6.12 Internal Control

While the Board has identified the Chancellor as the single official link to the operating organization, under the Maricopa Governance structure within this multi-college district, the Chancellor shall also direct management to operate within a system of internal control.

1. Definition:
   
   The term "management" means members of the following employee groups: the Chancellor’s Executive Council (CEC), and Management, Administrative & Technological (MAT) as well as any other employee groups (excluding faculty except as defined herein) that may subsequently be created in which employees are exempt from the Fair Labor Standards Act. Additionally, this policy applies to faculty members who serve as division chairs and department chairs and therefore serve in a supervisory or decision-making capacity for a division or department, faculty members or other employees who serve as a director or coordinator of a program, service, institute or other initiative.
2. Management Responsibility
   
   MCCCD management is charged with the responsibility for establishing a system of internal controls, risk management and organizational processes over the operations of MCCCD in a manner which provides the MCCCD Governing Board reasonable assurance that:
   1. Risks are appropriately identified and managed.
   2. Interaction with the various organizational groups occurs as needed.
   3. Significant financial, managerial, operational information is accurate, reliable and timely.
   4. Employees’ actions are in compliance with policies, standards, procedures and applicable laws and regulations.
   5. Resources are acquired economically, used efficiently and protected.
   6. Programs, plans and objectives are achieved.
   7. Significant legislative or regulatory issues impacting MCCCD are recognized and addressed appropriately.

   The system of internal controls over the operations is a function of management and is an integral part of the overall process of managing operations. As such, it is the responsibility of managers at all levels of the organization to:

   1. Identify and evaluate the exposures to loss which relate to their operations.
   2. Specify and establish plans and operating standards, procedures, systems, and other disciplines to be used to minimize, mitigate and/or limit the risks associated with the exposures identified.
   3. Establish practical systems of internal control processes that require and encourage employees to carry out their duties and responsibilities in a manner that achieves the seven (7) control objectives outlined in the preceding paragraph.
   4. Maintain the effectiveness of the systems of internal control processes that they are responsible for.
3. Audit and Finance Committee
   
   ​The Audit & Finance Committee’s purpose is to assist the MCCCD Governing Board’s broad oversight and monitoring responsibilities for:
   1. The reliability, integrity and transparency of financial reporting and disclosure, and other financial information.
   2. The establishment and ongoing monitoring processes to assure adequate functioning of the systems of internal control.
   3. The establishment and ongoing monitoring processes of the MCCCD ethics initiative; compliance with applicable laws and regulations and MCCCD policies; including the results of ethics violations and violations of laws, regulations and MCCCD policies.
   4. The risk management policies and processes and ongoing monitoring efforts.
   5. The independence and performance of the internal and external auditors.
   6. The Audit and Finance Committee shall be chaired by a member of the community serving on the committee and the vice chair shall be a Maricopa Community Colleges Governing Board Member who serves on the committee. The community member shall be a financial expert.
   7. At least annually, the Audit and Finance Committee shall meet in executive session with the external auditor and or Internal Audit Director. Executive sessions shall exclude those committee members who are directly employed by the Maricopa Community Colleges, except the Internal Audit Director.
4. Internal Audit Responsibility
   
   MCCCD’s Internal Audit and Management Advisory Services Department (IAMAS) is charged with the responsibility for ascertaining that MCCCD’s systems of internal controls, risk management, and organizational processes, as designed and represented by management, are adequate and functioning. IAMAS is also responsible for reporting to management and the Audit and Finance Committee of the Governing Board on the adequacy and effectiveness of the organization’s systems of internal control, together with ideas, counsel, and recommendations to improve the systems.
5. Review and Approval of Statement
   
   The policy statement on Internal Control was reviewed and approved by all of those defined herein as management, as well as the chair of the Audit and Finance Committee. The District may elect to use an electronic form to collect these approvals/acknowledgements. The District may additionally engage in or require training of employees on this statement as may be necessary.

Approved by: Chair of the Audit & Finance Committee, Chancellor, Director of Internal Audit, College Presidents (CGCC, EMCC, GWCC, GCC, MCC, PVCC, PC, RSC, SCC, SMCC), Vice Chancellors (Business Services, Human Resources, Academic and Student Affairs), Other Chancellor's Executive Council Member(s) (CEC), All Other Persons Defined in this Policy