Management is responsible for establishing internal controls.  In order to maintain effective internal controls, management should:

1. Maintain adequate policies and procedures;
2. Communicate these policies and procedures; and
3. Monitor compliance with policies and practices.

Responsibilities of management include, planning, organizing, directing and controlling. Controlling, including monitoring, is a process to ensure what is supposed to be done is being done. Control activities are the policies and procedures, which help ensure that management directives are carried out and include, but are not limited to the following:

• Authorizations – Transactions must be authorized and executed in accordance with management’s intent.
• Segregation of Duties – Segregation of duties is adequate when no one person is in a position to initiate and conceal errors and/or irregularities in the normal course of their duties.
• Record Keeping – Adequate record keeping ensures that assets are properly controlled and transactions are properly recorded as to account, amount and period.
• Safeguarding – Limiting access to and controlling the use of assets and records are ways to safeguard those assets and records.
• Reconciliations – Reconciliations are independent verifications, which help to ensure that the other four control activities are functioning as intended.

Remember, if you are at a staff level position and you know there is a problem, bring it to your management’s attention. If you are at a management level position, and you are aware of a problem, then as management you are responsible for correcting the issue.