Standards of Internal Controls - Arizona State University

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3.1.4 Where a decision, based on sourcing policy, is made to use sole or single sources of supply for a product or commodity, the justification should be documented, approved, and retained in accordance with policy. For sources where a disruption of supply may have significant negative consequences to the university, a business interruption plan should be established, documented, and approved in order to ensure adequate supply of material during emergencies. A sole source of supply situation exists whenever a given product/material can be purchased from only one supplier. A single source of supply situation exists when several suppliers are capable of providing products or materials but only one supplier is used. Refer to risks: A-2, A-3, A-6 A-4 Records may be lost or destroyed. 3.1.5 Suppliers should be periodically monitored in accordance with university policy to ensure that actual performance meets expectations. Performance reporting may include: a. Percent of on-time delivery; b. Accuracy of shipments; c. Product quality; and d. Departments should calculate actual costs as compared to previous year or formula/target costs. Refer to risks: A-1, A-2, A-3, A-6 A-5 Records may be misused or altered by unauthorized personnel to the detriment of the university and its suppliers. A-6 Materials may be received early or late resulting in business interruption or excessive levels of inventory.
3.2 PURCHASING Standard of Internal Control Risk if Standard is Not Achieved 3.2.1 All purchasing responsibilities should be B-1 segregated from disbursement and A purchase may be: accounting activities. Refer to risks: B-1, B-2 a. Unauthorized or improperly authorized. b. Made from an unauthorized supplier. 3.2.2 Independence between purchasing agent B-2 c. Ordered and received by an unauthorized individual. Sensitive payments, related party or buyer and supplier should be transactions, or conflict of interest maintained. This can be accomplished situations may occur. The potential for through periodic buyer rotation, errors and irregularities is substantially participation in purchase contracts, or the use of commodity teams. Other compensating controls should exist if business conditions make the above impractical. Refer to risks: B-1, B-2 increased. 3.2.3 Purchase orders are required for B-3 Rather than being returned or refused, merchandise or services purchased as the following items may be received and defined by university policy. Purchase orders/requisitions are not always ultimately paid for: appropriate or required for "one-time" expenditures such as training seminars, a. Unordered goods or services. professional dues, etc. Where a paperless environment exists, purchase orders/requisitions need not be hard copy b. Excessive quantities or incorrect items. but adequate documentation, control authorization and record retention should be addressed. Refer to risks: B-1, B-3, B-4, B-10 c. Canceled or duplicated orders. 3.2.4 Procurement requests should be initiated B-4 by the requesting department and be properly approved before a purchase commitment is made. Refer to risks: B-1, B-2 Records may be lost or destroyed. 3.2.5 All purchase orders/transactions should B-5 Records may be misused or altered by be uniquely identifiable and traceable unauthorized personnel to the detriment and periodically accounted for. Refer to risks: B-5, B-6 of the university and its suppliers. 3.2.6 All purchase orders or access to input B-6 Goods and services may be received but screens should be safeguarded and not reported or reported inaccurately. internal control procedures for Unrecorded liabilities and misstated processing and approval should be in place to prevent unauthorized use. Refer to risks: B-1, B-2, B-4, B-5 costs may occur.
Page 1 and 2: STANDARDS OF INTERNAL CONTROL Issue
Page 3 and 4: I. PREFACE Our university has long
Page 5 and 6: The internal control process should
Page 7 and 8: STANDARDS OF INTERNAL CONTROL Intro
Page 9 and 10: STANDARDS OF INTERNAL CONTROL QUICK
Page 11 and 12: 2.0 REVENUE CYCLE The Revenue Cycle
Page 13 and 14: 2.3.2 A tuition bill should be prep
Page 15 and 16: 2.4.7 Management should develop an
Page 17: 3.0 PROCUREMENT CYCLE The Procureme
Page 21 and 22: 3.3 RECEIVING Standard of Internal
Page 23 and 24: 3.4 ACCOUNTS PAYABLE Standard of In
Page 25 and 26: 3.5 DISBURSEMENTS Standard of Inter
Page 27 and 28: 4.0 PAYROLL CYCLE The Payroll Cycle
Page 29 and 30: 4.1.8 HR responsibilities, includin
Page 31 and 32: 4.2.10 Departmental procedures shou
Page 33 and 34: 4.4 DISTRIBUTION OF PAYROLL Standar
Page 35 and 36: 5.1.5 Policies should be establishe
Page 37 and 38: 5.2.11 All departments should compl
Page 39 and 40: 6.1.2 Department managers, in coord
Page 41 and 42: GENERAL DATA PROCESSING CONTROLS Ge
Page 43 and 44: 6.2.8 Computer hardware sites shoul
Page 45 and 46: 6.3.4 Security administrators, in c
Page 47 and 48: 6.3.10 Custodians of computer equip
Page 49 and 50: 6.5 SYSTEMS DEVELOPMENT METHODOLOGY
Page 51 and 52: 6.6 CONFIGURATION MANAGEMENT Change
Page 53 and 54: G-6 In the event of a disaster, cri
Page 55 and 56: 6.8.2 Application system owners sho
Page 57 and 58: 6.10 PROCESSING CONTROLS Standard O
Page 59 and 60: 6.12 PAPERLESS TRANSACTION PROCESSI
Page 61 and 62: 7.0 ENVIRONMENT, HEALTH and SAFETY
Page 63 and 64: 8.1.7 Formal ABOR approval is requi
Page 65 and 66: 9.2 ACCESS CONTROLS A-6 Unauthorize
Page 67 and 68: 9.4 PHYSICAL ASSET PROTECTION Stand
Page 69 and 70:
10.0 INTELLECTUAL PROPERTY (IP) The
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