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Rod SmithIn the spirit of students returning to class, I encourage department leaders to take time out for a meaningful staff meeting that provides an opportunity for employees to learn. Calling a team meeting to discuss finance policies and procedures and the logic that governs these mandates helps create an environment where questions can be asked, accurate and consistent information can be shared, and the protocols can be understood and supported by the team – this, too, builds internal controls.

Often department leaders (especially business and accounting folks) meet and discuss topics and share the challenges they face in their departments. Ever so often, I am invited into their process. Recently, I visited with some folks in a team meeting and they shared concerns about policies that had just been introduced regarding the University Purchasing Card (P-Card). Questions arose and they needed help interpreting the policies, especially as certain points were being challenged by many of their staff. This is where a good old fashioned team meeting is so helpful, because the information can be covered in depth and real-life scenarios can be utilized to answer questions that help employees understand how the policies are interpreted and why they are written as they are.

While the discussion was good, there were key employees missing from the meeting, such as: the manager (who could help enforce the policy and point colleagues to resources), the colleagues who were asking the questions and needed to know the do’s and don’ts, and the person who was appointed to make the purchase. If they had been present, it would have made the time invested even more productive.

Well organized meetings allow for quality group discussions and ensure that correct, consistent and accurate information is shared – this too allows folks to feel like they are part of a team that supports the same mission and vision.  When teams discuss matters within their departments – this, too, enhances internal controls.

As a side note, I have a quick fraud story that is an example of how knowing internal controls procedures (such as counting and reconciling) makes all the difference:

Several years ago, a person that I know was having to do vegetation management on his farm.  This individual had 30 trees that needed to be cut on a 60-acre farm.  The goal was to give the younger trees a chance to grow and allow for green vegetation to spread and prevent runoff. This person contracted with a company to cut the timber and they were to split the proceeds 50%.  It seemed simple enough, right?  Well, when the farmer was due to receive his share of the profits, he noticed his portion was a little short.  He called the timber company and they denied the farmer was due any additional funds.  That was, until the farmer provided pictures of every tree stump and numbered the ones cut by the timber company.  You see, the timber company never anticipated that the farmer would reconcile his timber, especially since the 10 additional trees were cut in areas that were not easily accessed.  It just goes to show – it pays to count!

I love it when people know internal controls well enough that they naturally arise in their processes!  When folks know things well (as in this case, where the farmer knew his property well) the knowledge always creates a stronger and better internal control system.

To a great year of learning ahead!

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