If a person who approves requisitions or negotiates contracts also reconciles the UFAS statements, an improper requisition submitted by that person or an inappropriate contract negotiated by that person might not be detected. University policy requires additional processes and approvals as the amount of the purchase increases. For example, approval of the Board of Trustees is required for certain purchases and purchases in excess of established dollar amounts. Procedures should be in place that provide assurance that a single purchase is not divided into multiple purchases to avoid the control afforded by these additional reviews and approvals. This segregation of duties helps ensure that no one person can misappropriate assets or improperly record or account for transactions without reasonable assurance of detection by another person.
Segregation of duties helps detect errors in a timely manner and deter improper activities.
The reason for not permitting the person who has temporary or permanent custody of an asset, or of documents that govern physical control of an asset, to account for that asset is to protect against the risk of conversion to personal use, covered up by falsified records. For similar reasons it is desirable, whenever possible, to prevent persons who authorize transactions from having control over the related assets. The results of the independent inspection should be communicated to the person who is responsible for authorizing payment for the goods received. This is generally done through the use of a signed receiving report. When unit personnel sign receiving reports or invoices, the implied representation is that the items indicated on the report or invoice have been received and all items received are as specified on the original order, are not damaged, meet the quality standards, and are otherwise acceptable.