Approved: July 31, 1996
Nomenclature changes: December 22, 2006
Accomplishment of the goals of the University requires effective management, including establishing and maintaining a system of "internal control". Broadly defined, internal control is as a process effected by the University's governing board, administration, faculty, and staff, to provide reasonable assurance regarding the achievement of the University's objectives in the following categories:
This definition reflects certain fundamental concepts. First, internal control is a process geared toward the achievement of objectives. It is a means to an end, not an end in itself. Second, internal control is effected by people. It is not merely policy manuals and forms, but people functioning at every level of the institution. Finally, internal control can be expected to provide reasonable, but not absolute, assurance that the University's operational, financial reporting, and compliance objectives are met.
Internal control consists of five interrelated components that are derived from basic University operations and administrative processes. The five components are:
Everyone at the University has responsibility for internal control. This responsibility extends beyond the development and implementation of control procedures initially considered necessary. The system of internal control must be under constant review by administrators and supervisors at all levels to determine that:
The President and Vice Presidents are responsible for establishment of the internal control structure and for communication of relevant information regarding policies and controls to administrative staff. Administrators at every level are responsible for managing their units consistent with the University policies and controls established.
Ultimate responsibility for establishing and maintaining adequate internal control rests with the President. The President shall: (1) consult with the President's Council in determining University policies necessary to establish an adequate internal control structure, and (2) periodically review and monitor compliance with internal control systems and take appropriate action concerning deviations from established policies and procedures.
The Vice President for Business Affairs shall be responsible for: (1) providing primary advice and direction in the development of controls related to financial reporting, (2) coordinating external audits and similar evaluations and (3) advising administrators as necessary regarding fiscal policies and procedures.
Vice Presidents shall have the responsibility for development, maintenance, and enforcement of effective control system policies and procedures within their areas.
The Director of Internal Auditing shall be responsible for periodic review of the internal control structure to determine whether adequate, effective internal controls exist and for calling deficiencies to the attention of appropriate administrators. Internal audit findings and recommendations shall be reported to the President, the appropriate Vice President, and other administrators, as necessary.
Each administrator and account manager shall be responsible for a knowledge of established internal controls, for operating their units in accordance with University policies and procedures, for the preparation of justifiable budget requests, for periodic reviews of their budgets, and for operating their units within the budgets provided.