Question: My question is about the Student Store. We have the financial secretary who orders supplies, over sees the students in the student store, and is also the final audit for the cash received. I feel this could be a problem. Should the ASB Advisor be the one who is advising the students in the store?

Answer: Strong internal controls are incredibly important to provide reliable financial information, safeguard and preserve assets, and reduce the risk of fraud and abuse, just to name a few reasons. In addition, as we tried to stress yesterday, internal controls are also critical to protect the employees, students and volunteers who participate in ASB in case something "does go wrong". Reducing the risk for potential issues can assist people not being blamed if there are future problems…once that suspicion occurs, it is often difficult to prove that the person blamed is innocent if strong internal controls are not in place.

We would agree with your concern that the financial secretary is responsible for too many of the steps in the student store, causing a segregation of duties issue. Segregation of duties is most often a problem in the handling of associated student body (ASB) funds due to the limited amount of employees that are normally assigned to assist in this area. No single employee should handle a transaction from initiation to reconciliation. In addition, no single employee should have custody of an asset, such as cash or inventory, and also maintain the records for the related transactions.

Some of the things you could do to minimize the segregation of duties issue could include:

· Although the financial secretary is the individual ordering the supplies, by obtaining the prior required pre-approval by a student rep, the advisor and the principal, that is one control in place

· Someone other than the secretary should check the supplies in when they arrive

· Someone other than the secretary should authorize the invoice okay to pay’

· The financial secretary should not be the only one counting the final cash and making the deposit…dual counts is critical is any situation

· The financial secretary is hopefully not the person having to do the bank reconciliation if they are also doing the deposit. If they are responsible for it, someone must review and approve the reconciliation when it is done on a monthly basis

Your idea of having the ASB Advisor be the one advising the students in the store should occur, but not just because of segregation of duty issues. It really should be the advisor’s role to supervise the students, not the secretary as they don’t have the time, expertise in many cases, nor the oversight responsibility.