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An essential function of every finance-related job on campus is to safeguard the assets of the university through the development and implementation of a solid structure of internal controls. Such a structure consists of policies and procedures designed to provide reasonable assurance that specific departmental and university objectives will be achieved.
Without an effective set of internal controls, the university may fail to attain its objectives for reasons such as:

• Fraud and waste;
• Losses resulting from fines and penalties due to non-compliance;
• Inadequate resources resulting from inefficient processes;
• Interruption of operations because of injury to personnel; or
• Ineffective communication that, in turn, results in misapplication of effort and resources

Each department must create and maintain a structure of internal controls. 

These controls may vary from one department to the next, because the specific internal control structure implemented for a given entity within the university will depend upon its size, the nature and complexity of its operations, and whether or not it is subject to requirements imposed by legislative or regulatory bodies.

After the internal control structure has been put into place, departmental employees must monitor the internal controls and offer suggestions for changes, if warranted. Internal controls exist in a dynamic environment. Employees retire, computer systems are upgraded and circumstances arise which may necessitate modifications to internal controls. Through continual monitoring of its internal control structure, the university can react quickly and effectively to changing conditions.

Some Final Thoughts About Internal Controls

Internal controls are more than a set of policies and procedures. Internal controls provide reasonable assurance to the university leaders regarding risk in operations, financial reporting and compliance with regulations. 
At the heart of the internal control structure and across all levels of the university is our staff. Every employee interfaces with internal controls during the course of their work and, therefore, plays a critical role in mitigating risk for the university, safeguarding the university’s assets and ensuring that the university has every opportunity to successfully achieve its objectives.

If you are the person responsible for departmental finances, you play a key role in making sure that your departmental operations and finances are guided by a sound set of internal controls. Contact your campus accountant for assistance in developing or evaluating the internal control structure of your department.