Establishing Internal Control Standards and Establishing a Materiality Threshold

Home Browse Search

CITY OF SOUTH BEND, INDIANA 4. Timely and accurate review and reconciliation a. Departmental accounting records and documents are examined by employees who have sufficient understanding of the City accounting and financial systems to verify that recorded transactions actually took place and were made in accordance with City policies and procedures. b. Departmental accounting records and documentation are compared with City accounting system reports and financial statements to verify their reasonableness, accuracy, and completeness. 5. The general internal control principles should be applied to all departmental operations, especially accounting records and reports, payroll, purchasing /receiving /disbursement approval, equipment and supply inventories, cash receipts, petty cash and change funds, billing and accounts receivable. B. All City systems, processes, operations, functions, and activities are subject to evaluations of internal control systems. The results of these evaluations provide information regarding the City's overall system of control. C. Information and communication — Information must be timely and communicated in a manner that enables people to carry out their responsibilities. 1. All covered employees must be trained on Internal Controls according to Ind. Code § 5- 11- 1- 27(g). Covered employees are those employees who handle cash or have access to assets other than cash that are covered by this policy. All personnel must receive a clear message from the City's administration that control responsibilities are to be taken seriously. Failure to comply with established practices will subject individuals to the terms of disciplinary action or dismissal. 2. Employees must understand their own roles in the internal control system, as well as how individual activities relate to the work of others. To this end, whenever a new budgetary unit, financial activity, etc. is set up, the City Controller will provide notification to the appropriate parties of the responsibilities incumbent on them for good business practices and sound financial management, including reference to the principles within this policy. 3. Employees must have a means of communicating significant information to the City's administration. 4. The City must communicate effectively with external parties, such as auditors, creditors, contractors, suppliers, regulators and other stakeholders. D. Internal controls are meant to keep the City focused on achieving its mission while avoiding surprises. There is a balance between effective controls and mission accomplishment. Costs associated with internal controls should not exceed their benefit, Internal Controls Policy Pursuant to I.C. 5- 11 -1 -27 6