Internal Control Assessment Tool
Please complete the assessment tool by placing an “X” in the appropriate box below. Answer “Yes” only when all of the sentences in a group can be answered in the affirmative. If a statement does not apply to the department, place an “X” in the “N/A” box. Please use the Notations field to supply any necessary explanatory information. This field will expand as needed when you enter data. For information related to internal controls, please refer to the Best Practices guidelines available on the Accounting Services and Internal Audit websites:
http://www.controller.cmich.edu/Accounting/Bestpractices.htm or
http://www.ia.cmich.edu/internal.htm
Call Sue Parsons at 774-7358 if you have any questions or need assistance in completing this checklist.
Department: Educational Materials Center Date: April 30, 2012
General Business and Management Practices
The department has an up-to-date organizational chart that depicts the responsibilities and reporting relationships of each employee.
Yes / No / N/A / NotationsX / Org charts are maintained by ProfEd HR and are accessible on the ProfEd intranet.
The department has written department-specific policies and procedures for conducting the business and financial operations of the department.
Yes / No / N/A / NotationsX / There are some policies (e.g., Pricing) plus procedures for each position. Johnnie Boughner is responsible for keeping procedures updated. Incumbents also update procedures for their own positions. The policies and procedures are on the share drive and the archive drive.
These policies and procedures designate approval (signature) authority and review responsibilities and cover necessary “how to” instructions, the opening and distribution of mail, key control, confidentiality issues and access to documents, information, software and equipment.
Yes / No / N/A / NotationsX / The procedures cover these areas CMU contracting authority is maintained on the Purchasing intranet site.
The department maintains current written job descriptions for all staff members.
Yes / No / N/A / NotationsX / These are available on the CMU Online Personnel Transaction System.
The department has clearly communicated the delegation of duties when an employee is absent.
X / The procedures for each position define who is the backup for each position. Personnel are cross-trained where they serve as the backup.
The department regularly communicates updates and reminders of policies and procedures to faculty and staff.
Yes / No / N/A / NotationsX / EMC is a small organization of 8 full time employees and approximately 6 student workers. Communication is informal or during monthly staff meetings.
The department’s employees are given appropriate training and supervision for their job functions.
Yes / No / N/A / NotationsX
Departmental staff and management are familiar with the university’s policies and procedures as detailed at http://www.cmich.edu/gencounsel/manual/default.htm and http://www.cmich.edu/trustees/policy-manual/policymanual.asp.
Yes / No / N/A / NotationsX / The university does an excellent job of familiarizing employees with policies and procedures as part of new employee orientation, CMU Today, and other emails to the entire university.
The department has periodic staff meetings or other means of ensuring that relevant information impacting the department’s business is communicated throughout the department.
Yes / No / N/A / NotationsX / Monthly staff meetings; monthly one-on-one meetings with each employee.
The department’s management monitors and reviews the department’s compliance with university as well as departmental policies and procedures.
Yes / No / N/A / NotationsX
A specific individual is responsible to reconcile monthly SAP financial reports to supporting receipt and expenditure documentation on a timely basis. This reconciliation is documented by signing and dating the monthly report. See http://www.controller.cmich.edu/Accounting/Policies/ReconDeptAccts.htm for details.
X / EMC is in the process of defining reconciliation procedures for SAP and the internal financial application called TurningPoint. This reconciliation is complicated by timing differences between the two systems.
Based on the reconciliation of monthly financial reports, differences and discrepancies are identified within 30 days and corrected within 90 days.
Yes / No / N/A / NotationsX / See above.
The department chair, director or other supervisor reviews and approves the report within 30 days. Approval is documented with a signature and date.
Yes / No / N/A / NotationsX / See above.
One or more specific individuals have responsibility to monitor budget line amounts in order to meet financial obligations and to reduce invalid transactions.
Yes / No / N/A / NotationsX / Additional work is underway to define procedures in this area. EMC differs from most other CMU organizations in that it is a revenue generating unit. There is a budget for operating expenses(e.g., wages and benefits, university overhead, etc.) but not for revenue or product-related costs.
The department has an organized filing system in place to store and to retrieve financial documents, supporting documentation, sponsored projects files and other business files.
Yes / No / N/A / NotationsX / Matched requisitions, invoices, and check voucher sets are filed by cost center. Customer order files are maintained in “open” and “closed” status, in both hard copy and electronic formats, and archived at the close of each fiscal. Project production files are tracked and maintained in a job jacket system.
Documents are retained for the appropriate time period in accordance with the University Record Retention Schedule. See http://www.ia.cmich.edu/recordretention.htm for details.
X / When EMC is out of space in the office area, documents are moved to Merrill Hall storage. Documents are retained longer than the retention schedule requires.
When no longer required in the departmental files, documents are disposed of or maintained as a part of the university archives in accordance with the University Record Retention Schedule.
Yes / No / N/A / NotationsX / EMC does not shred obsolete documents that no longer need to be retained on a regular basis.
At the end of the year a review of the department’s financial records is completed to ensure there are no material errors or violations of expenditure authority.
Yes / No / N/A / NotationsX / EMC relies on signatures of the Director on each transaction up to $10,000. There is no year end review process.
Cash Handling and Cash Receipts
Change funds are established and increased only as authorized by the Coordinator of Payable Accounting and not through the retaining of unrecorded receipts. See Payable Accounting policies for details.
Yes / No / N/A / NotationsX / EMC does not handle cash.
The department has a safe or cash box.
Yes / No / N/A / NotationsX / EMC does not handle cash.
A limited number of essential employees have safe combinations and/or keys to cash boxes.
Yes / No / N/A / NotationsX / EMC does not handle cash. EMC does have a safe. The combination to the safe is known to four staff members (Director plus three who are primarily responsible for, or back up to those, receiving checks that may need to be secured overnight.)
Safe combinations are changed periodically and after turnover in personnel assigned direct responsibility for the combinations. The date the combinations were last changed was ______.
x / The safe has a combination and it is not changed.
The department has bank accounts of its own and receives a bank statement for those accounts.
Yes / No / N/A / NotationsX
Change funds are used only as intended: Checks and money orders are not accepted for more than the amount of the transaction (i.e., no cash back option). The department does not cash checks.
Yes / No / N/A / NotationsX / EMC does not handle cash.
Change funds are not used as petty cash funds. There are no cash refunds, except in the case of returned merchandise.
Yes / No / N/A / NotationsX
Checks and money orders are made payable to Central Michigan University.
Yes / No / N/A / NotationsX / The EMC order form asks that checks be made payable to “Educational Materials Center, CMU”
A restrictive endorsement is immediately placed on incoming checks and money orders when they are received.
Yes / No / N/A / NotationsX
Incoming checks and money orders are deposited within 24 hours of receipt.
Yes / No / N/A / NotationsX / Jennifer Conroy, the financial specialist, takes checks to SASUB in the UC every day. Occasionally, a check is received at EMC after this delivery. Such a check is placed in the safe.
Refunds are approved by someone other than the employee processing the refund.
Yes / No / N/A / NotationsX / Check refunds are processed by Jennifer and requested by Sharon or Johnnie.
The person who opens the mail prepares a daily log of cash, checks and money orders received in the mail.
X / Sharon is responsible for preparing a log of payments received.
For funds received in person, where the department does not use a cash register, the department issues a standardized receipt. Receipts are prepared immediately when funds are collected.
Yes / No / N/A / NotationsX
Each cash register drawer or change fund box is secured when not in use.
Yes / No / N/A / NotationsX
Each cash register drawer or change fund is the sole responsibility of only one person at a time. If the fund is passed from one person to another, an appropriate transfer of custody is completed on the change fund form.
Yes / No / N/A / NotationsX
Voids processed on cash registers are authorized by the processing employee’s supervisor as evidenced with a signature.
Yes / No / N/A / NotationsX
At the end of each shift, the person responsible for the change fund counts the fund and prepares a close-out sheet or other statement to reconcile the sales receipts to the sales documentation, which includes all supporting documentation (detail cash register tape, void authorization, credit card report, sales report, sign-in sheet, etc.).
Yes / No / N/A / NotationsX
The person responsible for the sales receipts prepares a bank deposit slip (if applicable), and/or a cashier’s receipt and deposits all received funds within the time allowed by the University policy.
Yes / No / N/A / NotationsX / This process is handled by SASUB.
All funds collected are secured until deposited.
X / Checks are secured in the safe only if they are kept at EMC overnight. Jennifer keeps checks received in the morning in her desk until she takes them to SASUB in the early afternoon.
The cashier’s receipt accurately records overages and shortages.
Yes / No / N/A / NotationsX
At the end of each shift, a supervisor reviews the supporting documentation and approves the cash received/ sales reconciliation (close-out sheet).
Yes / No / N/A / NotationsX
Change funds are verified on a regular, unannounced basis by an individual other than the fund custodian.
Yes / No / N/A / NotationsX
The supervisor verifies that all checks received in the mail have been properly transacted. The supervisor assures that all appropriate supporting documentation is filed and retained with a copy of the deposit slip.
Yes / No / N/A / NotationsX
At least monthly, receipts for recurring revenues or for accounts receivable are reconciled to assure that all receipts and revenues are accounted for.
Yes / No / N/A / NotationsX / EMC does not have recurring revenues.
Duties of opening mail, processing cash received by mail, and accounts receivable reconciliation are segregated among several individuals. There is no one individual who is responsible for two or more of these activities.
Yes / No / N/A / NotationsX / Sharon opens the mail and records a list of checks received. Jennifer performs the A/R reconciliation.
Duties of collecting cash in person, making deposits, and monthly accounting reconciliation are segregated among several individuals. There is no one individual who is responsible for two or more of these activities.
X / EMC is a very small office, and the same person handles processing checks received by mail and the A/R reconciliation. No cash is received by mail.
The department has documented procedures and has assigned responsibility for pursuing payment for checks returned for insufficient funds.
Yes / No / N/A / NotationsX / EMC does not deal with checks returned for insufficient funds. Most sales are via credit card or are sales to public institutions.
Credit card transactions are processed in accordance with the bank’s credit card standards, including verification of identification and signature comparison.
Yes / No / N/A / NotationsX / EMC uses the university online credit card system or school districts call in an order using the school district purchasing card.
Credit card refunds are reviewed and approved by a second individual, as evidenced with a signature.
Yes / No / N/A / NotationsX / There is currently no procedure to require a second signature for a credit card refund. Refunds are processed by Johnnie or Sharon.
At the end of the year, the department’s revenues and cash receipts are reasonably stated in its financial records. No material errors have been left uncorrected.