Audits: How to Prepare and What to Expect Council of Senior Business Administrators Focus Session April 21, 2004 James Laird Assistant Dean for Finance and Administration College of Science

Organization/Delegation How are duties delegated within your unit’s business function? Is there adequate segregation of duties in order to prevent one individual from solely completing a transaction? –This is very important in the area of cash handling/ revenue management and disbursements. Are employees cross-trained in order to allow for backup of another’s responsibilities? Does a “formal program or process to identify the continuing education or training needs of individual employees” exist?

Information Technology Has your unit completed the ISAAC (Information Security Assessment, Awareness, and Compliance) risk assessment as required by the Texas Administrative Code? How is access to computing systems controlled? –Formal process for granting or changing access to users –User access removed upon termination –Forced periodic password changes How is sensitive data stored and access to it controlled? Are your computing systems backed up periodically and are backups stored in an offsite location? Do you have a documented and approved disaster recovery plan on file? Has it been tested to see if it is reliable? How are computing assets safeguarded? Do you have a formal ongoing security awareness and training program to promote computer security issues?

Procard Procedures Do you maintain an updated list of all procurement cards in your department? Have primary users (not just cardholders) of the Procards been to disbursement training? How are the Procards secured? Is there a check out/in log for other users? How are the purchases from the Procards reconciled? Are transaction logs maintained as purchases are made and are reconciliations completed in a timely manner (within 30 days upon receipt of the monthly Bank of America statement)? What do you do when a receipt is given to you with tax or a card has been improperly used? Are there written procedures or guidelines for the use of Procards made readily available to the users? Have all unnecessary “house accounts” and credit cards with vendors been cancelled?

Cash Handling Are employees involved in cash handling knowledgeable of System Policy – Receipt, Custody, and Deposit of Revenues? How is revenue accepted in your unit? Are official pre-numbered receipts being issued to customers for each remittance received as required? Do you have a logging procedure for receiving checks? Are checks restrictively endorsed “ for deposit” immediately upon receipt? Is the transfer of custody of funds from one person to another documented during the receipt to deposit process?

Cash Handling - cont. Do you have a log for checking out receipt books to individuals in the department? How timely are deposits made? Remember the 3 business day or $200 each day rule. If a deposit is not immediately made, how are the funds kept secure? Are keys or combinations to a safe properly issued and maintained? How are deposits to FAMIS reconciled with your bookkeeping system and/or attendance lists? Are there viable alternatives to collecting cash in your unit?

Purchasing and Disbursements Are requisitions being prepared for purchases in excess of $5,000? Are “reasonably foreseeable” payments to one vendor exceeding $5,000 per year? Are large orders being split into smaller ones in order to circumvent the delegation of authority limit? Are prompt payment reports reviewed for possible inefficiencies in accounts payable? Are “good faith” efforts being made to utilize HUB vendors

Travel Procedures How are travel disbursements handled in your operation? Are all requests for foreign travel and Washington D.C. approved prior to the trip? Are travel advances given in your department? If so, how do you manage the repayment of the advance and how do you insure timely repayment?

Inventory Management Are all inventoried items tagged with a handwritten number (within 10 days after receipt) as well as a bar code sticker from FMS? Are serial numbers being input to FFX upon receipt of the property? How often are spot checks and/or updates made to your inventory? –Inventory management should not be a once-a-year project! How do you control the movement of items from one location to another? Is approved documentation on file for items checked out or located at employees’ homes or offsite locations? Do non-controlled items have a “Property of Texas A&M” sticker affixed? Is unused and unneeded equipment transferred to surplus in a timely manner?

Payroll If possible, do you have separate people preparing biweekly and monthly payroll submissions? Are timesheets submitted on a timely basis? Are corrections to timesheets properly notated in ink and initialed by the employee? Are checks distributed by someone other than the preparer of the payroll involved? Are payroll checks properly secured? Are timesheets for biweekly employees reconciled against leave records? Are terminated employees removed from the payroll system in a timely manner?

Leave Records How are leave records kept? (Manual vs. LeaveTraq) Does a separate individual periodically audit records? Is the leave recorder’s leave kept by a separate individual and associated records stored in a different location than all the other leave records? Is medical information stored in a separate file from the leave records? Are notifications of leave balances distributed to staff and faculty periodically? Do all leave records contain the proper administrative approvals? Are flex schedules properly documented and accounted for?

Account Reconciliation Do you have an internal bookkeeping system and if so, how are the entries from that system reconciled with FAMIS accounting statements? Are all account reconciliations current? Are account reconciliations periodically reviewed by someone other than the preparer? Who prepares the account reconciliations and is there adequate segregation of duties so that the person reconciling an account is not also preparing transactions for that same account? Are unreconciled transactions taken care of in a timely fashion?

Performance Evaluations Are annual performance evaluations done on each employee within the required timeframe? Are probationary reviews being conducted as required? Do employees have a current job description in their personnel file and is it reviewed by the employee and the supervisor during the performance evaluation process? Are the performance evaluations documented on the prescribed form or a Human Resources certified form? Are the evaluations complete and signed?

Audits: How to Prepare and What to Expect Council of Senior Business Administrators Focus Session April 21, 2004 James Laird Assistant Dean for Finance and Administration College of Science Phone: