InternalControlEnvironment-UniversityofRochester.docVIP

Internal Control Objectives for Sponsored Program Awards The internal control environment encompasses the policies, processes and skills that exist within a department to ensure only valid financial transactions are recorded, that such transactions are recorded accurately, and that rules and regulations are complied with. Internal controls can be thought of as proactive measures to prevent inappropriate charges and to ensure compliance. Presented below are examples of control objectives and control techniques related to a sample of general types of transaction that are relevant to sponsored programs. Activities Allowed or Unallowed Allowable Costs/Cost Principles Control Objectives To provide reasonable assurance that Federal awards are expended only for allowable activities and that the cost of goods and services charged to Federal awards are allocable and in accordance with applicable cost principles. Control Techniques Reasonable budgets are submitted to the sponsor, reflective of the best estimate of total project costs, thus deterring a bias towards miscoding expenditures Department Chair does not tolerate circumstances of misuse of funds Administrative staff have a list of allowable and unallowable expenditures Computations are checked for accuracy Administrative and research staff have adequate knowledge of general and specific requirements applicable to the project Budget-to-actual comparisons are monitored Administrative staff attend training sessions Grant agreements and budgets, and OMB Circulars and sponsor guides are available to administrative staff Cash Management Control Objectives To provide reasonable assurance that the draw down of Federal cash is only for immediate needs Control Techniques Establish controls to ensure all valid charges are recorded as they occur and that invalid charges are not recorded Establish controls to monitor milestone achievement to bill sponsors timely Monitor milestone cash collection and follow up on long outstanding