General Internal Control Guidelines

A listing of specific internal control examples is available on the ASU University Audit and Advisory Services Web site.

1.  Each ASU manager needs to monitor adherence by their staff to university policies and procedures. The Board of Regents have indicated a desire for stringent personnel action for those that may intentionally or flagrantly misuse or mismanage financial transactions, or not follow financial policies and procedures. The stringent personnel action includes sanctions for the violator’s supervisor or, in the case of the ASU Purchasing Card (P-Card), other departmental personnel entrusted with P-Card reviewer responsibility.

2.  Control spending so that the agency/orgs do not go into deficit status. While the Advantage financial accounting system does have certain expenditure control features, charges for goods/services already rendered are typically processed regardless of availability of funds due to certain automatic override features that have been established in Advantage financial accounting.

Some examples of charges that are subject to the automatic override are:

  • all payroll charges, including those that are retroactively transferred from one agency/org to another
  • Departmental Limited Value Purchase Orders (PDLVPOs)
  • payments to off-campus vendors, including use taxes, freight, etc., once the purchase order has been written
  • payments to ASU service departments
3.  Determine timely funding sources for any agency/org deficits. If the org manager does not indicate a funding source for the deficit, the applicable provost/vice provost/vice president or dean is responsible for determining a funding source (see FIN 215, “Vice Presidential and College Area Responsibilities). If the agency/org becomes inactive, instruct the appropriate accountant on the disposition of any surplus.

4.  It is inappropriate for a department to have a deficit agency/org while the department has related funds on deposit at the ASU Foundation or other financially related organization. Each deficit agency/org at ASU represents lost investment income to the university. A deficit agency/org can be assessed, upon notification by Financial Services, a charge equivalent to the amount of investment income lost during a given period due to that agency/org’s deficit balance.

5.  Adhere to the policies and procedures presented in this manual for maintaining agency/orgs and processing/coding transactions.

  • If the university incurs an IRS penalty as a result of departmental coding errors or failure to follow prescribed policies and procedures, the department may be assessed the penalty.
  • Violation of policies and procedures could subject the violator, and his or her supervisor, to disciplinary action ranging from reprimand to involuntary termination.

6.  Designate another person as org manager if transferring to another position on campus or leaving university employment.

7.  Review the monthly Advantage financial accounting system detail expense transaction reports to determine that all charges and credits for the month are appropriate. The monthly expense review should also include the use of the BPC dashboard, MyReports queries, or other resources as necessary to verify salary and/or wage expenses for each employee. If the monthly review identifies an overpayment or underpayment of wages or salary, please contact your payroll specialist in Payroll Services to promptly correct the error. Best Practices related to reconciling payroll expense are available on the Financial Services Web site. Adopting these Best Practices ensures that adequate controls in compliance with this university policy are in place. Review the monthly Advantage detail revenue transaction reports to determine that all revenue has been recorded. Review monthly Advantage summary reports for reasonableness. These duties may be performed by the org manager or other personnel in the office (e.g., administrative associate/assistant or business manager).

  • For org managers having responsibility for Auxiliary Enterprises (third digit of area code is a 2), reconcile on a timely basis balance sheet accounts (e.g., deferred revenue and deferred expenses) to supporting internal documentation.

8.  Contact the accountant in Financial Services or the sponsored projects officer (SPO) in the Office for Research and Sponsored Projects Administration (ORSPA) assigned to the agency/org to answer questions or provide further clarifications.

Note:

The accountant or SPO for each agency/org is listed in the upper right-hand corner on the monthly Advantage reports.

9.  Ensure that any lobbying-related expense—including the payment of membership fees for which a portion of the fee has been designated to be used for lobbying—has written approval from the vice president for Public Affairs or the university designated lobbyist (see ACD 205–01, “Political Activity—General”).

10.  Ensure that a department or similar organizational unit proposing a capital acquisition costing $5,000 or more screens for equipment availability within the department or unit. An org manager’s or authorized signer’s online approval, or signature on an offline form, certifies to Financial Services that screening for equipment availability has occurred.

11.  Ensure that, in accordance with university policy and Arizona Revised Statutes §§ 38–501 to –511 (Conflict of Interest of Officers and Employees), neither the org manager, anyone else participating in the award decision, nor a relative will benefit financially from or be a recipient of any outside services order or related payment. If any potential conflict of interest exists, it must be reported to the Office of General Counsel.

12.  Ensure that all written documents that result in an expenditure of university funds are approved with an original authorizing signature. Signature stamps are not acceptable.

13.  Restrict personal use of university resources. If personal use of university resources does occur, however, the org manager is responsible for ensuring within her or his area compliance with university policy requiring reimbursement to ASU from ASU employees for any university resources committed to personal use (see FIN 117, “Personal Use of University Resources”).

14.  Ensure that Financial Services is consulted about potential sales tax reporting for departmental sales of goods/services (see FIN 108, “Sales Tax”). Ensure that Financial Services is notified in writing of any revenues being generated that may be subject to unrelated business income tax (see FIN 122, “Unrelated Business Income Tax”).

15.  Notify Financial Services when an agency/org is no longer needed so that the agency/org can be deactivated on the Advantage financial accounting system.

16.  Make all payments for:

      a. Student scholarships, grants, loans, and other financial aid

      b. Employee postgraduate research grants, awards

      c. Any other compensation, excluding employee reimbursements, to ASU faculty, staff, and students from an ASU agency/org and not from the ASU Foundation or other financially related organization.

  • If the funding for these transactions is from funds located at the ASU Foundation or other financially related organization, then a transfer of the funds to ASU needs to be made so that these payments can be made from an ASU agency/org.

17.  Make all payments to nonresident aliens through an ASU agency/org and not from the ASU Foundation or other financially related organization.

18.  Obtain a fingerprint check on the finalist for each new position hire that will handle financial transactions as a job responsibility on an ongoing basis. These responsibilities include but are not limited to:

  •  The collection or handling of cash or checks
  •  Writing or approving checks
  •  Having access to a direct money stream
  •  Being an authorized user of a P-Card
  •  Being a fiduciary to ASU.

Persons who only have accounting system data entry and/or scanning authority do not need the fingerprint check. Faculty or staff who are principle investigators on sponsored projects are normally the org managers on the sponsored project accounts and may be set up with either scanning authority only or full approval authority. If scanning authority only is selected, a fingerprint check is not required.

19.  Avoid transacting business with or making payments to any organization or person or through a bank included on the U.S. Department of the Treasury’s list of Specially Designated Nationals and Blocked Persons, issued by the U.S. Department of the Treasury, Office of Foreign Assets Control. A link to this list is located on the Accounts Payable Web site. Any civil penalties imposed by the U.S. Department of the Treasury, Office of Foreign Assets Control, on ASU for violation of this federal law is the responsibility of the department initiating the payment.

20.  All federal funds are to be deposited with Sponsored Projects except for federal financial aid funds, which are to be deposited with ASU’s Office of Student Financial Assistance. Federal funds may not be deposited directly by any department to any of their non-sponsored agency/orgs.