Work-from-home mandates intended to stop the spread of the COVID-19 virus have many of us in uncharted territories, which is causing us to react and change the way our organizations operate. The coronavirus has forced many organizations to change the way they operate, but there are certain factors that should not be overlooked, such as segregation of duties while working remotely. With employees working remotely, many organizations are changing which employees are responsible for certain internal controls or how a particular control is performed.
As the COVID-19 pandemic continues to grow, we know that many of you have questions on how to best handle the disruptions to your organization, including maintaining strong internal controls and segregation of duties. The following is a list of some best practice recommendations to help with segregation of duties while working remotely.
- Have mail forwarded to an employee’s house (outside of the accounting department), similar to a front desk, to sort mail, scan and email copies of receipts to appropriate personnel. Assign someone else the responsibility to hold that employee accountable to email a daily deposit report to more than one individual.
- Consider how all approval processes will change for areas in which you aren’t currently using an online approval process. For example, this could include supervisors reviewing timecards or signing off and approving expense reimbursements or purchases.
- If you begin to switch from checks for cash disbursements to using bill.com or paying more electronically, ensure that the same controls you had over check disbursements are applied to electronic payments, via email or scanning evidence of approvals.
- Someone outside of the accounting department (such as the CEO or Board Treasurer) should thoroughly review online banking activity daily (or at least weekly), since segregation of duties is harder to accomplish while working remotely during this stay at home order. Consider pulling up certain disbursements and reviewing the scanned copy of the check. Inquire and follow up on anything that is unusual or unfamiliar.
- As payroll is normally every organization’s largest expense, develop a plan for processing and approving payroll in a remote environment. Consider requiring timesheets to be emailed to supervisors and having the supervisors email the HR Director with a list of all timesheets approved. Review and approval of pre-submittal and final payroll reports can also be done via email.
- Consider consulting with your investment adviser regarding your investment portfolio and any recommendation that they might have. Before making any changes, also discuss with the Board of Directors to see if your organization needs to change the investment policy in these difficult times.
- The Finance Committee and Board of Directors should continue to meet regularly (and virtually) to ensure their fiduciary oversight over the organization. Consider using available software such as GoTo Meeting or Zoom to hold these meetings. The Board Treasurer should hold the accounting staff accountable for continuing to produce monthly financial reports for the Board’s review on a timely basis.
Please remember that segregation of duties and strong internal controls are extremely important now more than ever with a majority of organizations having to change how they operate.