Effective Accounting Systems

SFAs must consider the following financial management standards in developing a financial management system:

Accounting System Qualities

1. ​Documentation that demonstrates accurate, current, an complete disclosure of the program's financial transactions - including budgeted authorizations, obligations, unobligated balances, assets, liabilities, and expenditures as well as income or revenue;
2. Procedures that ensure that no one person has complete control over all aspects of financial transactions;
3. Methodology that allows for the comparison of actual expenditures against budgeted amounts.

Accounting Practices

1. Procedures that ensure that all costs are necessary, reasonable, allocable, and allowable;
2. Procedures that track the source of funds;
3. Procedures that track the allocation or planned use of funds;
4. Procedures that track the application or use of funds;
5. Procedures that track the person who authorized the use of funds to pay expenses.

Audit Practices

1. Procedures that require organization-wide audits, or program specific audits if applicable, to determine, at a minimum, the fiscal integrity of financial transactions and reports, compliance with laws, regulations, and administrative requirements;
2. Procedures that ensure that there is a systemic method for assuring timely and appropriate resolution of all audit findings and recommendations, including organization-wide strategies.

 

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