Concept and Framework
Guidelines and Best Practices:
Authorization
Documentation
Reconciliation
Security
Separation of Duties
Resources
Resources for Internal Controls
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Documentation
Definition:
In the context of internal controls, paper or electronic
communication which
supports the completion of the lifecycle of a
transaction meets the criteria for documentation.
Anything that provides evidence for a transaction, who
has performed each action pertaining to a transaction,
and the authority to perform such activities are all
considered within the realm of documentation for these
purposes.
Purpose:
Documents provide a financial record of each event or activity,
and therefore ensure the accuracy and completeness of
transactions. This includes expenses, revenues,
inventories, personnel and other types of transactions.
Proper documentation provides evidence of what has
transpired as well as provides information for
researching discrepancies.
Supporting documentation may come in paper or
electronic form. In recent years, more often, official
supporting documentation has moved from paper based to
electronic forms. Keep in mind that in some instances
electronic processing and approvals are the source
documents for transactions.
Key Concepts and Best Practices:
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Key Concept
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Best Practice
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Format of source documents:
Well designed documents help ensure the proper recording of
transactions. Consistent use of standard forms or templates
should be considered whenever possible.
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The advance of online applications provides a fast and
efficient method for accessing supporting documentation in a
standard format. In other areas, wherever possible, the use
of templates provides the same benefits. Consider creating
templates for activities such as:
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Email approvals
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Departmentally created supporting documentation
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Time reporting
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Reimbursement logs (such as mileage logs, petty
cash, others)
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University ownership of documents:
Documents used to support University business transactions
are University property, not the personal property of
employees.
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Whenever possible, do not allow employees to take University
owned records home. If business needs require University records to be
taken home, communicate to employees their responsibility to keep
documents secure, particularly those containing personal information.
This is particularly important
to communicate to employees that have telecommuting agreements.
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Documenting changes:
Changes made subsequent to approval of documents should be
clear and concise.
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Use attachments or footnotes to document the reasons for
corrections/adjustments to any records. Make the time/date
and the approval of such corrections/adjustments clear and
evident.
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Avoid duplicate processing:
Establish a method to avoid duplicate processing, especially
in regards to transactions that result in payments to
individuals such as payroll, petty cash and travel
reimbursements.
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processing and approval of payroll, petty cash and travel
reimbursements.
Create an environment in which
payroll, petty cash reimbursements and travel reimbursements
are processed in a timely manner. Long delays in processing
create opportunities for duplicate payments that go
undiscovered.
Look closely at all late entries to
watch for double submission of payments. (Example: late
timecards, extremely late petty cash requests, travel
expenses requested at a later time separate from the rest of
the trip).
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Retention:
Retention policies exist for all types of supporting
documentation. Always keep documents for the appropriate
retention period and no longer.
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Establish a process for purging documents that have reached
the end of their retention period. Document who, when and
how each record type should be purged.
Be aware of record retention responsibilities. See Records
Retention
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