Internal control is not just one action, but a series of actions designed to safeguard the assets of the university. This section of the Guide describes internal control activities that should be present within every department on the Boulder campus.

Records management at CU Boulder follows guidelines and schedules articulated by Colorado State Archives, directives issued by various state and federal agencies, and other authoritative entities. Information about the management of financial records at CU Boulder is contained in the Retention of University Records APS (APS #2006) and the Boulder Records Retention Schedule.

With respect to financial records associated with sponsored projects, retention requirements may differ depending on each sponsor’s regulations. It is the department’s responsibility to know the appropriate requirements for each award and follow the most restrictive. 

A word of caution about records: According to the Retention of University Records APS (APS #2006), no record shall be destroyed so long as it pertains to any pending legal case, claim, action or audit.

Contact CCO Fiscal Compliance if you have any questions about the records retention and disposition of finance records.

Getting source documents organized and placed into files (paper or digital) serves as the foundation for staying in control of departmental finances.

With a good filing system in place, answering questions such as, “How much money is available to spend on travel in a certain FOPPS?” or, “When will that equipment be delivered?” becomes a breeze.

The first step in getting organized is to set up a system that will provide convenient access to essential information. Source documents, invoices, receipts, financial statements and monthly reconciliations should each have a place to call home.

Digital vs. Paper

The web-based procurement systems employ digital document storage via scanning, faxing or emailing. Keep this in mind as you read through the recommended practices that follow. While the storage medium may differ, the importance of a sound, consistent set of procedures remains. Digital storage of source documentation is preferable in lieu of paper but be certain that digital documents are clearly readable before you discard the paper documentation that it represents. These electronic documents should be stored in a way that is accessible by others, in case of staff vacancy, turnover or other changes.

Note: Be aware that certain contracts or grants may require original receipts be retained for the period of the award. Check the award terms and conditions to be sure you are complying with these provisions.

The financial processes with which a department is typically involved include cash handling, journal entry preparation and budget journal preparation. Department staff must familiarize themselves with campus and university policies for each of these processes. Departmental procedures should be in place to administer each of these processes so that the assets of the university are safeguarded and reasonable assurance is provided that the university's objectives will be achieved. At a minimum, each procedure should incorporate the elements of proper authorization, segregation of duties and maintenance of documents and records. 

Note: Sound procedures, characterized by strong elements of internal control, should also be developed for all procurement and human resources processes within the department.

Proper Authorization

Authorization resides electronically within the Finance System. Each end user of the Finance System has a unique operator ID which is assigned a specific security profile that details the degree of system access available to the end user.

Segregation of Duties

Departmental procedures for administering financial processes should be designed so that the duties of one employee provide a crosscheck on the work of one or more other employees. Such procedures can prevent errors and provide prompt detection of irregularities in the performance of assigned tasks. For example, the responsibilities of executing a transaction, recording a transaction and maintaining custody of the assets resulting from the transaction should be assigned to different individuals. For more information about segregation of duties, refer to the APS 4014 Fiscal Roles and Responsibilities.

Maintenance of Documents

Documents, whether in electronic or paper format, provide evidence of the occurrence of the transaction and the conditions associated with the transaction. Documents detail the date, price, terms and description of the transaction. When properly authorized, documents also provide a basis for establishing responsibility for the execution and recording of transactions. For more information about records retention, refer to the Records Management in an earlier section of this chapter.

Sample Procedure

The Sample Procedure - Budget Journal Entry Process flowchart outlines a sample procedure for administering a financial process within a department. This particular example outlines a procedure for preparing an online Budget Journal Entry. It incorporates internal control elements of:

  • Proper authorization;
  • Segregation of duties; and
  • Maintenance of documents.

Due to the sensitive nature of working with cash, this topic is the focus of Chapter 10 of the Guide.

Daily or Ongoing Tasks

When deciding which items are high priority and which are low priority, keep in mind:

Process deadlines (e.g., What is the deadline for completing a journal entry or budget journal if it needs to post this month?); and

Turn around time required by certain university processes, (e.g., How much lead-time does the Procurement Service Center (PSC) need to generate a vendor check?).

Be aware of critical accounting, budgeting, purchasing or payroll deadlines on the horizon.

Monthly Tasks

Reconcile your source documents to the appropriate financial reports. Frequently used reports include the m-Fin Operating Summary, m-Fin Financial Statement Detail, m-Fin Outstanding Encumbrances or m-Fin Award reports. Refer to the Accounting Handbook chapter on Internal Controls for more information on Financial Report Review and Reconciliation. There are also various courses offered by the Office of the University Controller for Month-End Financial Close and m-Fin Reports.

Quarterly Tasks

Take an in-depth look at the financial activity in each FOPPS and at the financial position of each FOPPS.  For more information on FOPPS, refer to the Guide Chapter 5.

  • Look at the variance between available budget and year-to-date expenses, where appropriate:
    • For each account within the FOPPS
    • For the “bottom line” of the FOPPS
    • Typically, a variance of 10% or greater should be examined and explained.
  • Review the revenue and expense patterns in each individual FOPPS:
    • What was the status of each particular FOPPS at the end of the previous fiscal year?
      • Is the FOPPS on-target, over-spent, or under-spent for the current year?
  • Review balance sheet transactions
    • Is there sufficient cash available, particularly for auxiliary and gift FOPPS?
    • Are there company card or travel card transactions outstanding?  Reimbursement for personal charges might be pending or applied to an incorrect FOPPS.
    • Are there outstanding Travel Advances?

How do the actual revenue and expenditures for the FOPPS in the current fiscal year compare to the actual revenue and expenditures for the FOPPS during the same period of the previous fiscal year? Can you explain any significant differences?

Based upon the prior-year to current-year comparison:

  • Are there certain FOPPS that will likely be over-spent at the end of the year?
  • Are there other FOPPS that will likely come in under budget?
  • For FOPPS in Fund 10:
    • Should a budget adjustment be made?
    • If so, should the budget adjustment be temporary or continuing?
  • For FOPPS in Funds 20, 26, 28, 29, 34, 72 and 78:
    • Was the cash balance favorable at fiscal year-end for the prior year?
    • Is it sufficient to cover operations going forward?

The employee who is responsible for maintaining the department's financial records, doing the monthly reconciliation of the departmental FOPPS, and performing the quarterly monitoring of the financial statements must communicate information about the department's financial condition to department management.

For example, management must be informed if the revenue or expenditure pattern for the current fiscal year differs significantly from previous fiscal years. When faced with a financial variance from one year to the next, management may decide to take corrective action such as reallocating budget or reducing expenditures. Similarly, when analysis indicates evidence of an ongoing problem in a particular FOPPS, this information must be presented to management. It is management’s responsibility to take corrective action so that the financial objectives of the university can be achieved.

The Reporting System can be used by every employee who has a fiscal role at the university to generate online financial reports. You might be tempted to assume that the correct people are getting needed information and acting upon it. Ideally, this is true. However, if you notice anything unusual or that deserves a closer look, do not hesitate to bring this up to management. Be proactive—don’t assume that the problem was detected by someone else.

APS #4014 Fiscal Roles and Responsibilities identifies specific areas of responsibilities appropriate to the different fiscal roles: Officers, Fiscal Principals, and Fiscal Managers. The Policy Statement - Fiscal Responsibilities section describes the various duties of these roles and a list of situations that should be brought to the attention of the Officer, Fiscal Principal, or Fiscal Manager as appropriate.

The Boulder campus generates well over one billion dollars annually in operating revenues. The entire CU System generates around four billion dollars. Refer to the Annual Financial Reports, on the Office of the University Controller’s website for more information. For the Boulder campus, financial support comes from the following sources:

  • Gifts, grants, and contracts. Funding sources for this category of revenue include:
    • Federal Direct Lending Program;
    • Sponsored research and programs from federal, state, local, and private entities;
    • Federal student financial aid; and
    • Private gifts from non-governmental sources.
  • Tuition and fees.
  • State appropriated funding which includes:
    • State general fund support for current operations; and
    • State appropriated student financial aid
  • Auxiliary and other revenues.

With such a diverse funding base, there are several policies and regulations that govern university operations and the spending of university monies. Among these are:

Purchasing

All purchases must be made in accordance with the regulations established by the University of Colorado, State of Colorado and the Federal Government. These rules are designed to ensure accountability to the public and fairness to the vendors. Follow proper procurement procedures when buying goods and services for the university, and avoid after-the-fact purchases. Visit the Procurement Service Center (PSC) to become familiar with the purchasing and payable processes.

Travel

All travel associated with university business, whether foreign or domestic, must be conducted in accordance with university policy and procedures. Complete information is located at PSC Travel.

FOPPS Management

All employees who are responsible for the administration of university resources need to become familiar with higher education fund accounting concepts and the university’s Finance System. Visit CCO’s PeopleSoft Finance System Training for more information.

Sponsored Projects

All research institutes, most academic departments, and many other campus offices participate in sponsored projects. The area of sponsored project financial management can be particularly challenging because of the number and complexity of the associated federal, state and/or sponsor regulations. The Office of Contracts and Grants (OCG) administers the pre-award phase of a sponsored project.

CCO handles the post-award financial process. In conjunction with departments, institutes, and researchers, we:

  • Identify allowable and unallowable expenditures per OMB Uniform Guidance;
  • Administer the Personnel Effort Reporting System (ePERS); 
  • Prepare invoices and collect payments;
  • Submit financial reports; and 
  • Provide secondary approval for cost transfers

More information about this topic can be found in Chapter 14.

Campus Accounting

Campus Controller’s Office (CCO) customer support staff, also known as campus accountants, are assigned departmental liaison responsibilities according to the vice chancellor divisions and colleges of the Boulder campus. The campus accountants provide accounting expertise, internal controls, guidance and interpretation of CU's fiscal policies and procedures, and post-audit financial transaction management. They often serve as a department’s first point of contact when fiscal questions arise.