You may have heard of the term internal controls, but what exactly are they? One text book definition is as follows.
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Internal control comprises the plan of organization and all of the coordinate methods adopted within a business to safeguard its assets, check the accuracy and reliability of its accounting data, promote operational efficiency, and encourage adherence to prescribed managerial policies. This definition recognizes that a system of internal control extends beyond those matters which relate directly to the functions of the accounting and financial departments.
At the State University College at Brockport, Internal Controls are everyone's business! The objectives of our Internal Control Program can best be described in one word, CARES, as an acronym for:
- Compliance with applicable laws and policies
- Accomplishment of the campus' mission
- Relevant and reliable data
- Estrong>conomical and efficient use of resources
- Safeguard Assets
Genrally, controls of two types:
- Preventative Controls: that are designed to discourage errors or irregularities from occurring (ie., processing vouchers only after signatures have been obtained from appropriate personnel), and
- Detective Controls: that are designed to find errors or irregularities after they have occurred (ie., reviewing departmental phone bills for personal calls).
Who is responsible for internal controls?
The auditors, right? Wrong! Everyone plays a part in SUNY Brockport's internal control system. Ultimately, it is SUNY Brockport's management's responsibility to ensure that controls are in place. That responsibility is delegated to each area of operation. Consequently, every employee has some responsibility for making this internal control system function. Therefore, all employees need to be aware of the concept and purpose of internal controls.