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CITY OF SOUTH BEND, INDIANA <br />Principle 9: Management identifies, analyzes, and responds to significant changes that could <br />impact the internal control system. <br />The Finance Department, in coordination with Department Heads, will regularly evaluate and <br />adjust internal control policies in order to accommodate for the impact of future changes, including <br />but not limited to, personnel changes, newly elected officials, new programs, new technology, new <br />laws and regulations, and financial fluctuations. <br />COMPONENT THREE: CONTROL ACTIVITIES <br />Principle 10: Management designs control activities to achieve objectives and respond to <br />risks. <br />The Finance Department will establish and maintain a system of internal controls that satisfies the <br />City's objectives in the following categories: <br />1. Risks are identified and effectively managed <br />2. Safeguarding of City assets <br />3. Reliability and integrity of financial information <br />4. Compliance with City policy, plans, procedures, laws and regulations <br />5. Economical and efficient use of City resources <br />6. Meeting established objectives and goals for City operations and programs. <br />A. General internal control principles for Departments are: <br />1. Segregation of duties <br />a. Duties are separated so that one person's work routinely serves as a check <br />on another's work. <br />b. No one person has complete control over more than one key function or <br />activity (e.g., authorizing, approving, certifying, disbursing, receiving, or <br />reconciling). <br />2. Authorization and approval <br />a. Proposed transactions are authorized when proper and consistent with City <br />policy and the department's plans. <br />b. Transactions are approved by the person who has delegated approval <br />authority, which is usually delegated on the basis of special competency or <br />knowledge. <br />3. Custodial and security arrangements <br />a. Responsibility for physical security /custody of City assets is separated from <br />record keeping/accounting for those assets. <br />b. Unauthorized access to City assets and institutional data is prevented. <br />Internal Controls Policy Pursuant to I.C. 5- 11 -1 -27 5 <br />