Written by Fran Lawrence.
Are you aware of the importance of internal controls? Internal controls are essential to providing reliable financial reporting for management decisions. That means information creating the university’s financial statements have checks and balances in place to provide reasonable assurance that information is reliable, accurate and timely. Ensuring internal controls best practices to an effective control environment of segregation of duties, safeguarding assets, review and approval, efficiency and effectiveness and accounting and timeliness is everyone’s responsibility.
Internal controls over financial reporting are a process affected by NC State’s Board of Trustees, executive and senior level management and functional level management. These controls are assigned to oversee, design, implement and conduct financial reporting activities to provide reasonable assurance as to the reliability of the university’s financial reporting. The UNC System Office and the Office of State Controller require annual certification from the chancellor and vice chancellor of finance and administration.
This certification is in accordance with the requirements of North Carolina General Statute §143D-7, to certify, to the best of our knowledge and belief, that NC State has performed an annual review of its system of internal control as of June 30, 2023. This process is the foundation for financial audits to use as a stable control environment and contributes to our clean audit reports with no findings.
Jennifer Brady, director of financial reporting in the University Controller’s Office, leads this project. There are two documents completed that describe the control environment, risk assessment, control activities, information and communication and monitoring activities. These documents are completed by the Internal Controls Assessment Committee. This team is very collaborative and all contribute to the success of the university with their efforts throughout the year to keep the control environment in place.
The process utilized for fiscal year 2022-2023 was consistent with prior years. Significant changes in personnel and new governmental accounting standards implementation were noted during the assessment. One minor finding continues to be reported regarding compliance with an ISO standard that was originally identified in 2016 that is a system wide minor issue. There were no significant or major findings to report in the annual certification.