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A.Concepts: <br />Theestablishmentandmaintenanceofasystemofinternalcontrolistheresponsibilityof <br />managementandshouldbeundercontinuousmonitoringandsupervision. <br />Accountingcontrolprovidesreasonable,butnotabsolute,assurancethattheobjectivesofthe <br />systemwillbemet. <br />thecompetenceandintegrityofpersonnel, <br />Underlyingeffectiveinternalcontrolsare <br />independenceintheirassignedfunction,andathoroughunderstandingofdefinedprocedures. <br />B.Elements: <br />Personnelwithclearlinesofauthorityandresponsibility <br />Adequatesegregationofduties <br />C.Objectives: <br />Adequatecontrolsovercashreceipts,cashdisbursementandpurchases,payroll,account <br />reconciliation,and <br />recordkeepingandreporting. <br />D.MonitoringInternalControls: <br />Onceestablished,existingfinancialcontrolsincludingthebasicelementsofsoundinternalcontrolare <br />continuouslymonitoredandassessedbymanagement.Managementmonitorsinternalcontrolsby <br />performingthefollowingfunctions: <br />Utilizeasystemofqualitycontroloverallprocessessuchassupervisoryreviews,approvals,and <br />automatedexceptionchecks; <br />Conductroutinereviewsofactualperformancecomparedtogoalsandbudgets; <br />Conductseparatemanagementreviewsofafunctiontodeterminewhetheritisworkingas <br />intended,orcontrolsneedtoberedesigned; <br />Arrangeforexternalauditsandberesponsivetofindings; <br />Continuousselfassessment,updateandrevisionofinternalcontrolpoliciesandprocedures. <br />Revisionstobebasedonselfassessment,recommendationsofexternalauditors,consultantsand <br />HUDdirectives; <br />Trackallcorrectiveactions,andensurethattheyareimplementedandworkingasintended; <br />Usemonitoringtotiecorrectiveactionsback <br />toimprovementsinControlEnvironmentand <br />ControlActivitystandards. <br />CITYOFSANMARCOSCDBGDRFINANCIALPOLICIES&PROCEDURESMANAUAL14|P <br />AGE <br /> <br />