Fiscal Control and Internal Auditing Act Certification

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Asset Management

Item 1: Changes, transfers, and deletions of assets are recorded promptly in unit equipment inventory records.

Custodial responsibilities for property control require that a unit develop a process to alert property accounting about new equipment purchases, changes to equipment location, custodian, condition, anticipated transfers and disposals.

Resource: Comply with Unit Head Property Custodial Responsibilities
OBFS Policies and Procedures Manual, 12.2.3 Comply with Unit Head Property Custodial Responsibilities

Item 2: University property control decals are promptly affixed to equipment as required by University guidelines.

The State Property Control Act requires all University-owned property to display identification.

Resource: Affix Property Labels
OBFS Policies and Procedures Manual, 12.1.6 Affix Property Labels

Item 3: If scheduled for completion during the past year, the unit has conducted its equipment inventory in accordance with University guidelines and submitted required reports to the Property Control Office.

University and state regulations require each unit to complete and certify a physical inventory of University equipment at least once every two years.

Resource: Complete a Biennial Inventory
OBFS Policies and Procedures Manual, 12.2.1 Complete a Biennial Inventory

Item 4: The unit has completed a physical inventory of its merchandise for resale and reconciled the results with its financial record in accordance with established University policies and procedures. (Note: This control applies only to units that sell merchandise to customers.)

Campus units must maintain appropriate inventory control of each item of merchandise for resale. Proper periodic inventory procedures are necessary to ensure that counts match accounting records.

Resource: Conduct a Physical Inventory to Adjust Your Merchandise Inventory Record
OBFS Policies and Procedures Manual, 22 Self-Supporting/Revenue Generating Activities - Conduct a Physical Inventory to Adjust Your Merchandise Inventory Record

Item 5: University equipment has not been physically removed from campus for disposal or transfer prior to receiving authorized approval in compliance with University policies and procedures and State regulations.

No one is permitted to remove from the buildings and grounds any property belonging to the University unless all relevant policies and procedures are followed. This includes removal of property designated as recycling and applies to all unneeded equipment regardless of historical cost, tagging status, or inclusion in Banner Fixed Assets.

Resource: Transfers and Disposals for Property Accounting
OBFS Policies and Procedures Manual, 12 Property Accounting

Item 6: Cash under the control of the unit is managed in accordance with University policies and procedures established for cash controls.

In addition to establishing proper internal controls for units routinely handling cash as noted in the link below, unit heads must:

• Ensure their unit complies with University policies and procedures regarding cash handling.
• Establish and maintain written procedures that provide a clear accountability process for receiving, depositing, and protecting cash and checks.
• Provide supervision and training for all their staff assigned responsibility for cash handling.

Resource: Cash Handing
OBFS Policies and Procedures Manual, 10 Cash Handling

Item 7: Funds, property, and other assets and resources (including the University PCard and TCard) are safeguarded against waste, loss, unauthorized use, and misappropriation.

The following are general guidelines for safeguarding assets through systems of internal control:

• Assign responsibility and accountability for control of University assets to two or more employees (for example, responsibility for ordering, receiving, and inventorying assets should be separated so that the same employee does not have all these responsibilities).
• Develop and distribute detailed unit operating procedures that are consistent with University policies.
• Regularly verify the continued maintenance of established controls and remedy violations through prompt, effective, and fair actions.

Resource: Employee Responsibilities for University Assets
OBFS Policies and Procedures Manual, 9 Audits, Internal Control, and Business System Security

Financial Management

Item 8: Accounting financial statements are reviewed each month and appropriate actions are initiated to reconcile transactions to unit records.

Reconciliation or verification of financial transactions is a key element of internal control and is fundamental to sound business practices. All transactions should be reviewed for appropriateness, accuracy and completeness. Procedures should be in place to ensure that financial information accurately reflects the unit's activity, identifies inaccuracies through the comparison of actuals to budget, and identifies balance deficits.

Resource: Understanding University Financial Statements and Reconciliation Process (GL 104) Lesson 3: The Reconciliation Process
GL 104 Training Guide

Item 9: Where applicable, remedial business plans  for clearing deficit balances have been submitted to the designated university budget office in accordance with University policy and procedure.

Units must submit remedial business plans if requested by their university budget office.

Resource: Overdrafts and Deficits: Remedial Business Plans
OBFS Policies and Procedures Manual, 1.3 Unit Financial Health

Item 10: Staff responsible for FOAPAL management understand the University policies related to the use of these funds.

Accounting reference materials are available related to the various funding sources, including allowable costs and other policies related to those funds.

Resource: Accounting Reference Materials
UAFR Reference Materials

Item 11: There is a process in the unit for the review of FOAPALs to ensure they have been properly used.

Reconciliation or verification of financial transactions is a key element of internal controls and is fundamental to sound business practices. The business manager or person who has financial responsibility must verify all financial transactions on a timely basis (monthly or on an ongoing basis during the month).

Resource: Monthly Reconciliation and FOAPAL String Discrepancy Reports
FOAPAL String Discrepancy Reports (Rogue FOAPAL Reports)

Item 12: Self-supported FOAPALs have been reviewed to determine that they are used only for the purpose originally stated and that the continued use of the FOAPAL is warranted.

Revenue from unit sales of goods and/or services is credited only to self-supporting accounts created for a specific purpose as authorized by the University at the time the fund was created.

Resource: Determine the Need for a Self-Supporting Fund
OBFS Policies and Procedures Manual, 22 Self-Supporting/Revenue Generating Activities - Determine the Need for a Self-Supporting Fund

Resource: Monitor a Self-Supporting Fund
OBFS Policies and Procedures Manual, 22 Self-Supporting/Revenue Generating Activities - Monitor a Self-Supporting Fund

Item 13: Faculty and staff have been made aware of the rules and regulations for the use of sponsored research funds under their control.

The unit is aware of and complies with all regulations, policies, guidelines and requirements, as they relate to the application, acceptance and use of sponsored research funds.

Resource: Grants and Sponsored Projects Administration
Grants & Sponsored Projects

Item 14: All expenditures, including payroll expenses, incurred under a sponsored research agreement in unit are reviewed for allowability by the principal investigator or another individual with suitable means of verification.

Responsible faculty and unit administrative staff should review grant expenditures on a monthly basis against Banner reports and source documents to verify all grant expenses have been properly recorded, are allowable, and have adequate supporting documentation. Responsible faculty and unit administrative staff have necessary access to financial reports to execute oversight duties.

Resource: Compensation for Personal Services Charged to Sponsored Projects
OBFS Policies and Procedures Manual, 16.1.3 Compensation for Personal Services Charged to Sponsored Projects

Resource: Allowability and Funding of Certain Expenditures
OBFS Policies and Procedures Manual, 8 Payments and Reimbursements

Item 15: The performance of subgrantees/subcontractees on sponsored research projects is monitored to ensure that they are meeting all terms and conditions of their subagreements.

Management should ensure that project costs incurred by subrecipients are reasonable and allowable. Monitoring the activities of subrecipients ensures awards are used for authorized purposes in compliance with laws, regulations, and provisions of contracts or grant agreements and that performance goals are achieved. These internal controls include a review of invoices for allowability:

• Verification that payments are consistent with the scope of work performed.
• An evaluation that all required information and deliverables, such as technical reports, have been received and are consistent with reporting requirements.
• Review of subrecipient invoices for consistency with sponsor requirements and terms of the agreement.

Resources: Sponsored Projects Administration
OBFS Policies and Procedures Manual, 16.1.5 Sponsored Projects Administration

Item 16: Management oversight is provided to ensure that gift funds under the control of the unit are used only for the purpose for which they are given.

University department and unit heads are responsible for ensuring the proper expenditure of gift funds in accordance with the intent of the donor. To help ensure that gift funds are used according to donor intent, it is important to have a copy of the donor agreement or other related documentation associated with the gift on hand as a reference.

Resource: Expenditure of Gift Funds
OBFS Policies and Procedures Manual, 11.10 Expenditure of Gift Funds

Item 17: Faculty and Staff responsible for University PCard and TCard use and management understand the University policies related to the use of these purchase instruments.

All employees who have a role for PCard must complete an online tutorial or attend an instructor-led training session on PCard policies, and pass an online certification quiz prior to being assigned their role(s) in the PCard software. All University employees who will be issued a TCard must complete training regarding TCard policies and pass a certification quiz. Additionally, individuals with a role in the Travel Expense Management (TEM) system are encouraged to complete this TCard training and quiz. All transactions are reviewed and reconciled in a timely manner with the original detailed itemized receipt, including the accounting C-FOAPAL used for each purpose. The unit/department head provides budgetary and compliance oversight for the unit's PCard and TCard.

Resource: The University PCard
OBFS Policies and Procedures Manual, 7.6 The University Purchasing Card (PCard)

Resource: Travel Card (TCard)
Travel Card (TCard)

Resource: Reconcile TCard Charges in TEM
OBFS Policies and Procedures Manual, 15.2.4 Reconcile TCard Charges in TEM

Item 18: Accounts receivable (and appropriate allowance for doubtful accounts) are promptly recorded when services are rendered or merchandise is sold, and unit accounts receivable records are reconciled to the general ledger on a monthly basis.

The revenue, income, receivable functions, and their associated operations consist of those business processes concerned with recording and controlling of amounts due to and received by the University from the sale of goods and services.

Resource: Revenue, Income and Receivables
OBFS Policies and Procedures Manual, 5 Receivables

Item 19: Encumbrances and costs incurred by my unit and resources available to my units are utilized efficiently, effectively, and in compliance with University policies, procedures, and guidelines.

Business practices of the unit must promote appropriate use and safeguarding of University resources. Sound practices include a continuous review or internal check of routine transactions. There should be a division of duties and responsibilities so no person has complete control over all aspects of a financial transaction. Internal control procedures promote effective and efficient use of unit resources.

Resource: Internal Control
OBFS Policies and Procedures Manual, 9 Audits, Internal Control, and Business System Security

Item 20: Revenues, expenditures, and transfers of assets, resources, or funds applicable to operations are properly recorded and accounted for.

Resource: Business Systems Access and Security
Accounting Reference Materials

Transactions and General

Item 21: Appropriate corrective action has been implemented to address any known significant fiscal/administrative control weaknesses impacting financial transactions processing or compliance with state or federal law/regulations. For corrective action that has not yet been fully implemented, the impact of such issues has been reflected in the responses to this FCIAA questionnaire. Indicators that such weaknesses have been identified in your unit include, but are not limited to, reports received from University Audits (internal audit), notifications provided by the Office of Business and Financial Services in connection with external audits by the State of Illinois Auditor General or reports provided by other external auditors or consultants.

Units can be made aware of internal control weakness or non-compliance with laws and regulations various ways, such as communications or reports from University Audits, from OBFS communications related to external audits conducted by the Illinois Office of the Auditor General, or results (draft or final) from external consulting or other audit engagements. Your responses, to the FCIAA questionnaire, should incorporate any corrective action not yet implemented to address any known internal control weaknesses or activities not in compliance with applicable laws or regulations.

Resource: Comply with Unit Head Responsibilities for Internal Control
OBFS Policies and Procedures Manual, 9.1.1 Unit Head Responsibilities for Internal Controls

Item 22: The unit has reviewed systems access and approval profiles for each employee to determine if they are appropriate. Accordingly, the unit has modified or removed an employee’s system access due to responsibility changes, job changes, or employment termination.

Timely removal of access due to changes in responsibilities, change in units, and termination is necessary to the safeguarding University assets and maintaining system integrity. USCs and other relevant unit staff are required to annually review employee job responsibilities in relation to system access.

University units must follow the standard access approval process that includes Unit Security Contacts (USC), Access Manager for My-UI-Financials, PI Portal access, the OBFS Finance Security Team, and Administrative Information Technology Services (AITS).

Resource: Business Systems Access and Security
OBFS Policies and Procedures Manual, 9.4 Business Financial Information

Item 23: Access to sensitive or confidential information is restricted to staff who utilize such information in the performance of their duties.

Anyone accessing University business information assumes a legal and ethical relationship (fiduciary responsibility) regarding that information. Access to such information should be used appropriately and restricted to conducting University business. Unit heads are responsible for the security of University data used by their unit.

Resource: Comply with Unit Head Responsibilities for Data Control
OBFS Policies and Procedures Manual, 9.4 Business Financial Information

Item 24: Unit staff members who have financial security and approval authority are aware of and accept the responsibility inherent in this authority.

University employees shall manage University assets so they are used only for authorized purposes, in accordance with all University rules, policies, and applicable law.

Resource: Employee Responsibilities for University Assets
OBFS Policies and Procedures Manual, 9 Audits, Internal Control, and Business System Security

Item 25: Professional service contracts are fully executed prior to services being rendered.

Professional Services are services provided under contract to the University by a business firm or individual acting as an independent contractor and qualified by education, experience and/or technical ability. Work must not begin in advance of the final and full execution of the contract.

Resource: Consultants and Other Contractors for Professional and Artistic Services
OBFS Policies and Procedures Manual, 17.1 Consultants and Other Contractors for Services

Item 26: University PCard and TCard transactions are reconciled on a timely basis and reviewed by appropriate management staff.

Authorized and timely review of PCard and TCard transactions is a required internal control procedure.

Resource: PCard Training Materials
Card Services Training Materials
Resource: Travel Card (TCard)
Travel Card (TCard)
Resource: Card Services Training Material
Card Services Training Materials

Item 27: Documentation for departmental PCard and TCard transactions is properly maintained and available to support the business purpose and to meet audit requirements.

Each PCard and TCard transaction must have supporting documentation detailing cost, business purpose, and unit approvals in accordance with University procurement policies, as well as with all applicable State and Federal statutes.

Resource: University PCard
OBFS Policies and Procedures Manual, 7.6 The University Purchasing Card (PCard)

Resource: Keeping Travel Records
OBFS Policies and Procedures Manual, 15 Travel - Keeping Travel Records

Item 28: 

Duties, responsibilities, and system access, within the unit, are properly segregated so there is appropriate review and approval of all transactions. (Adequate segregation of duties translates to no one person performing, having system access, to all the critical elements of initiating, processing, recording, and reconciling.)

Business practices of the unit must promote appropriate use and safeguarding of University resources. Sound practices include a continuous review or internal check of routine transactions. There should be a division of duties, responsibilities, and system access so no person has complete control over all aspects of a financial transaction.  For example, a single employee should not initiate purchases, perform the receiving function, and maintain the unit’s equipment records.

Resource: Internal Control

OBFS Policies and Procedures Manual, 9 Audits, Internal Control, and Business System Security

Item 29: Upper management of unit demonstrates an awareness of the statutes, rules, and guidelines governing their unit's financial activities.

A strong awareness by unit management of policies and statutes governing their unit's financial activities is an important internal control that helps ensure appropriate use and safeguarding of University resources.

Resource: University Policies
Policies & Guidelines

Item 30: Upper management of unit participates in key decision making including budgets, purchases of expensive goods and services, and the hiring and firing of key employees.

Upper management coordinates and supervises the administrative functions of the academic department, college, or administrative unit. Management involvement/oversight is essential to making informed decisions regarding the use of unit resources.

Resource: University Accounting and Financial Reporting
University Accounting & Financial Reporting

Item 31:

Lines of authority and responsibility are clearly understood throughout the unit and should promote segregation of duties. Clear lines of authority facilitate operations and provide accountability.

Clear lines of authority are established when the roles and responsibilities of each person in the organization are defined and documented.  Lines of authority should be designed to ensure proper checks and balances.

Resource: University Accounting and Financial Reporting
University Accounting & Financial Reporting

Item 32:University, campus and unit planning, policy and procedural manuals are used by unit management to communicate and define goals and objectives, and outline the methods to be followed by employees in achieving the goals and objectives. All employees have access to these materials.

It is important that unit employees know how to access all applicable policies and procedures.

Resource: Office of Business and Financial Policies
Policies and Procedures

Item 33: Unit personnel have appropriate access to reports needed to execute oversight duties. Reports are reviewed by upper management of the unit on a regular basis which summarize activities, programs, transactions, and financial status.

Review of management reports is an essential internal control, important to safeguarding unit resources and providing data necessary to informed decision making ensuring successful operations.

Resource: University Accounting and Financial Reporting
University Accounting & Financial Reporting

Item 34: A system is in place to provide management with explanations of significant variances between budgeted and actual revenues and expenses.

Performing variance analysis is a principal function of management. It is an important tool that can result in discovery of errors in recording transactions. It also can alert management to changing trends within their unit and/or alert them to operational issues that require immediate attention.

Resource: University Accounting and Financial Reporting
University Accounting & Financial Reporting

Last Updated: June 28, 2022