Financial Controls Policy

Fact box

  • Policy owner: Vice President Operations
  • Policy category: Management: Finance
  • Policy status: Approved
  • Approval body: Council
  • Endorsement body: Executive Committee
  • Related policies:
  • Last amended: 11th Jan. 2018

Purpose

The purpose of this policy is to outline the internal control responsibility, objectives, principles and procedures for Alphacrucis College (AC).

Scope

Whole college

Policy

The AC administration has the responsibility to establish and maintain an adequate system of internal control and to furnish to the AC, governmental agencies, college creditors and other constituencies reliable financial information on a timely basis. This system promotes efficiency, minimizes risks of asset loss, helps ensure the reliability of financial information, and compliance with applicable laws, rules, and regulations.
 
Responsibility:
  1. AC Council is responsible for setting the institutional expectations for internal control, ensuring upward communications channels are open through all levels of management, and evaluating management’s effectiveness in monitoring the control environment and implementing sound control policies and procedures;
  2. individuals with delegated approval authority are responsible for establishing, maintaining, and supporting a system of internal controls within their areas of responsibility and for creating the control environment that encourages compliance with College policies and procedures;
  3. AC Finance Department, headed by the Vice President Operations, has the primary responsibility for internal control over financial reporting and compliance with applicable laws, rules, and regulations;
  4. AC HR is responsible for internal controls over employee recruitment, hiring, separation, promotion, job classification, employee rights, and salary administration. The Human Resources Officer will make resources available to assist in administering this policy;
  5. external auditors are responsible for reviewing the adequacy of departmental and institutional internal controls and for reporting any weaknesses to the relevant supervisor and AC Council;
  6. all levels of internal control are subject to examination by external auditors who will report on the adequacy of internal controls over finance and compliance;
  7. department managers are responsible for prompt corrective action as directed by the VP Operations on all internal control findings and recommendations made by internal and external auditors. The audit process is completed only after managers receive the audit results and take action to correct internal control weaknesses, improve systems, or demonstrate that management action is not warranted; and
  8. staff in leadership positions have the responsibility to ensure that those who report to them have adequate knowledge, skills, and abilities to function within, and contribute to, an effective internal control environment. This includes providing access to appropriate training on topics relevant to their job responsibilities.
The Finance Department is responsible for the following measurable outcomes:
  1. reconciled bank statements;
  2. weekly/monthly enrolment monitoring;
  3. budgets reviewed and approved by Executive Committee and Council;
  4. monthly/quarterly Profit & Loss Statement and Balance Sheets;
  5. monthly/quarterly Budget vs Actual Reports; and
  6. audited Accounts presented to Council and Members.

Objectives:

The College administration will establish and maintain a system of internal controls that satisfies the AC objectives in the following categories:

  1. risks are identified and effectively managed;
  2. safeguarding AC assets;
  3. reliability and integrity of financial information;
  4. compliance with AC policies, plans, procedures, laws and regulations;
  5. economical and efficient use of College resources;
  6. meeting established objectives and goals for College operations and programs.

Principles

General internal control principles for campus units are:

  1. Separation of duties
    1. Duties are separated so that one person's work routinely serves as a check on another's work.
    2. No one person has complete control over more than one key function or activity (e.g., authorising, approving, certifying, disbursing, receiving, or reconciling).
  2. Authorisation and approval
    1. Proposed transactions are authorised when proper and consistent with College policy and the department's plans.
    2. Transactions are approved by the person who has delegated approval authority, which is usually delegated on the basis of special competency or knowledge.
  3. Custodial and security arrangements
    1. Responsibility for physical security/custody of College assets is separated from record keeping/accounting for those assets .
    2. Unauthorised access to College assets and institutional data is prevented.
  4. Timely and accurate review and reconciliation
    1. Accounting records and documents are examined by employees who have sufficient understanding of the College accounting and financial systems to verify that recorded transactions actually took place and were made in accordance with College policies and procedures.
    2. Accounting records and documentation are compared with College accounting system reports and financial statements to verify their reasonableness, accuracy, and completeness.
  5. The general internal control principles should be applied to all College operations, especially accounting records and reports, payroll, purchasing/ receiving/disbursement approval, equipment and supply inventories, cash receipts, petty cash, billing and accounts receivable.

Evaluations

All campus systems, processes, operations, functions, and activities are subject to evaluations of internal control systems.

Information and Communication

Information must be timely and communicated in a manner that enables people to carry out their responsibilities.

  1. when a new budgetary unit, activity or project is established, the VP Operations will provide notification to the appropriate parties of the responsibilities incumbent on them;
  2. AC staff will communicate significant information to the College’s administration; and
  3. AC will communicate effectively with relevant stakeholders.

All levels of management must assess the costs, benefits, and risks when designing controls to develop a positive control environment and compensate for the risks of non-compliance, loss of assets, or unreliable reporting while accomplishing the College mission.

Responsible for implementation

Vice President Operations

Key stakeholders

All staff and students


Procedures

Financial Controls Procedure

Procedure for Measurable Outcomes

 

Previous day’s bank statement reviewed, posted

Accountant to Accounts Team

Daily

Monday

PayPal weekly activity downloaded for posting

Accountant to Accounts Team

Weekly

Friday

Bank Position (cash flow control)

Accountant to produce for VP Operations

Weekly

Feb/Mar

Jul/Aug

Monitoring of enrolments

VP Operations to EC

Weekly

       

15th Every Month

Profit & Loss

Accountant to provide to VP Operations

Monthly

15th Every Month

Balance Sheet

Accountant to provide to VP Operations

Monthly

Every Month

Profit & Loss and Balance Sheet presented

VP Operations to provide to EC

Monthly

 

Monitoring of enrolments

VP Operations to provide to EC

Monthly

       
 

Monitoring of enrolments

VP Operations and Council

Quarterly

Dec/Mar/Jun/Sep

Quarterly Profit & Loss

Accountant to provide to VP Operations

Quarterly

Dec/Mar/Jun/Sep

Quarterly Balance Sheet

Accountant to provide to VP Operations

Quarterly

Feb/May/Aug/Nov

Quarterly Cash Flow

VP Operations to provide to Council

Quarterly

Feb/May/Aug/Nov

Quarterly Profit & Loss, Balance Sheet and Cash Flow Approval

Council

Quarterly

       

Semester Census Dates

Review Budgets against projected enrolments

VP Operations

Bi-Annually

June, December

Internal procedure review

VP Operations & CIO

Bi-Annually

       

January

TAS Certificates

VP Operations

Yearly

January

Register of Staff Reviews

Human Resources Officer

Yearly

28th February

Yearly P&L and Balance Sheet prepared for Auditors

VP Operations, Accountant

Yearly

14th April

Audited Accounts

Auditors

Yearly

May

Audited Accounts approved

Council & Members

Yearly

Sept / Oct

Review Budget

VP Operations & EC in consultation with Deans of Faculty and Department Heads

Yearly

30th October

Final Budget Paper

VP Operations, EC, Budget Committee, Deans of Faculty and Department Heads

Yearly

November

Budget Recommendation

VP Operations and EC

Yearly

November

Revised Budget Approval

Council

Yearly