Internal Control Checklist

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The internal control process is used by board directors, management or personnel to measure objectives related to operational efficiency and effectiveness, consistency of reporting and fulfillment of statues, ordinances and applicable rules. An internal control checklist is used to review areas such as organizational assessment of risk, control activities and environment, communication, and monitoring of information technology. Managers use this information to identify areas for organizational improvement or identify new controls for implementation.

Control Environment

Control environment checklist assessment areas include staff familiarity with board, financial and accounting policies and procedures; adherence to the organizational code of ethics and core values; and communication, collaboration and team efforts related to the organizational mission and goals.

Measures of management effectiveness include receptiveness of executive staff regarding employee suggestions to improve productivity and service delivery; management training, skills and competencies; opportunities for ongoing professional development; and management commitment to the organizational mission, vision, values and goals.

Staff may be assessed regarding clarity of organizational reporting structures; accuracy of job descriptions; availability of resources and tools needed to achieve organizational goals; and familiarity with the business continuity plan.

Financial Reporting and Asset Management

An internal control checklist should also assess management and staff familiarity with organizational financial and accounting policies, procedures and standards. Assessment areas include whether staff have the accounting skills and competencies to fulfill their job duties; a review of financial transaction standards and generally accepted accounting principles; maintenance of general ledgers and accounts receivable; accuracy of revenue collection methods; compliance with asset management records and procedures; and a review of property inventory system and accountability mechanisms.

Human Resources and Payroll

Checklist items related to human resources and payroll operations include staff familiarity with payroll policies and procedures; effectiveness of staff recruitment and retention strategies; opportunities for staff to receive appropriate training; efficiency of time entry record keeping procedures; timely payment of employee salaries; and consistency of overtime and time in lieu procedures.

Human resource related functions include a review of administrative training opportunities for staff; development, implementation or monitoring of non-discriminatory hiring practices and employee performance reviews; systems for documenting employee training and work experience; effectiveness of employee orientation sessions; development of document storage and retention policies for personnel records, and employee leave and absence policies.

Financial Expenditures

Financial expenditure checklist items may include an assessment of requisition processing systems, invoices and purchase orders; quote selection review methods; and the process for approval of contract service provision.

Operational checklist items include the processing of vendor invoices and evaluation of vendor service delivery; methods of tracking services purchased; policies regarding employee travel reimbursement and advances; review of maintenance agreements; administration and reporting of the disbursement of contracts and grants; and a review of cost control procedures and expenditures.

Information Technology

An organizational assessment of information technology processes may include a review of staff familiarity with technology guidelines, policies, procedures and standards; monitoring or implementation of information technology risk assessments and business continuity planning; change management policies for operating systems and upgrades; system security, application management and operating system backup; and maintenance of software licensing agreements.