Financial Corrective Action Procedure | AC1060

Financial Corrective Action Procedure

The Financial Corrective Action Procedure outlines the responsibilities and methods for identifying causes of nonconformities, initiating corrective actions, and performing follow ups. The Financial Corrective Action Procedure ensures that corrective actions have been effective in preventing the reasons for noncompliance. It applies to all causes of nonconformity relating to finance that are discovered during transaction processing or internal audits. (12 pages, 1461 words)

The assigned individual, or investigator, should investigate the nonconformity to determine the underlying, or root, cause or causes. Depending on the situation, the investigator may enlist the aid of other employees, forming an investigative team. Following investigation of cause, the Department Manager (or an authorized delegate) should review the results and consult with the investigator and appropriate employees to determine what corrective action(s) may be taken to eliminate the cause of the problem.

Financial Corrective Action Responsibilities:

The Controller is responsible for reporting on corrective actions taken at Management Review meetings and ensuring that this procedure is accurate, understood, and implemented effectively.

All Employees are responsible for identifying nonconforming conditions and initiating a Corrective Action, investigating and recording the cause of nonconforming conditions when assigned, and implementing corrective actions.

Financial Corrective Action Definitions:

CAR – Corrective action request.

Control Failure – Identified problem within the internal controls system.

NCR – Nonconformity (or nonconformance) report.

Nonconformity – Object or condition found not conforming to a standard or specification (regulatory, industry, customer, or company); something that falls outside of identified critical limits. Also called “nonconformance.”

Root cause – Most fundamental reason for the failure or inefficiency (the effect) of a process; effects can have more than one root cause.

Financial Corrective Action Procedure Activities

• Financial Nonconformance Reports
• Initiating Corrective Action
• Investigating root Causes
• Taking Corrective Action
• Preventing Recurrence of Financial Problems
• Verification and Closure

Financial Corrective Action Procedure Forms

• Nonconformance Report Template
• Financial Corrective Action Request Form
• Financial Corrective Action Log Template