Developing Good Practice
There are a number of common themes that have been identified by the Internal Auditors through the internal audits.
The most common themes, together with good practice guidance, are:
Some examples of the common themes arising from internal audit reports involve a lack of formal procedures to control and monitor budgets within departments. Examples include:
- lack of evidence to support the authorisation of budget virements
- failure to retain documentation to support the monthly budget monitoring process for both the overall department and the individual teams/areas of activity
- lack of formal evidence of a monthly review being undertaken by the Head of Department and/or discussion at departmental management team meetings
- lack of evidence of reconciliations between the core financial system and any sub-systems used by departments
- failure to identify and explain variances
Guidance is available for departments in the form of a Financial and Budget Management Good Practice Guide which outlines processes and procedures that should be in place to facilitate effective budget management.
A departmental asset register is in effect an inventory of departmental furniture and equipment.
The common themes arising from the reports arise from risks in relation to the lack of controls over assets held by the individual departments and some specific examples of identified weaknesses include:
- additions and disposals to the register not being recorded on a timely basis
- lack of security marking
- lack of a regular verification of assets
The Financial Regulations relating to the value of assets above which an inventory must be maintained were amended in 2011 from £500 to £2000. However, Heads of Department may select a threshold value lower than £2000 for the recording of acquisition and disposal of assets if this is more appropriate for the nature of furniture and equipment held in their Department.Value is not the only consideration and portable and attractive items such as laptops, mobile phones and other electronic media may not be included in the threshold determined above and hence should be recorded in the Departmental Asset Register.
Full guidance on the recording and disposal of Departmental Assets can be found within the University’s Financial Regulations on Departmental Assets.
This theme covers instances where departments receive income for the sale of goods or services such as course materials and the sales of tickets for events. Examples of the common themes arising include:
- lack of records covering items sold and receipts issued
- weaknesses in security over the holding of cash
- lack of reconciliation of cash received to banking records
These requirements arise from the University’s compliance requirements with the “Provision and Use of Work Equipment Regulations (1998)” and “The University of Sheffield Health and Safety Code of Practice (part II)” which require departments to conduct a formal programme of maintenance, inspection and testing of portable electrical appliances.
Previous themes have been identified from the lack of preparation of a formal risk register by each department to assist them in managing identified risks.
The requirement for a departmental risk register is part of the annual planning round and these risks are reviewed by the Risk Review Group.
The risk management web site provides more information on the University’s risk management policy.
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Director of Finance