UNIVERSITY OF CINCINNATI
Policy on Internal Controls

There are many internal control procedures in place within the Treasurer's Office and Internal Audit which provide University-wide oversight. However, the primary responsibility for the proper authorization of and correct accounting for transactions belongs to administrative unit heads.

Departmental policies and procedures should be clearly stated in writing and systematically organized into handbooks and manuals for use by staff members. Some of these administrative unit responsibilities include:

1. Divide responsibilities so that no one person controls all phases (initiates, approves, and reviews) of any transaction.
2. Coordinate procedures so that the work of one employee is automatically checked by another to ensure accuracy.
3. In light of Items 1 and 2, all check requests will need two original signatures (i.e., not a rubber stamp) before payment will be made.
4. Review of accounting and budget reports by persons responsible for administrative units in order to detect and/or report erroneous transactions.
   Special attention should be paid to salary payments because many University budgets consist primarily of salaries. Monthly ledger sheets and labor distribution reports should be reviewed by the administrative head. In addition, staff duties should be assigned so that processing of payroll data and distribution of payroll checks are segregated. Where these control functions are working properly, the chance of errors or misuse of funds can be detected earlier or deterred altogether.
   These policies and procedures are subject to review by Internal Audit or outside auditors.
5. Control access to cash, other assets, and disbursement documents to prevent or detect losses.

If you have questions regarding this policy, please call Internal Audit.