Control Memo No. 4
April 1, 1998
To: Chief Fiscal Officers, Business Managers, Accounts Payable Managers
The monthly expenditure post audit analysis performed by the Comptroller"s Accounts Payable Division has detected numerous recurring areas of non-compliance common among many State agencies. The areas of non-compliance listed below are not in accordance with proper internal accounting controls and /or standards established in the agency's paperless processing Memorandum of Understanding.
1. CO-19 & CO-17 segregation of duties:
An individual who is authorized to sign (audit release) the Expenditure Batch Header (CO-19) must not be the same individual who signs and/or maintains the invoice (i.e. Invoice Voucher [CO-17], Prepayment Voucher [CO-17PRE], Petty Cash Replenishment [CO-17RPC]). A proper segregation of duties must exist between these two functions. In the preparation of petty cash expenditures, the petty cash custodian must not have duties related to both account reconciliation and authorization.
2. Checks Returned to Agency:
It is a fundamental accounting principal to distribute a check to the payee when generated. Usually this involves mailing the check directly from the Office of the Comptroller. However, returning vendor checks to an agency may be necessary in special circumstances as outlined below:
Special Code "14" must not be used for Petty Cash (PC) or Prepayment Voucher (PP). Document types PC and PP automatically default to Special Code "34" which are returned to the processing agency.
3. Required supporting documentation:
An expenditure transaction selected for a pre-audit or post-audit review by the Comptroller's Accounts Payable Division must be accompanied with the original documentation and the original Expenditure Batch Header (CO-19). Selected transactions will be held until the documentation is audited for legality, validity, propriety and completeness. Supporting documentation must include, but not limited to: receiving reports, vendor invoices, purchase orders, direct purchase orders, or personal service agreements, and copies of all remittance information issued to vendors (Remittance Statement [CO-894], Subscription Order [CO-780] and other supplementary documentation).
These documents must be forwarded to the Comptroller's Accounts Payable Division within 5 business days from the receipt of the request. The documents will be returned to the agency upon completion of the audit review.
4. Late filing of Claims:
Sections 4a-71, 4a-72 and 4a-73 of the Connecticut General Statutes states that interest shall be paid to certain vendors when the State fails to make timely payment.
It is essential the agency conduct a review of internal accounting controls to ensure that all payments for contractual obligations are made on a timely basis and that no additional costs are incurred by the State. Compliance with the above findings will provide integrity to the agency's accounts payable process and will result in fewer error detections in the monthly post audit reports.
Questions related to this control memorandum should be directed to the Comptroller's Accounts Payable Division Audit Section at (860) 702-3395 or (860) 702-3396.
Director - Accounts Payable Division
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