ACHIEVING COMPLIANCE OBJECTIVES

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ACHIEVING COMPLIANCE OBJECTIVES

• Controllership Retreat
• October 22, 2002

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OBJECTIVE

• To achieve consensus on the answers to the
  following two questions related to compliance
  with financial policies and procedures
• Who assumes the responsibility?
• What is our methodology to achieve compliance?

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Guiding Principles

• Communicate Effectively
• Appropriate Restrictions
• Apply Consistently

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1. Communicate Effectively

• Understand internal control principles
• Teach internal control principles to others
• Focus on the issues, not the individual
• Maintain a calm temperament
• Do not make accusations
• Treat everyone with respect
• Listen carefully

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Appropriate Restrictions

• Keep the rules as simple as possible
• Maintain a proper balance between PROMOTE and
  PROTECT
• Provide adequate notification and opportunity to
  change
• Ensure that the consequence fits the violation

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3. Apply Consistently

• Treat everyone equitably
• Always do what you say you will do

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Discussion Questions

• 1. Who assumes the responsibility for
  compliance?
• Department Controllers and Administrators
• Financial Services
• Others

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Discussion Questions

• 2. What is our methodology to achieve
  compliance?
• Consistent
• Fair
• Flexible

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Case Study One Part A

• During the review of Professor As purchasing
  card transactions, it was noted that there were
  two 1,150 purchases on the same date. A closer
  examination revealed that Professor A had made a
  single purchase for 2,300. In order to make the
  purchase without exceeding the 2,000 transaction
  limit on his purchasing card, he had the merchant
  split the purchase into two invoices for 1,150
  each, and then process the invoices as separate
  transactions.

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Case Study One Part B

• Two months after the previous incident, the same
  Professor A made another purchase for 2,600.
  Again, Professor A had the merchant split the
  purchase into two invoices for 1,300 each.
  Instead of processing both invoices on his
  purchasing card, he processed the first invoice
  on his card and had his colleague, Professor B,
  process the second invoice on his card.

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Case Study Two

• Professor C has numerous small purchases totaling
  about 500 per month. He uses his personal
  credit card for the purchases and every few weeks
  submits the receipts to his department and asks
  for a reimbursement. The department issues an
  LPD if the total is less than 500 and sends a
  check requisition request to A/P for amounts over
  500.

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Case Study Three

• A department issues LPDs to the same vendor for
  translation services in the amount of 500 each
  on six different days in May (May 10, May 14, May
  17, May 21, May 24, and May 28)for a total of
  3,000.

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Case Study Four Employee Xavier Smith
has turned in to you for reimbursement the
following receipt

• ABC RESTAURANT
• Dinners 153.85
• Tip 50.00
• Total 203.85
• Explanation Smith, Jones and
• Johnson and spousesbusiness
• dinner

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Case Study Five Professor D has
turned in this receipt to you for
reimbursement

• Daves Chevron Gas
• 15.4 gal _at_1.429 22.01
• Explanation Fill up Departmental car