The accounting system provide for accumulating and recording expenditures by cost category shown in the approved budget. The organization maintain a policy manual covering a. approval authority for financial transactions and b. guidelines for controlling expenditures, such as purchasing requirements and travel authorizations. There are procedures governing the maintenance of accounting records. Subsidiary records for accounts payable, accounts receivable, etc., are balanced with control accounts on a regular basis. Journal entries are approved and explained or supported.
Accrual accounts provide adequate control over income and expense.
Accounting records and valuables are secured in limited-access areas. Duties are separated so that no one individual has complete authority over an entire financial transaction. Controls are in place to prevent expenditure of funds in excess of approved, budgeted amounts. For example, purchase requisitions are reviewed against remaining amount in budget category. The following conditions are indicative of satisfactory controls over cash receipts.