
remitted.
Food, lodging or other non-conference related
expenses must be paid by the employee.
The employee will be reimbursed, as appropriate,
using normal travel reimbursement procedures.
Travel
Non-employees or any other organization for rendering a service
Charges are recorded as per diem and fees expense and not travel for nonemployees.
Risks
Employees may be reimbursed for meals, not associated with overnight travel, if:
Risks
The proper object codes are used when coding various entertainment
expenses.
Account Reconciliation
Transaction Verification
Risks
The reconciliation between source documents and the Account Status Report
would likely detect items:
The department director or PI review the monthly reports once the reconciliation
is completed
Office Machines.
Electronic Audio/Visual Equipment.
Photographic Apparatus.
Firearms.
Art objects/Antiques.
Acquisition,
Reutilization, and
Disposition
Disposed,
Cannibalized,
Traded-in, or
Judged obsolete
Risks
Proper equipment object codes are used for equipment with a per unit
cost of $5,000 or more and with a useful life of more than three or more
years.
Conflict of Interest
The appearance of a conflict of interest exists when a
reasonable person will conclude that the employee's ability to
protect the public interest or perform public duties is
compromised by personal interest.
Unlawful for any full-time state employee to transact any
business with the agency by which such employee is employed.
A full-time employee is forbidden from acting for himself/herself,
on behalf of any third party, or on behalf of any business in
which the employee or a member of his/her family has a
substantial interest.
Conflict of Interest
The term "transact any business" includes
Conflict of Interest
Unlawful for any part-time state employee, on
his own behalf or on behalf of any business,
to transact business with the agency by which
he is employed, unless:
Information Technology
Information Security
Information Technology
Passwords limiting unauthorized access
Information Technology
Professional Use of University Resources
Messages, sentiments, and declarations sent as
electronic mail or as electronic postings should meet
high and ethical standards
Those users publishing their opinions electronically
should
Information Technology
Important data should be backed up
frequently.
Information Technology
Risks
Employees with access to computer systems have an established need for the access.
Access to the system is removed for terminated or transferred faculty, and staff, timely.
Computers located in heavily traveled public areas have a screen saver with password
activation invoked.
Computer files are backed up on a regular basis. Backup data is stored in a location away
from the originals
The department has sufficient technical support for ongoing operations to keep downtime
minimal.
The department has adequate resumption procedures for their automated systems that are
considered critical or vital to their daily operations.