Difference between revisions of "Standard 7.C"
Revision as of 14:39, 1 February 2007
The financial organization and management, as well as the system of reporting, ensure the integrity of institutional finances, create appropriate control mechanisms, and provide a basis for sound financial decision-making.
7.C.1 The president reports regularly to the governing board about the financial adequacy and stability of the institution.
7.C.2 Financial functions are centralized and are under a single qualified financial officer responsible to the president. Institutional business functions are under one or more qualified officers, are well organized, and function effectively. The complexity of the usiness organization reflects the size of the institution and the significance of its transactions.
7.C.3 All expenditures and income from whatever source, and the administration of scholarships, grants in aid, loans, and student employment, are fully controlled by the institution and are included in its regular planning, budgeting, accounting, and auditing procedures.
7.C.4 The institution has clearly defined and implemented policies regarding cash management and investments which have been approved by the governing board.
7.C.5 The institution’s accounting system follows generally accepted principles of accounting.
7.C.6 For independent institutions, the governing board is responsible for the selection of an auditing firm and receives the annual audit report.
7.C.7 Independent institutions are audited annually by an independent certified public accountant and the audit is conducted in accordance with generally accepted auditing standards. The audit includes a management letter. A summary of the latest audited financial statement is made available to the public.
7.C.8 A proprietary institution makes available annually a financial summary which includes, as a minimum, a list of company officers, a statement of profit and loss, expenditures, indebtedness, and companies which have a controlling interest in the institution.
7.C.9 If public institutions are, by law, audited by a state agency, an independent audit is not required except for any funds not subject to governmental audit.
7.C.10 All funds for financial aid and other specific programs not subject to governmental audit are audited annually by an independent certified public accountant and include a management letter.
7.C.11 The institution demonstrates a well-organized program of internal audit (where appropriate) and control that complements the accounting system and the external audit.
7.C.12 The institution demonstrates that recommendations in the auditor’s management letter accompanying the audit report have been adequately considered.
7.C.13 Federal, state, external, and internal audit reports are made available for examination as part of any evaluation conducted by the Northwest Commission on Colleges and Universities.