1. GAP ANALYSIS & SUB-CERTIFICATION Internal Controls Overview

2. Annual Certification Process  Gap Analysis 1. Identify individuals who should be performing the gap analysis (FMT members to complete the overview spreadsheet). 2. Complete the M-Reports online gap analysis. 3. Document procedures / update existing procedures to include key controls noted in gap analysis.  Department Sub-Certification 1. Identify individuals who should be sub-certifying (both input and approval). 2. Complete the on-line sub-certification.  Management Oversight Reporting is an important part of the sub- Certification process.  Identify individuals who are running and reviewing the required reports. Annual Certification Process 2

3.  Should be completed with individuals involved in the process (i.e. handling cash, processing journal entries, hiring employees, etc.)  As of March 2013, all DSA units will be using the on-line tools in MReports, which is explained in detail in this document. Gap Analysis: 3

4. If you wish to look at the gap analysis tool, the instructions (quick version) below should get you there. However, if you want detail instructions, download the ITS online gap analysis tool with step-by-step instructions.ITS online gap analysis tool with step-by-step instructions 1.select Wolverine Access 2.go to the Faculty and Staff tab 3.select M-Reports (under the Reporting section) 4.choose the Compliance tab 5.select Internal Controls Other Reports / Tools, then Gap Analysis 6.select your dept. ID or put your dept. ID in the search box 7.in your department's row, click on the status link / "not started" to review and/or start filling out the questionnaire How to get to the Gap Analysis on-line tool http://www.finance.umich.edu/controls/certprocess http://www.finance.umich.edu/controls/certprocess 4

5. 5 Gap Analysis On-Line tool in M-Reports

6. What is written procedure documentation? Documented procedures = key control Clarify roles and responsibilities Ensure process is happening as intended Help with employee turnover (expected/unexpected) Note: The Office of Internal Controls website: http://www.finance.umich.edu/controls provides some guidance and sample documents to assist with documentation. 6

7.  Monitoring/oversight = key control  Helps to highlight if operating controls are working  Identifies trends/exceptions  High level summaries (by month/year, comparing to prior years, etc.) Concur Employment Cash & Credit Card Handling P-Card Are proper individuals approving expenses? Are spending levels and patterns appropriate? Has time been entered timely and properly approved? Are overtime, temp and retro pay reasonable? Have proper individuals taken cash handling training? Are credit card merchants PCI compliant? Are P-Card holders appropriate? Are credit limits appropriate compared to spend levels? Management Oversight Reporting 7

8. Listed in the matrix below are the (4) areas of Internal Controls - Management Reporting which are required ( and signed off on as part of the annual certification ) by all areas to review, and follow up, on a periodic basis in a timely manner, preferably monthly or quarterly. Source: Internal Control site (http://www.finance.umich.edu/controls/resources)ht p://www.finance.umich.edu/controls/resources) Internal Controls - Management Reporting ( included in annual certification ) Addl Comments EmploymentEmployment Depa rtmentEmployeeCompens a tionDepa rtmentEmployeeCompens a tion Thes e reports a re loca ted in MREPORTS i n the COMPLIANCE tab under the Interna l Control s menu. The Depa rtment Employee Compens a tion report provides a s umma ry of compens a tion i n forma tion for a n a dmi ni s tra tive depa rtment. The report i s orga ni zed by va ri ous types of pa y (e.g., regul a r pa y, overtime pa y, other pa y ). The Overtime Pa y, Temp Pa y a nd Retro Pa y a re trending reports a nd s how da ta for a funding depa rtment vi a gra phs a nd hi gh-l evel cha rts. Fa cul ty Pa y Review overtime, a ddl pa y...and fol l ow up a ccordi ngl y. (Monthl y / Qua rterl y) Staff Pa yStaff Pa y Overtime Pa yOvertime Pa y Temp Pa yTemp Pa y Retro Pa yRetro Pa y P-Card Tra vel & Expens e P-Ca rd Hol der & Li mi ts by DeptID, Dept Grp or Empl ID Report is loca ted in BUSINESS OBJECTS a t: UM-Ma i ntai ned -> Fi na nci a l s -> FN06 Procurement Lis ts a ll P-Ca rd holders, limits, a nd ma x, a vera ge a nd monthly s pend a mounts. Highlights potentia l underutilized ca rds. Review P-Ca rd limits... a nd a djus t a ccordi ngl y. Cash Handling (Cash/Checks) Ca s h Depos i t Control sReport is loca ted in MREPORTS i n the COMPLIANCE tab under the Interna l Control s menu. Summa rized by depos it a mount, depos it count a nd dis crepa ncy count for ea ch depos itory location. Management Reporting 8

9. Internal Controls - Management Reporting ( included in annual certification ) - continued Addl Comments Cash Handling (Credit Cards) For unusually high refunds ($ or %) and follow up accordingly. Follow up on any PCI non-compliance and / or dates close to expiration. Review approvers are appropiate and follow up accordingly. Follow up re: approvers training status if training was not completed or about to expire. Review and follow up on any unusual items noted. Credit Card Controls Report is located in MREPORTS in the COMPLIANCE tab under the Internal Controls menu. Summarized by net sales amount, sales count, refund amount and PCI compliance status for each credit card merchant account. Travel & Expense (Concur) Travel & Expense Approver Report by EmplID, DeptID or DeptGrp Report is located in BUSINESS OBJECTS at: UM-Maintained -> Financials -> FN06 Procurement Provides a listing of Concur approvers and the scope of what they have approved Notes approvers training completion status. Travel & Expense Spend Report by EmplID, DeptID or DeptGrp Report is located in BUSINESS OBJECTS at: UM-Maintained -> Financials -> FN06 Procurement Highlights spend (both P-Card & out-of-pocket) by Employee for a specified date range. Management Reporting 9