Quick Reference Guide

​Internal Audit has documented the following miscellaneous procedures as a quick reference for departments. They represent university policies or best practices that Internal Audit believes will create good internal controls. This is not an all-inclusive list of all university procedures and, at any time, these procedures may change. Current policies and procedures can be found on the following websites: The Office of the Controller (https://www.cmich.edu/fas/fsr/OAC/Pages/default.aspx) Human Resources ( https://www.cmich.edu/fas/hr/Pages/default.aspx), Contracting and Purchasing Services (www.cmich.edu/fas/fsr/cps/pages/default.aspx), and General Counsel   (www.cmich.edu/office_president/general_counsel). If more detail is needed, contact the department listed or Internal Audit at extension 7082.


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Departments should contact Payable Accounting to obtain appropriate change fund authorization.  Once a change fund is established, a supervisor should periodically perform surprise cash counts to ensure the balance in the fund is always maintained. 
Though it is ideal to have revenue processed through the Student Account Services and University Billing, departments occasionally receive cash and checks directly from the payee. When this occurs, the following should be considered:
  1. Endorse checks immediately upon receipt. A proper endorsement includes "Central Michigan University" and "For Deposit Only" on the back of the check.
  2. Keep a cash receipts journal, a duplicate receipt copy or another suitable record when accepting payments.
  3. Retain cash receipts documentation in accordance with the records retention rules.
  4. Money collected should be kept in a secure location, such as a locked filing cabinet, locked box or safe. Keys or combinations should only be given to those employees that need them to perform their job responsibilities. Preferably, only two people (one serving as a backup) should have access to the keys or know the combinations. If an employee who has access to one of these devices leaves the employ of the department, keys should be returned and any combinations should be changed.
  5. If large sums of money are collected, deposits should be made frequently. Departments need to determine what amount they would be willing to put at risk when determining when a deposit should be made.
  6. The safety of employees who deliver deposits should be considered.
​​Suggestions for Cash Receipts

The department should establish written policies and procedures for processing cash receipts.

Internal control is a process effected by a college or university's governing board, administration, faculty and staff designed to provide reasonable assurance regarding the achievement of objectives in the following categories:

  • Cash receipts must be processed through Student Account Services and University Billing.
  • Checks received by the department should be listed by a person independent of any further processing of the check (see next item). This same person should immediately restrictively endorse the check "Central Michigan University" and "For deposit only" on the back of the check.
  • The department should establish a segregation of duties, so that the same person does not receive the cash/check, prepare the deposit for Student Account Services and University Billing and reconcile the deposit prepared for Student Account Services and University Billing to the account during the monthly reconciliation.
  • Cash and checks received by the department should be deposited with Student Account Services and University Billing as soon as possible (preferably daily, depending on the volume of receipts).
  • While in the department, cash and checks should be securely locked and access limited.
  • If money collected is from the sale of taxable items, the department should calculate the amount of tax and deposit that amount into a separate sales tax account.
  • Cash short/over amounts should be monitored.
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Compensatory Time

Please contact the Payroll office with specific questions and/or concerns.

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Contracting Authority

Anyone signing contracts must have the proper authority. The Office of the Vice President of Finance and Administrative Services maintains a list of all individuals who have been delegated the authority to sign contracts on the university's behalf. The list can be viewed on the Contracting and Purchasing Services web site. For more information, contact the Finance and Administrative Services office.


Please refer to Fixed Assets for questions and/or concerns.

If equipment is taken off campus on a long-term basis, Fixed Assets should be notified. See the Borrower's Agreement form that should be used for equipment taken off campus on a long-term basis. 

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Please refer to the Financial Planning & Budgets Office for detailed information.

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Please refer to the Office of Advancement for questions and/or concerns.

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Independent Contractor

An Independent Contractor Questionnaire must be completed and submitted to Employment and Compensation/HR before the service of an individual (i.e., sole proprietor) is considered for hiring as an independent contractor. It must be completed even in those cases where payment is to be made to a business name rather than to the individual. If it is determined that the individual qualifies as an independent contractor, then the department will receive a copy of an independent contractor agreement which should be completed, signed by an individual with contracting authority and submitted along with the copy of the questionnaire to Payable Accounting at the time payment is to be processed. The independent contractor information is available on the Contracting & Purchasing Services website. If it is determined that the individual should be processed as an employee rather than an independent contractor, then the necessary employment appointment forms should be processed through the normal channels. For additional information, see forms on the Employment and Compensation/HR web site. If the services are being provided by a business (a corporation or partnership), the normal procurement policies should be followed.

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For information, questions, and/or concerns, please  contact the Office of the Controller or visit their website section Credit Card.

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Reconciling the Department's Accounts

Ideally, the department's accounts should be reconciled within two weeks from the
month-end close dates. It is important that the accounts be reconciled to ensure that they accurately include authorized transactions. Each transaction, other than payroll and mailroom, should be supported by documentation. The payroll and mailroom entries should be reviewed for reasonableness. Reconciling the department's accounts provides a good internal control environment.

In addition to identifying unauthorized transactions, the reconciliation should include identification of transactions initiated by the department but not yet posted on the general ledger. Financial information should be adjusted to reflect pending transactions identified, thereby providing up-to-date financial information to be used in the monitoring of the availability of funds.

After completing the reconciliation, the statements along with the supporting documentation should be given to a second person for review. This review should be completed within a month. After the review, it is a good practice to initial the statements and file them with supporting documentation. For more information on the reconciliation process, see Suggestions for Expenditure Approval.

Suggestions for Expenditure Approval and Reconciliation

  • The department should establish policies for approval of expenditures.  For instance, in some departments the chair or director will approve all purchase requisitions and invoice vouchers.  In others, two levels of approval may be established; i.e., the assistant director can approve expenditures up to a certain amount but the director must approve anything over that amount.
  • the person who approves expenditures must have the authority to do so and the necessary knowledge to make informed decisions.
  • The department should establish segregation of duties, so that the same person who is authorized to approve expenditures is not also responsible for reconciling the department's accounts unless a second person reviews the reconciliation.
  • Detailed supporting documentation for all expenditures should be kept by the department and used to reconcile the expenditures recorded in the accounts.
  • The reconciliations of the accounts should be reviewed by the person who is responsible and  accountable for the account (usually the department head).
  • Reconciliations should be performed within two weeks from the month-end closing date so that any errors can be more easily investigated and corrected.
  • Employee reimbursement forms must be approved by someone who is administratively senior to the employee.
  • Specific guidelines for the use and record keeping associated with CMU business cards are available from Travel Services.

Record Retention 

Information Technology, General Counsel and Clarke Historical Library - overseers of the CMU archives - have partnered to construct a new CMU Record Retention Schedule that provides record management advice driven by current legal and compliance realities.  Thew new schedule and an FAQ can be found on the Record Management website

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Mailroom, phone, fax, and copier charges should be reviewed for reasonableness. Personal use of any university resources should be reimbursed.

All scholarships should be established through the Scholarships and Financial Aid Office. The scholarship accounts should be monitored by the department.

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Security Systems 

CMU Police should be informed of any security system installed on campus. Keys or codes should be given only to those employees who need them to perform their job responsibilities. However, at least two people (one serving as backup) should have the keys or codes. If an employee who knows the code or has a key to the security system leaves the employ of the department, the code should be changed or the key returned.

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Segregation of Duties

Though more difficult to accomplish in small departments, segregation of duties is possible in any office containing two or more people. Departments should review revenue, payroll, expenditure, and credit card processing to ensure adequate controls are in place. The following is a list of ideal processes that would provide adequate controls.

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  2. Payroll Processing: Please refer to Suggestions for Expenditure Approval and Reconciliation.

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  4. Credit Card Processing: The cardholder reconciles the monthly credit card statement to the supporting documentation. Someone other than the cardholder should review the reconciled statement with the supporting documentation.

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Transfer of Funds

Transfer of funds should be done according to procedures located at the Accounting Services website. 

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Per university policy, all Employee Reimbursement Forms must be approved by someone administratively senior to the individual seeking reimbursement. It is a good practice to have travel approved prior to the travel occurring in order to provide proper authorization over travel expenditures. For more information, contact Payroll and Travel Services.

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