Definitions

Authorization: the process of reviewing and approving transactions or operations. Some examples are:

 Verifying cash collections and daily balancing reports.
Approving purchase requisitions or purchase orders.
Approving time sheets, payroll certifications, leave requests and cumulative leave records.
Approving change orders, computer system design or programming changes

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Custody: having access to or control over any physical asset such as cash, checks, equipment, supplies, or materials. Some examples are:

 Access to any funds through the collection of funds, or processing of payments.
Access to safes, lock boxes, file cabinets or other places where money, checks or other assets are stored.
Custodian of a petty cash or change fund.
Receiving any goods or services.
Maintaining inventories.
Handling or distributing paychecks/advices, limited purchase checks or other checks.

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Record Keeping: the process of creating and maintaining records of revenues, expenditures, inventories, and personnel transactions. These may be manual records or records maintained in automated computer systems. Some examples are:

 Preparing cash receipt back-ups or billings, purchase requisitions, payroll certifications, and leave records.
Entering charges or posting payments to an accounts receivable system.
Maintaining inventory records.

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Reconciliation: verifying the processing or recording of transactions to ensure that all transactions are valid, properly authorized and properly recorded on a timely basis. This includes following up on any differences or discrepancies identified. Examples are:

 Comparing billing documents to billing summaries.
Comparing funds collected to accounts receivable postings.
Comparing collections to deposits.
Performing surprise counts of funds.
Comparing payroll certifications to payroll summaries.
Performing physical inventory counts.
Comparing inventory changes to amounts purchased and sold.
Reconciling departmental records of revenue, expenditure, and payroll transactions to the PeopleSoft management reports.

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