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University at Albany Internal Control Program
Employee TrainingInternal Control Officer: Steve Beditz
Internal Control Coordinator: Darri Scalzo
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Objective
Brief overview of internal controls - what they are and why we need them
Why Internal Controls?It is the LAW!
The NYS Governmental Accountability,
Audit and Internal Control Act of 1987• Also called the “Internal Control Act”• Made permanent in Chapter 510 of Laws of 1999• Requires all state agencies, including SUNY
campuses, to institute an internal control program
Why Internal Controls?It is the LAW!
The Division of Budget’s Budget Policy and
Reporting Manual Item B-350,
Governmental Internal Control and Internal
Audit Requirements• Requires all state agencies to perform certain internal
control responsibilities• Requires all state agencies to certify each year that they
are in compliance with these internal control requirements and the Internal Control Act.
History of Internal Controls at UAlbany
• Internal Control Program on campus since 1989, but not very far reaching in the late 1990’s and early 2000’s.
• Nearly found non-compliant in spring 2005• Program revamped, Steering Committee
appointed, action plan put into place as required by System Administration
• Currently in second phase of action plan – Employee training and internal control reviews
Definition of Internal Controls
Internal controls are the integration of the activities, plans, attitudes, policies, and efforts of the people of an organization working together to provide reasonable assurance that the organization will achieve its mission.
Examples of Internal Controls Used Every Day
• Separating duties among employees so that no one employee controls all aspects of any transaction or process
• Locking office doors each evening• Traffic lights and stop signs located at each
intersection• Painted signs or stickers on glass doors and
plate glass windows
In work environments, we use the term Internal Controls because:
• They are used to ensure that our internal operations work the way we want so that we accomplish what we want
• They are managed and used by people within the organization
• They are built into our work activities
Internal Controls help us to:• Operate effectively and efficiently - or in other
words to do the right things in the right way • Provide quality products and services• Ensure that we comply with all applicable laws,
regulations, policies, and contracts • Protect our assets and resources• Develop, maintain, use, and provide
data that is accurate and reliable
Internal Controls help protect us from risks - the things that could go
wrong and prevent us from accomplishing our goals
Internal Controls and Risk Management
• First we must identify our goals• Then we need to determine what could go wrong
in trying to achieve those goals - those things are Risks
• Next we decide how to manage those risks Implement internal controls to decrease the chance
that something will go wrong;
OR Live with the risk
Internal Controls - What we use to decrease risks and help make sure things happen the way we want
• People doing things • Things put into place by people
Internal Controls - What we use to decrease risks and help make sure things happen the way we want
• Preventive - stop unwanted events from happening
• Detective - identify unwanted events that have occurred
Examples of Internal Controls
Preventive• Segregation of duties -
dividing responsibilities so that no one person controls an entire activity and thereby could cause and conceal errors or fraud
• Safety procedures - precautions taken to help prevent accidents
Detective• Physical inventories -
inspect assets on hand and match to assets recorded in the books to detect any missing items
• Supervisory reviews - review of work performed to detect any errors
Why Internal Controls?Good Business Sense
• In order to succeed, an organization must manage its operations effectively
• Internal controls provide reasonable assurance that an organization meets established objectives and goals
• Internal controls decrease the risks to an organization
What if we do not have Effective Internal Controls?
• We could fail to meet our goals and objectives
• We might violate laws or regulations
• We may lose assets and/or opportunities
Can Things Really Go Wrong Here?
Unfortunately - Yes!
They can and have.
In the past few years, there have been a number of disciplinary and legal situations on campus that at their core involved a breach of internal controls.
Recent Examples of Internal Control Breaches at UAlbany
1. An employee falsely claimed to be going on a business trip and signed out a state vehicle for that trip. He actually went to visit family, and got into a car accident in the state vehicle. He attempted to cover it up but the vehicle was damaged and an investigation revealed there was no business purpose for the trip or vehicle use.
Recent Examples of Internal Control Breaches at UAlbany
2. An employee used a state vehicle to go off campus to dine without the knowledge or approval of his supervisor. The employee also did not use break time but rather stayed on the clock while dining off campus.
Recent Examples of Internal Control Breaches at UAlbany
3. State owned property and equipment is for official University business only. Several instances of inappropriate use of state assets have been uncovered, including use of fax machines and copiers to support a political candidate and use of laundry equipment for personal wash.
Recent Examples of Internal Control Breaches at UAlbany
4. Employees who are “on the clock” are expected to be working as they are being paid by the state to work. Several recent cases have arisen of employees being caught sleeping on the job either by other employees or by students.
Recent Examples of Internal Control Breaches at UAlbany
5. Employees are expected to be honest on their job applications, but supervisors must thoroughly check references and backgrounds before hiring an applicant. One employee checked on his application that he had never been convicted of a felony but then was overheard remarking that he had. An investigation revealed that he had in fact been convicted and falsified his application.
Recent Examples of Internal Control Breaches at UAlbany
6. Reports containing personal identifiable information for students were being left in recycling bins without any assurance or guarantee that the information was being shredded or properly secured before disposal.
Internal Controls are IMPORTANT
for every area of the University
• No matter how big or how small the department is
• No matter whether or not the department handles money
• No matter whether or not the department handles confidential information
Who has a role in Internal Controls?
Everyone!
Who is responsible for Internal Controls?
• Every employee has the responsibility to help ensure that internal controls are effective by following controls and reporting problems or suggesting improvements
• The greatest amount of responsibility rests with deans, department chairs, and managers to assure appropriate controls are in place for all operations
• The President has the ultimate responsibility, and must sign the annual certification that UAlbany is in compliance with the Internal Control Act
What can you do?
• Follow the policies and procedures in place for your job.
• Always lock the door when you leave.• Keep documents containing confidential or
sensitive data in secure files.• Shred documents containing
confidential or sensitive data when no longer needed.
What can you do?• Save files containing Personal Identifiable
Information on your departmental drive, not your PC’s hard drive.
• Do not share or post computer passwords.
• Always turn off your computer when you leave for the day.
• Use password-protected screensavers.
• Do not download any free items or software from the Internet.
What can you do?
• Communicate problems with current procedures or suggestions for improvement to your supervisor.
• Report any suspicious persons or activities to your supervisor, to the Internal Control Coordinator, or to the Internal Control Hotline.
Internal Control Program Contacts
Darri Scalzo, Internal Control Coordinator
Phone: 956-8092
E-mail: [email protected]
http://www.albany.edu/internalcontrol/
Other Important Contacts
Martin Manjak, Information Security OfficerPhone: 437-3813
E-mail: [email protected]://www.albany.edu/its/besecure.htm
Janet Thayer, Associate CounselPhone: 956-8050
E-mail: [email protected]
Internal Control Hotline
Confidential and anonymous means of
reporting observed or suspected wrongdoing,
maintained by the Office of Audit and Management Services.
437-4738
http://www.albany.edu/ichotline/
To provide an audit trail of who has received this state-required
Internal Control training, please click on the link below and complete the attached
form before closing this presentation.www.albany.edu/internalcontrol/ICTrainingRecord.shtml
Thank you for your participation!
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