Following Good Business Practices

One of the responsibilities of the department head is the management of financial resources to accomplish the mission of the department. The department head must manage the resources in conformance with University policies, good business practices, and the parameters of fund restrictions.

The department head must determine the appropriate balance between the need for control and the operating efficiency of the department. Part of this determination involves the delegation of signature authority. While signature authority may be delegated, budgetary responsibility remains a function of the department head.

Business activities should be designed so that no single employee will be responsible for all aspects of a transaction. For example, one individual ordering, approving the order, and receiving the goods would provide an opportunity for inappropriate transactions. Similarly, the department's monthly budget statements should be reviewed by an individual who does not approve vouchers and requisitions to provide a cross-check on the transactions posted to the department's accounts. This will limit opportunities to misappropriate assets and provide a deterrent to theft.

Employees such as department heads, business managers, and principal investigators responsible for account accuracy should:

• Ensure that monthly reports of account activity are reviewed to determine that all transactions are accurate and complete, and that adequate supporting documentation exists to substantiate all transactions;
• Verify that all entries made to each account are appropriate, comply with University policy, and are allowable based on the restrictions, if any, of the funding source; and
• Take corrective action to resolve inappropriate transactions posted to the account.

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