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Policy: Internal Control 


Date: 07/14/09 Policy ID: FIN-021 Status: Final

Policy Type: University
   
Contact Office: Comptroller (Office of the University)
   
Oversight Executive: Executive Vice President and Chief Operating Officer
   
Applies To: Academic Division, the Medical Center, and the College at Wise.
   
Table of Contents: 

Policy Statement
Procedures

   
Reason for Policy: The University of Virginia is committed to maintaining a strong system of internal control as a business best-practice.  This policy assists the University in complying with the Commonwealth of Virginia Agency Risk Management and Internal Control Standards (ARMICS).
   
Policy Summary: 
   
Definition of Terms in Statement:  Internal control: Organizational plans and procedures which are designed to:
  • Safeguard assets;
  • Verify the accuracy and reliability of accounting data and other management information;
  • Promote operational efficiency; and
  • Adhere to prescribed policies and compliance with federal and state regulations.
   
Policy Statement: 

All employees of the University must perform their duties in accordance with proper internal control as established by prescribed standards and principles or as set by the department or unit head (or designee). Any observed weaknesses in internal control must be brought to the attention of the University Comptroller immediately. Failure to adhere to the University's policies and procedures may be considered misconduct and may be subject to disciplinary action as provided in the applicable personnel policies.
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Department and unit heads are responsible for conducting their business activities in a manner consistent with good internal control. Individuals responsible for administering University funds and resources have duties which include but are not limited to:
  • Acting ethically and setting a tone within the organization for ethical conduct and integrity (see University Code of Ethics and Statement of Purpose.
  • Ensuring that University, School, Department, Unit, and Sponsor policies and procedures are available to and understood by those carrying out financial transactions.
  • Complying with University, Federal, State, Sponsor, and Donor terms, conditions and restrictions on the use of funds.
  • Granting or delegating financial authority carefully, with consideration for proper segregation of duties.
  • Ensuring that appropriate reviews and monitoring take place, including a timely review of operating reports and performance indicators.
  • Complying with the University’s policy on Reconciling Departmental Accounting Records.
  • Clearly communicating expectations and holding individuals accountable for their actions when viewing institutional records or processing transactions.
  • Communicating institutional information (e.g., financial reporting, performance metrics, etc.) properly and in a timely manner, and granting access to financial information only for appropriate business uses.
  • Protecting assets, including data, equipment, supplies, inventory, and cash from unauthorized access or theft.
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The University Comptroller is responsible for the promulgation of policies and procedures directed toward the establishment of good internal control.

The University's internal auditors, in their periodic reviews of departments and activities, will review the system of internal control and make recommendations for improvements.
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Procedures: 

Procedure 1-1, "How to Maintain a Proper System of Internal Control"
Procedure 1-2, “Completing the Internal Controls Questionnaire”

   
Related Information: 

Reporting Fraudulent Transactions
Records Management
Managing Petty Cash Funds
Managing Petty Checking Accounts
Managing Change Funds
Receiving Goods and Services and Timely Disbursements of University Funds
Policy II.E.4, “Controlling Cash Items”
Policy V.A.1, “Revenue Generating Activities”
Policy V.B.1, “Cashiering Activities”
Policy V.B.2, “Credit and Collection”
Policy VII.C.2, “Types of Purchases Requiring Special Processing”
Policy X.A.1, “Maintenance of Equipment Inventory”
Policy X.F.1, “Surplus Property Disposal”
Policy XV.A.1, “Conflict of Interests”
Medical Center Policy 0217 Compliance Auditing and Monitoring Program
Medical Center Policy 0283 Behavioral Code of Conduct
See also the University's Code of Ethics
See also the Board of Visitors resolution Audit Charter
See also Employee Policies maintained by Human Resources
See also the State’s Standard of Conduct Policy
See also the Gramm Leach Bliley Act
See also the COSO Internal Control - Integrated Framework
See also the ARMICS Standards issued by the Department of Accounts

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Policy Background: 
   
Major Category: Finance and Business Operations
   
Category Cross Reference: 
   
   
Process: 
   
Next Scheduled Review: 07/14/12
   
Approved By, Date: Policy Review Committee, 07/14/09
   
Revision History: Previous version in effect 2/24/04 to 7/13/09.
   
Supersedes (previous policy):  Internal Controls I.A.1