Guidelines on Segregation of Duties in International Outpost

Routine steps in procurement and validation are the same regardless of the number of employees in an office but, depending of the size of the operation, limited staffing in an international outpost can be a challenge to ensuring adequate segregation of financial duties. Although the University department in New York that supports that particular outpost will perform additional steps to ensure proper oversight and auditing, this does not negate the need for each outpost to have defined roles and responsibilities that demonstrate adequate segregation of duties. To this end, on the Segregation of Duties Matrix below, the outpost’s financial duties have been categorized into five roles (Source, Approve, Disburse, Validate, and Audit) with distinct responsibilities for each role within the different procurement and validation tasks:

Segregation of Duties Matrix Role Source Approve Disburse Validate Audit Task Solicit quotations from Approve vendor Disburse payme nts Validate the re ce ipt of 1) Audit quotations vendors selection/purchase goods 2) Audit financial reports

Purchase s Disburse payme nts Reconcile receipts to bank Audit financial re ports Checkbook stateme nts Disburse petty cas h 1) Count cash on hand and Unannounced periodic month's e nd audits to count cash and 2) Re concile receipts to validate receipts to log petty cash log Petty Cash Box Pre pare monthly Approve and s ubmit Reports re plenishment re plenishment to CU Receive cas h re ce ipts De posit to bank Reconcile receipt log to Pe riodically audit cash Cash Re ce ipts bank statement re ce ipts log 1) Goods re ce iver Inve ntory maintainer Pe riodically audit actual presents good to be validate s the amount materials on hand against looged into materials e ntere d into/removed the materials tracking inventory s ystem from the inventory system 2) Goods re mover re moves materials from M ate rials Tracking inventory for dis tribution

It is essential that the process of appointing individual responsibilities within a financial task ensures that the roles are separated out in a way that the validation and/or audit functions are performed by someone who was not intricately involved with the Sourcing, Approval, or Disbursement of that same task. Tasks should be split among different employees, so that one employee is responsible to validate a receipt of goods and a different employee then maintains the receipts’ log.

Conflict of interest could occur, when for example, the same person is assigned the responsibility of disbursing payments (Disburse) and also reconciling the bank statement to the receipts (Validate). If such a role assignment is unavoidable, the Audit function must be performed even more rigorously by a different employee.

of 3 Global Support (02-04-13) The following are suggested employee/role combinations for offices with small numbers of financial employees that would ensure adequate segregation of duties:

Office with 2 employees:

Field Office with 2 employees Role Source Approve Disburse Validate Audit Task Solicit quotations from Approve vendor Disburse payme nts Validate the re ce ipt of 1) Audit quotations vendors selection/purchase goods 2) Audit financial reports

Purchase s Disburse payme nts Reconcile receipts to bank Audit financial re ports Checkbook stateme nts Disburse petty cas h 1) Count cash on hand and Unannounced periodic month's e nd audits to count cash and 2) Re concile receipts to validate receipts to log petty cash log Petty Cash Box Pre pare monthly Approve and s ubmit Reports re plenishment re plenishment to CU Receive cas h re ce ipts De posit to bank Reconcile receipt log to Pe riodically audit cash Cash Re ce ipts bank statement re ce ipts log 1) Goods re ce iver Inve ntory maintainer Pe riodically audit actual presents good to be validate s the amount materials on hand against looged into materials e ntere d into/removed the materials tracking inventory s ystem from the inventory system 2) Goods re mover re moves materials from M ate rials Tracking inventory for dis tribution

Key : Employee 1 Employee 2

Office with 3 employees:

Field Office with 3 employees Role Source Approve Disburse Validate Audit Task Solicit quotations from Approve vendor Disburse payme nts Validate the re ce ipt of 1) Audit quotations vendors selection/purchase goods 2) Audit financial reports Validate the re ce ipt of goods Purchase s Disburse payme nts Reconcile receipts to bank Audit financial re ports Checkbook stateme nts Disburse petty cas h 1) Count cash on hand and Unannounced periodic month's e nd audits to count cash and 2) Re concile receipts to validate receipts to log petty cash log Petty Cash Box Pre pare monthly Approve and s ubmit Reports re plenishment re plenishment to CU Receive cas h re ce ipts De posit to bank Reconcile receipt log to Pe riodically audit cash Cash Re ce ipts bank statement re ce ipts log 1) Goods re ce iver Inve ntory maintainer Pe riodically audit actual presents good to be validate s the amount materials on hand against looged into materials e ntere d into/removed the materials tracking inventory s ystem from the inventory system 2) Goods re mover re moves materials from M ate rials Tracking inventory for dis tribution

Key : Employe e 1 Employee 3 Employe e 2

of 3 Global Support (02-04-13) Office with 4 employees:

Field Office with 4 employees Role Source Approve Disburse Validate Audit Task Solicit quotations from Approve vendor Disburse payme nts Validate the re ce ipt of 1) Audit quotations vendors selection/purchase goods 2) Audit financial reports Validate the re ce ipt of goods Purchase s Disburse payme nts Reconcile receipts to bank Audit financial re ports Checkbook stateme nts Disburse petty cas h 1) Count cash on hand and Unannounced periodic month's e nd audits to count cash and 2) Re concile receipts to validate receipts to log petty cash log Petty Cash Box Pre pare monthly Approve and s ubmit Reports re plenishment re plenishment to CU Receive cas h re ce ipts De posit to bank Reconcile receipt log to Pe riodically audit cash Cash Re ce ipts bank statement re ce ipts log 1) Goods re ce iver Inve ntory maintainer Pe riodically audit actual presents good to be validate s the amount materials on hand against looged into materials e ntere d into/removed the materials tracking inventory s ystem from the inventory system 2) Goods re mover re moves materials from M ate rials Tracking inventory for dis tribution

Key : Employe e 1 Employee 3 Employe e 2 Employee 4

of 3 Global Support (02-04-13)