Arrangements for financial management vary within organization and project depending on the financial risks involved. The University department should customize control procedures that specifically apply to the organization or project to guide both staff engaged in financial management of individual projects and staff as a whole.
This process should involve the Chief Administrative Officer (CAO) and the Principal Investigator (PI) of individual projects, who should exercise judgment in; establishing control systems, developing accountability mechanisms and making provision for audits. The CAO should draw upon the assistance of its internal and external accounting teams, assisted by central administrators to develop a set of appropriate specific procedures for operations.
Procedures for internal controls are planned and organized to provide reasonable assurance that the organization's risks have been managed effectively and that the organization’s goals and objectives will be achieved efficiently and economically. Internal controls should be cost effective such that the cost of a control should not exceed the benefit to be derived from it, but should add value, be proactive, and decrease risk of errors, omissions, and fraud. Internal controls ensure that:
→ Transactions are properly recorded and accounted for to permit the preparation of reliable financial statements, maintain accountability over assets, and demonstrate compliance with laws and regulations;
→ Transactions are executed on time and in compliance with laws, regulations, and the provisions of contracts, gift or grant agreements; and
→ Funds, property, and other assets are safeguarded against loss from unauthorized use, theft, or disposition.