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Specific Control/Compliance Activity |
Oversight/Monitoring Responsibility |
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Policy Statement |
Policy Reference |
Risk
"What" can go wrong |
Risk Factors
"Why" it would happen |
General Procedures
"How" to prevent (summary) |
Activity
"How" to prevent (detail) |
Who Performs Activity |
(Dept, Dean, Prov, Central, etc.) |
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1. Cash Receipts (Cash, Checks, & Wire Transfers)
All monies received by the University should be handled in a manner that provides for prompt establishment of accountability, adequate safeguarding of receipts, and timely deposit to appropriate accounts.
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U of M 3.12.1.3
U of M 3.12.1.3
U of M 3.12.1.3
U of M 3.12.1.3
U of M 3.12.1.3
U of M 3.12.1.3
U of M 3.12.1.3
U of M 3.12.1.3
U of M 3.12.1.3
U of M 3.12.1.3
3.12.1
3.12.1.3
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Fraud, misappropriated funds
Lost or stolen receipts
Lost interest income
Negative publicity
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Unethical employees
Unethical outsiders (e.g. robber)
Not knowing policy
Overriding policy
Staff Turnover
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Establish Accountability
Deposit timely
Reconcile receipts to deposits
Provide adequate security
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Document all cash and check payments received through the use of Dept receipts, cash registers, tickets, or payment logs
Document all wire transfers received using wire CR’s
Provide adequate physical security (locked desk, file cabinet or safe) for receipts prior to deposit.
Restrictively endorse all checks promptly as received
Deposit receipts in a timely manner to Bursar ($1,000 or once/week minimum)
Process wire CR's in a timely manner
Reconcile Cash receipts to deposits on a regular basis and maintain a record of cash overages and shortages **
Perform independent review of cash reconciliations and cash differences for reasonableness **
Deposit all cash receipts intact (e.g. don’t use receipts for petty cash purchases or refunds)
Pursue collection of checks returned by the bank
Restrict safe combinations and keys to essential employees and periodically change **
Report significant cash receipt losses or thefts to the Police, the Office of Internal Audits, and the Insurance Office if applicable
Refrain from depositing income to O&M accounts
Determine appropriate classification of revenue. Process and code accordingly:
- gifts through foundation,
- sponsored income through
SPA, or
- in accordance with external sales policy
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Dept. Designee
Dept. Designee
Dept. Designee
Dept. Designee
Dept. Designee
Dept. Designee
Dept. Designee
Supervisor
Dept. Designee
Dept. Designee
Dept. Designee
Dept. Designee
Dept. Designee
Dept. Designee
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Department Head
Dean
Department Head
Department Head/
Dean
Department Head
Department Head/
Dean
Department Head
Department Head/
Dean
Department Head
Department Head
Department Head
Department Head
Department Head/
Police/Audits
Accounting Services
Department Head/
Dean |
.
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2. Credit Card Receipts
Where approved departments may accept credit card payments for goods or services delivered.
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U of M 3.12.1
U of M 3.12.1
U of M 3.12.1
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Unauthorized bank relationship
Misapplied payments to U of M accounts
Non collection of amounts due
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Not knowing policy
Bank errors
Customers with overdrawn or stolen cards
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Obtain Asset Management approval
Reconcile CR’s to merchant slips
Act on bank disallowed charges
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Obtain approval to accept credit card payments from Asset Management.
Retain merchants slips/sales journal to document credit card sales.
Reconcile credit card CR's to merchant slips and sales journal on a regular basis. **
Verify disallowed charges on merchant statement and pursue collection where needed
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Dept. Designee
Dept. Designee
Dept. Designee
Dept. Designee |
Department Head/
Dean
Department Head/
Dean
Department Head/
Dean
Department Head |
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3. Accounts Receivable
Records and procedures will be maintained to identify all University accounts receivable, and to provide reasonable assurance of prompt collection. (TBD) *
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U of M 12C - 2
U of M 12C - 1
U of M 12C - 2
U of M TBD *
U of M 12C - 2
U of M 12C - 2
U of M 12C - 2
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Bad debts/uncollectable accounts
Fraud, misappropriation
Inadequate records to support legal claims
Reduction in U of M receipts
Lost interest income
Customer favoritism
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Unethical employees
"Deadbeat" customers
Not knowing policy
Overriding policy
Staff Turnover
Inadequate information
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Account for all invoices, receipts, or adjustment forms used.
Maintain separation of duties
Keep records of individual accounts
Reconcile detail of accounts
Establish billing & collection procedures
Authorize account adjustments
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Maintain adequate separation of duties between the cash receiving function and the accounts receivable record keeping function
Pre-number or system number Account Receivable Invoices, payment documents, and adjustment forms and verify that they are properly accounted for
Maintain individual accounts or unpaid invoice file for each accounts receivable customer
Send routine billing statements (e.g. monthly) to all customers **
Reconcile detail of accounts receivable on a routine basis **
Establish adequate collection procedures for accounts receivable, including appropriate measures for delinquent accounts
Document and properly authorize credit adjustments or write-offs
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Dept. Designee
Dept. Designee
Dept. Designee
Dept. Designee
Dept. Designee
Dept. Designee
Dept. Designee |
Department Head/
Dean
Department Head/
Dean
Department Head/
Dean
Department Head/
Dean
Department Head/
Dean
Department Head/
Dean
Department Head/
Dean |
4. Gift Receiving
All gifts received will be reported to and processed through the appropriate foundation.
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U of M 3.16.1
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Unacknowledged gifts
Irate donors/reduced gift level
Spending inconsistent with donors wishes.
Incorrect coding of gifts
Accepting inappropriate gifts
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Not knowing policy
Departments desiring to control own fund raising
Avoidance of ICR & SPA review
Incorrect recognition of all gifts
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Report all gifts to Foundation
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Report all gifts received (cash, stock, equipment etc.) to appropriate Foundation (UMF, MMF, Arboretum, or 4H)
Hand deliver all cash gifts to foundation for deposit
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Department Designee
Department Designee |
Department Head/
Dean
Department Head/
Dean |
5.External Sales
Any department or college desiring to sell supplies or services outside the University, must obtain appropriate approval.
Departments are responsible for the reporting collecting and remitting of applicable taxes, including sales tax, excise tax and unrelated Business Income Tax (UBIT).
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U of M 3.2.3
MN Statute 297 A
U of M 3.2.3
IRS Code Section 511
U of M 2C - 2
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Activities not consistent with U of M objectives
Violation of IRS or state law
Possible penalty & interest assessed
Exposure to legal, business, insurance , or tax liability
Unfair competition
Unaccountable receipts
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Not knowing policy or laws
Staff turnover
Staff circumventing policy
Changing tax law
System limitations
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Approval of revenue generating activity
Charge, collect, & remit sales tax if applicable
Identify & report any UBIT
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Obtain approval from Dean and Senior VP for Finance prior to initiating revenue producing activity
Charge, collect, and remit sales tax where appropriate for all taxable sales **
Identify any unrelated business income and report it to Accounting Services annually
Also see control activities under the Financial Mgt. Business Process
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Department Designee
Department Designee
Department Designee |
Dean AND
VP for Finance
Department Head
Department Head/
Accounting Services |
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6. Sponsored Grant & Contract Revenue
Revenue on Sponsored Accounts should be accurately recorded on University ledgers.
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U of M 2.1.2
U of M 2.1.2
U of M 2.1.2
U of M 3.12.1
U of M 3.12.1
U of M 3.12.1
Sponsored requirements - for example: NIH or PHS Grant Guidelines, or other agency regs.
Regents' Policy on Conflict of interest
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Depletion of U of M resources.
Incorrect Sponsored Account budgeting
Incorrect Sponsored Account reporting
Avoidance of appropriate review
Sponsor disallowances
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Not knowing policy
Attempts to circumvent policy
Decision to shortcut procedures
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Accurately budget of sponsored account revenue
Update budgets for changes in revenue
Obtain appropriate review
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Include estimates of program income with grant proposals
Route all program income on sponsored accounts through SPA
Notify SPA of any unanticipated grant program income
Route all payments from sponsors through SPA
Record refunds & reimbursements as reduction of expense in appropriate account and object code
Report funds received from private industry to appropriate University committee (IURRC) for determination whether funds are gift or contract.
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Department Designee
Department
Department
Department
Department Designee
Department Designee |
SPA
SPA
SPA
SPA
SPA
Department Head/
Dean |
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7.Internal Sales
University organizations planning to sell goods or services to University departments or colleges must obtain initial and periodic approval based on the criteria of ISO policy.
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U of M 3.2.1
U of M 3.2.1
U of M 3.2.1
U of M 3.2.1
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Unauthorized operations
Inappropriate rates (i.e. overcharging/undercharging)
Failure to cover true costs
Non-compliance with Federal Regulations
Unfair competition |
Decline in other funding sources
Not knowing policy
Inadequate information available (e.g. true costs)
Changing federal regulations
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Obtain appropriate approval
Calculate appropriate rate |
Calculate Service Center rates for internal sales based on allowable cost, and break even projection
Obtain approval of ISO by controller if sales are > $25,000, or by RRC manager if sales are < $25,000
Process charges to departments within U of M timing requirements
Provide adequate support documentation to unit charged.
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Department
Department
Department
Department |
Department Head/
Dean
Department Head/
Dean
Department Head/
Dean
Department Head/
Dean |
