In the context of internal controls, paper or electronic communication which supports the completion of the lifecycle of a transaction meets the criteria for documentation. Anything that provides evidence for a transaction, who has performed each action pertaining to a transaction, and the authority to perform such activities are all considered within the realm of documentation for these purposes.
Documents provide a financial record of each event or activity, and therefore ensure the accuracy and completeness of transactions. This includes expenses, revenues, inventories, personnel and other types of transactions. Proper documentation provides evidence of what has transpired as well as provides information for researching discrepancies.
Supporting documentation may come in paper or electronic form. In recent years, more often, official supporting documentation has moved from paper based to electronic forms. Keep in mind that in some instances electronic processing and approvals are the source documents for transactions.
Key Concepts and Best Practices:
|Format of source documents:
Well designed documents help ensure the proper recording of transactions. Consistent use of standard forms or templates should be considered whenever possible.
|The advance of online applications provides a fast and efficient method for accessing supporting documentation in a standard format. In other areas, wherever possible, the use of templates provides the same benefits. Consider creating templates for activities such as:
|University ownership of documents:
Documents used to support University business transactions are University property, not the personal property of employees.
|Whenever possible, do not allow employees to take University owned records home. If business needs require University records to be taken home, communicate to employees their responsibility to keep documents secure, particularly those containing personal information. This is particularly important to communicate to employees that have telecommuting agreements.
Changes made subsequent to approval of documents should be clear and concise.
|Use attachments or footnotes to document the reasons for corrections/adjustments to any records. Make the time/date and the approval of such corrections/adjustments clear and evident.
|Avoid duplicate processing:
Establish a method to avoid duplicate processing, especially in regards to transactions that result in payments to individuals such as payroll, petty cash and travel reimbursements.
|Build a check for duplicate payments into the processing and approval of payroll, petty cash and travel reimbursements.
Create an environment in which payroll, petty cash reimbursements and travel reimbursements are processed in a timely manner. Long delays in processing create opportunities for duplicate payments that go undiscovered.
Look closely at all late entries to watch for double submission of payments. (Example: late timecards, extremely late petty cash requests, travel expenses requested at a later time separate from the rest of the trip).
Retention policies exist for all types of supporting documentation. Always keep documents for the appropriate retention period and no longer.
|Establish a process for purging documents that have reached the end of their retention period. Document who, when and how each record type should be purged.
Be aware of record retention responsibilities. See Records Retention