the municipal secretary desktop reference manual - Southwestern ...

C. MUNICIPAL INTERNAL CONTROL POLICIES AND PROCEDURES
A system of internal controls consists of measures used by a municipal government (or
any institution for that matter) for the purposes of:
! safeguarding a jurisdiction's resources from waste, fraud and abuse;
! promoting accuracy and reliability in a jurisdiction's accounting and operating data;
! judging the effectiveness and efficiency of the jurisdiction's operations; and
! ensuring a jurisdiction's compliance with applicable procedures and laws.
The control measures within the system are of two types:
! administrative controls which are concerned with procedures and records that are
used to ensure that management decisions are being properly executed and that the
municipality's objectives are being fulfilled; and
! accounting controls which encompass procedures and processes concerned with
safeguarding a municipality's assets and the reliability of its financial records.
The types of procedures and records which are considered as administrative control are
those which deal with such matters as the:
! acquisition or disposition of assets;
! investment of assets;
! administration of personnel program; and
! existence and use of performance measures.
Accounting controls are concerned procedures involving the authorization of
expenditures, recording of economic transactions, access to assets and asset accountability and
comparability.
An important consideration in the development of an internal control system is one of
balance. The cost of the control system must be weighed-balanced against the benefits gained
from its existence. If an imbalance exists, the functioning of the organization would be
adversely affected.
The materials which are a part of these comments include a resolution for implementing
an internal control system and a “framework” which can be used to develop accounting controls.
The appropriate administrative controls (e.g. purchasing plans, personnel systems and
administrative codes) are provided in other sections.
I-9