Applying Segregation of Duties Beyond Standard Checks and Balances [SUBSCRIBERS-ONLY]
Segregation of duties is a bedrock principal of internal accounting control systems and is visible in many elements of nonprofit organization accounting policies and procedures. Without segregation of duties, internal accounting control systems would not be safe or effective. Less often recognized is the powerful impact segregation of duties can have when applied to operational planning and resource management.
The AICPA defines segregation of duties as follows:
“Segregation of duties (SOD) is a basic building block of sustainable risk management and internal controls … The principle of SOD is based on shared responsibilities of a key process that disperses the critical functions of that process to more than one person or department. Without this separation in key processes, fraud and error risks are far less manageable.”
This principle is steadfast and effective. However, applying the separation principle to management decision-making, including operational planning and resource management, will make SOD even more beneficial to nonprofit organizations.
