Audit Services

Helpful Hints

To assist departments in establishing and maintaining standard business practices and internal controls, Audit Services has provided some Helpful Hints or best practices based on frequent findings in past internal audits. These Helpful Hints are based on existing University policies and are not all inclusive. Departments are encouraged to review all business processes/procedures to identify risks and establish effective controls to mitigate those risks and to be familiar with the University of Guelph's Policies, Procedures and Guidelines.

Petty Cash

Petty Cash is a liquid asset that can easily be misappropriated if adequate controls are not established. For more information please refer to the official Petty Cash Policy and Petty Cash Procedure.
The following best practices should be established:

Given the liquidity of petty cash and the availability of a procurement card, departments should ensure there truly is a need for a petty cash fund (a number of small purchases or staff reimbursements which would be more costly or inefficient to process by cheque requisition, travel and business expense claim form or through use of a procurement card).
Petty cash should only be used for small dollar reimbursements, where individual purchases may be no greater than $100.
Petty cash should be maintained in a secure location (e.g., strong box or safe) and one employee should be responsible for the fund.
Petty cash may not be used for payment of salaries or wages, and never for employee IOUs.
A petty cash log, detailed petty cash vouchers (PCV’s) and receipts, must be kept for all purchases.
The petty cash log should always be balanced e.g., total cash and receipts should always equal the petty cash fund balance.
Replenishment of the petty cash fund is done through a Petty Cash Station Replenishment Envelope, approved by the Dean, Director, Chair or Department Head. Petty cash must not be replenished with miscellaneous departmental cash receipts.
Normally, petty cash funds should not exceed $500.

Cash Receipts

Cash receipts (cash, cheques, credit cards) are subject to misappropriation if there are not adequate controls. For more information see Control of Revenue by University Departments
The following best practices should be established:

Try to minimize cash handling by using the bookstore to sell course-related material.
Duties should be segregated so that the person receiving the cash and preparing the deposit is not also responsible for updating accounts receivable records or reconciling the deposit to cash receipt records (cash logs, cash register tapes, pre-numbered receipts, etc.).
All donations/gifts should be sent to Alumni Affairs and Development for deposit and issuance of a charitable receipt.
Cash receipts should always be recorded as revenue or recoveries, if it is an occasional minor reimbursement (e.g. employee reimbursement for long distance charges) it may be recorded against the object code in which the expense was incurred.
Cash should be stored in a safe location, with limited employee access, until it is deposited (e.g. strong box, safe).
All cheques should be made payable to the University of Guelph.

Using the Revenue Remittance Voucher (RRV), cash receipts should be deposited on a timely basis with the cashier at Treasury Operations. Cash and negotiable instruments greater than $500 should be deposited daily with Treasury Operations. Departments with less than $500 should not hold amounts in their department for more than one week. If the amount of cash is greater than $500, the depositor must be escorted to Treasury Operations by another individual.

Departments may never open an external bank account for deposit of departmental funds.

Travel and Business Expense Claims

The University provides reimbursement of reasonable expenses for University-approved travel and business expenditures. For more information please refer to the official travel and reimbursement policies – Travel and Business Reimbursement Policy
The following best practices should be established:

The individual traveling is responsible for making the most economical travel arrangements possible.
Travel and Business Expense claims may be reimbursed only by submitting a properly completed and approved Travel and Business Claim form using the UofG Expense Claim System
Travel claims must be approved by the next highest level of authority (e.g. Deans approve claims by Department Heads).
Details regarding the business purpose of the trip, the destination and dates must be noted.
Reimbursement for hospitality or entertainment expenses must include the names and organization of the persons entertained.
Original boarding passes must be submitted for flight reimbursement, along with e-ticket or invoice noting method of payment.
First class or business class air travel is not permitted without prior written approval of the Dean or Vice President.
Travel claims should be submitted within 30 days of completion of travel.
All expenditures must be supported by original invoice or receipt – credit card slips or statements are not acceptable proof on their own (i.e. the original restaurant receipt or supplier invoice must also be included).
Reasonable out-of-pocket costs for meals will be reimburses by submitting receipts for actual meal costs. The university will no longer allow a ‘per diem’ to be used for faculty and staff travel reimbursements. Original itemized and detailed meal receipt(s) are required. (Note: credit card receipt alone is unacceptable – the receipt must itemize the restaurant meal.) Taxes and gratuities are included as part of the meal receipt.
Alcohol cannot be claimed and will not be reimbursed as part of a travel or meal expense.
Missing receipt forms must be signed by the traveller and the approver if original receipts have been lost.
Additional restrictions apply for certain government funded programs including NSERC, SSHRC, CIHR, CRC, NCE.

Procurement Card

The University supplies faculty and staff with a U.S. Bank Visa Purchasing credit card on request. The intent is to provide a cost effective method of paying for small dollar transactions. For more information please refer to the official Procurement Card Policy
The following best practices should be established:

The procurement card should be kept in a safe location.
The procurement card should not be used for restricted transactions: Materials/services covered by Blanket Orders, Systems Contracts (unless otherwise indicated), or University Purchase Agreements, travel related expenditures, personal purchases, alcohol, animals or vertebrates.
Purchases may only be made by the individual to whom the card is issued.
Transactions must be $3,000 or less including currency exchange and all taxes. Splitting transactions for purchases larger than $3,000 is prohibited.
Transactions should be edited on US Bank’s website prior to posting to the general ledger to ensure the HST calculations and account codes are correct.
The printed cardholder statement must be reconciled monthly with original receipts/packing slips attached and signed by the cardholder. Where no activity has occurred in the month, a monthly statement should still be printed, signed, approved and filed.
The reconciled cardholder statement (with original receipts attached) must be approved by the person responsible for the account from which the payment is being made (usually the Department/Unit Head).
The approved cardholder statement, along with supporting receipts, must be maintained in the department for 7 years and is subject to audit at any time.

Expenditures

Every unit has the responsibility to ensure that university expenditures are appropriate and cost effective. Purchasing methods include Low Value Purchase Order (LVPO), Purchase Requisition (High Value purchases), Procurement Card or individual reimbursements through the Travel and Business Expense Claim Procedures. For more information see the Purchasing Policy
The following best practices should be established:

Goods and Non-Consulting Services

Total Order Value	Process Options	Competition Requirement	Minimum Level of Responsibility/Authority
Less than $3,000	Supply Managed Contract (SMC) University Procurement Card Low Value Purchase Order (LVPO) Supplier Order	Single quote, order conformation or documented confirmation. (Note: For efficiency, the preferred options are the University Procurement Card or SMC option)	Chair/Manager of Ordering Department (or authorized delegate)
$3,000 up to but not including $10,000	Supply Managed Contract (SMC) High Value Purchase Order (HVPO)	Single written quote obtained by the department, Purchasing Services or Purchasing Centre	Chair/Manager of Ordering Department (or authorized delegate) Procurement & Contracting Officer, Purchasing Services
$10,000 up to but not including $100,000	Supply Managed Contract (SMC) High Value Purchase Order (HVPO) Documented contract (specifying terms and conditions)	Invitational competitive procurement such as three written quotes or Request for Quotation (RFQ) made by the department, Purchasing Services or Purchasing Centre through invitation	Chair/Manager of Ordering Department (or authorized delegate) Procurement & Contracting Officer, Purchasing Services Single/Sole Source required approval from Assistant Manager, Procurement Operations
$100,000 or more	-Supply Managed Contract (SMC) - High Value Purchase Order (HVPO) - Documented contract (specifying terms and conditions)	Open competitive procurement such as Request for Proposal (RFP), Request for Quotation (RFQ) or Request for Tender (RFT) made through an electronic tendering system	-Chair/Manager of Ordering Department (or authorized delegate) - For orders up to $500,000, Assistant Manager, Procurement Operations - For orders up to $1,000,000, Manager, Purchasing Services - For orders up to $2,000,000, Director, Procurement Operations - For orders over $2,000,000, Assistant Vice-President, Finance and Services - Single/Sole Source requires approval from the Dean/Division Head and one level higher authority in Procurement

Consulting Services

Total Order Value	Process Options	Competition Requirement	Minimum Level of Responsibility/Authority
$0 up to but not including $100,000	High Value Purchase Order (HVPO) Documented contract (specifying terms and conditions)	Invitational or open competitive procurement such as three written quotes or Request for Proposal (RFP) made by the department or Purchasing Services either through invitation or through an electronic tendering system.	Chair/Manager of Ordering Department (or delegated authority) Procurement and Contracting Officer, Purchasing Services Single/Sole Source requires approval by the President
$100,000 or more	High Value Purchase Order (HVPO) Documented contract (specifying terms and conditions)	Open competitive procurement such as Request for Proposal (RFP) made through an electronic tendering system.	Chair/Manager of Ordering Department (or authorized delegate) For orders up to $500,000, Assistant Manager, Procurement Operations For orders up to $1,000,000, Manager, Purchasing Services For orders up to $2,000,000, Director, Procurement Operations For orders over $2,000,000, Assistant Vice-President Finance and Services Single/Sole Source required approval by Board of Governors

In the case of Tri-Council funding or other external funding sources where more specific authorizations, e.g. the approval by the principal investigators, are required by the funding sources, these authorities will apply.

For information on construction contracts, see Authorization and Commitment of Funds for Projects, Minor Alterations/Renovations and Similar Work.
To facilitate accurate university accounting of types of expenditures, ensure all expenditures are coded to the correct object code. Click here for a complete list of object codes.
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Independent Contractor vs Employee

Departments often employ consultants for contract work within the University. Determining the employment vs. non-employment relationship can be complex. If an employment relationship exists the University is liable for withholding taxes and source deductions (i.e. CPP, EI, etc.). Failure to do so exposes the University to fines & penalties. See the Relationship Questionnaire and Cheque Requisition Procedures for further details.
The following best practices should be established:

The Relationship Questionnaire must be completed prior to the start of the assignment/project to determine if an employee/employer relationship exists. This form must be signed by the chair or department head and the contractor to verify that an employee/employer relationship does not exist.
Where there is no employee-employer relationship, a completed Relationship Questionnaire form along with the contract for services and a cheque requisition should be forwarded to Accounts Payable (for amounts less than $3,000) or Purchasing Services for larger amounts.
For incorporated businesses, payments are made by purchase order submitted with the signed questionnaire to Purchasing Services with all applicable documentation (e.g. contract for services, GST registration number).
Prior to the selection of the service provider, competitive bids are required for non-consulting services where total fees are expected to exceed $10,000. For consulting services, competitive bids are always required (i.e.: irrespective of total value). See Purchasing Services requirements.
If the "consultant" is an employee of the University, normally, the payment should be made through the payroll system using an Employee Data Form. If you are unsure please contact Human Resources.

Account Reconciliation

Account reconciliation (the process of comparing the department's financial transactions to those in the general ledger) reduces the risk of inaccurate financial reporting.
The following best practices should be established:

Every month all account transactions per the monthly account statement should be reconciled (agreed) to the original document (cheque requisition, procurement card statement, salary requisition, travel claim, etc.).
Note that if a payment includes HST, the amount charged on the account will be less than the total invoice, as given the University HST rebate, most units are only charged 26.23% of the HST invoiced.
There should be documentation/evidence of monthly account reconciliation which should be reviewed and approved by unit/department managers.