The board of commissioners for Michigan's Livingston County recently approved several policies intended to streamline financial processes and ensure fiscal compliance across departments, WHMI-FM reports.
The four resolutions include policies pertaining to business expense reimbursement, claims and payable, accounts payable audits and accounts payable with board pre-authorization. County financial officer Cindy Mendoza told the news source that the board hopes the protocols will bring daily procedures in line with practice and promote consistency.
Having an AP audit policy in place can have both preemptive and reactive benefits. A well-publicized policy of conducting regular AP audits can dissuade employees from attempting to misappropriate funds from an organization. AP audits can also improve the chances of catching both embezzlement and good faith mistakes soon after they begin to occur, thereby mitigating the company's losses.
Introducing division of duties and a system of checks and balances can also reduce the risk of misappropriation. Companies that give too much responsibility to one employee increase the likelihood of embezzlement occurring. In some cases, misappropriation is allowed to continue unchecked for years because employees are able to "cook the books" and hide their actions from auditors.