SEPARATION OF FINANCIAL ADMINISTRATIVE DUTIES
Effective: July 1, 2003
Revised: July 1, 2004
Departmental management has a responsibility to assure that financial administrative duties indicate clear lines of authority and responsibility. These duties are to be separated so that one individual's work routinely serves as a compensating check on another's work. No one individual should have complete control over a financial transaction. Standards for separation of duties are to be implemented to the maximum degree possible.
When full separation of duties is considered not practical or feasible, (i.e. due to limited departmental staff) the variance from the standard and appropriate compensating controls must be discussed with the dean or department head and the college or division business officer.
The departmental procurement/payment duties should be assigned to responsible staff so there is an adequate separation of duties.
A procurement/payment transaction consists of the following actions, initiation of the purchase, receipt of goods/services, preparation of the payment voucher, authorization of the voucher and reconciliation of month-end reports.
A description of these actions follow-
- Initiation of the purchase - Goods and services should only be ordered when the request has been approved by a departmental authority or their designee. Ideally, the items requested should be documented in writing or electronically and may have a preauthorized chartfield distribution to avoid communication issues.
- Receipt of goods/services - The receiving duty requires a written or an electronic affirmation or knowledge that the delivery of goods or services provided are complete. Ideally, the receiving duty should be independent of the ordering responsibility.
- Preparation of the payment voucher - Processing a payment document in the CUBS system is accomplished by using a Direct Purchase Voucher, Travel Voucher, Purchase Order Voucher, or a Purchasing Card Distribution. A payment voucher is not to be processed without supporting documentation (invoice or receipt and an acknowledgement of receipt of goods/or services) and authorization of the transaction (budgetary approval to charge specific chartfield distribution(s) and approval to pay).
- Authorization of the voucher - The Dean or Division administrative officer, may delegate budgetary approval to a business officer or a departmental employee. The designated officials, when approving an order or payment, are certifying that the funds are available from the budgeted chartfield distribution and that the procurements/payments are in compliance with established policies and procedures of Clemson University. An expenditure may be authorized when the purchase is initiated or at the time the request for payment is placed. Ideally, the purchase authorization is documented with either an approval signature or electronic approval.
When a transaction is entered in the CUBS system, the individual entering the transaction is assumed to be the designated official for authorization unless the transaction documentation indicates that responsibility for the transaction is assigned to another individual.
When an employee is being reimbursed for business expenses, the employee should not enter and release a voucher for payment to himself or herself. The reimbursement transaction must have a supervisory or supervisory designee written approval and be released for payment by someone other than the employee.
- Reconciliation of Month-End Reports - Departmental expenditure transactions are to be reviewed monthly to help assure the validity of financial transactions by comparing supporting documents to the transactions listed on the monthly status reports. Individuals assigned responsibility for performing these reviews should be independent of the expenditure transaction process. Where complete separation of duties and responsibilities is not feasible, the reconciliation should be reviewed and approved. The review and approval of the reconciliation is the responsibility of the department head or their documented designee.