APM 2.25.55 Segregation of Duties

APM 2.25.55.01 Segregation of Duties – Sponsored Programs

Focuses on Compliance requirements for Sponsored Programs Supplements the requirements from APM 2.25.55— Segregation of Duties

Discusses the role of the PI to ensure only allowable and allocable costs are charged to an award

Segregation of Duties

Senior administration is responsible to ensure segregation of duties.Provides two benefits:

Mitigates risk of fraudDetection of errors or irregularities

Optimally, no person should have responsibility to complete two or more phases of a transaction or process.

• Authorization• Recording• Verification• Custody of assets• Managerial review

When less than optimal segregation exists, compensating controls must be in place.Compensating controls include:• More detailed reviews• Monthly managerial review Suggested documentation to print and review:

Income Statement orBudget Variance Report, ANDTransaction ChecklistDocumented with signature and dateFor other options, discuss with your Accounting

Office• Share resources with other departments

Authorization Recording Verification Managerial Review

1 2 3 Mgr

• Four people are involved• Each performs unique function• PS Security/Access precludes crossover of functions• Optimal segregation - managerial review can be quarterly

Optimal Segregation

Authorization Recording Verification Managerial Review

1 2 Mgr Not needed

• Three people are involved• Detailed verification is performed by Manager• Authorization, recording and verification are separated• PS Security/Access enforces segregation• Good segregation - Manager is performing the detailed verification

Good Segregation

Authorization Recording Verification Managerial Review

1 2 2 Mgr

•Three people are involved•Recording and verification are not separated•Managerial review is performed monthly•Managerial review is more detailed

Checking Own Work

Authorization Recording Verification Managerial Review

Mgr 2 2 Mgr

• Two people are involved• Recording and verification are not separated• DETAILED managerial review will be performed monthly

Manager Authorizes

Authorization Recording Verification Managerial Review

1 1 1 Mgr

• Least preferred and should be avoided• Only two people are involved • One person controls the entire transaction• DETAILED managerial review will be performed monthly

To Be Avoided Segregation

Authorization Recording Verification Managerial Review

Mgr Mgr Mgr Mgr

• This scenario represents an unacceptable risk and is not allowed• Unacceptable whether a Manager or any level personnel

Unacceptable Segregation

Authorization Recording Verification PI (Managerial) Review

PI 1 PI PI

•In less than optimal circumstances, a PI may perform all 3 functions (authorization, verification, managerial review) •PI cannot authorize (approve) his/her own reimbursements•Verification and Managerial Review can be done concurrently if both done by the PI•Recording must be segregated

Exception to

Segregation

Segregation of Duties-Sponsored Activity

The PI’s role includes:Ultimate responsibility for an awardAbility to delegate authorization

PI cannot delegate responsibility for awardPI cannot delegate managerial review

• Managerial Review completed Monthly

Link to training presentations-- http://www.umsystem.edu/ums/departments/fa/controller/compliance/training.shtml#online

Link to policies—

Information

http://www.umsystem.edu/ums/departments/fa/controller/accountingservices/manual/

OSP Training Schedule (Location: Havener Center—2008 Missouri Rm. 2009 Meramec Rm.) November 4, 2008 9:00 AM – 10:00 AM Disallowed CostsDecember 2, 2008 9:00 AM – 10:00 AM Disallowed CostsJanuary 6, 2009 9:00 AM – 10:00 AM TBAMarch 3, 2009 9:00 AM – 10:00 AM TBAMay 5, 2009 9:00 AM – 10:00 AM TBAJune 2, 2009 9:00 AM – 10:00 AM TBAJuly 7, 2009 9:00 AM – 10:00 AM TBASeptember 1, 2009 9:00 AM – 10:00 AM TBAOctober 6, 2009 9:00 AM – 10:00 AM TBANovember 3, 2009 9:00 AM – 10:00 AM TBA December 1, 2009 9:00 AM – 10:00 AM TBA

System Training Schedule (Location: Havener Center—St. Pat’s) January 29, 2009 9:00 AM – 10:30 AM and 1:30 PM – 3:00 PM EVR’sApril 7, 2009 9:00 AM – 10:30 AM and 1:30 PM – 3:00 PM AllowabilityAugust 4, 2009 9:00 AM – 10:30 AM and 1:30 PM – 3:00 PM Cost Transfers