Chief Financial Managers (CFMs) are responsible for ensuring financial transaction approval authorities and processes within their college, campus, or administrative units are designed and performed so that they are cost-effective, and adhere to the following guiding principles:
Knowledge and authority: Authorized approvers must be those persons who will have an understanding of the transaction to ensure its accuracy and consistency with University policy, and who will also have the requisite authority to approve or deny the transaction.
Segregation of Duties: Generally, approval processes must be designed to ensure that no one person can approve transactions on which they also perform the following functions:
- committing to or authorizing payment for payroll, purchases, travel/expense reimbursements, or cash disbursements;
- receiving or distributing goods, checks, or cash; or
- recording transactions on the University’s financial system.
One-Up Approvals: Employees cannot approve their own travel and expense reimbursements, or purchases they initiate. Employee travel and expense reimbursements, and purchases of goods or services that could be perceived as personally benefitting an employee, must be approved by a person one level senior to the employee requesting reimbursement or initiating the purchase.
Approval authority can be delegated by the original approver, however accountability cannot be delegated. Both the delegate and the original approver are accountable for any approvals completed.
Ensure transactions are appropriate in nature and adhere to University policies. Refer to Approver Expectations and Issue resolution procedure for additional information.
Approval processes utilized by campuses, colleges, and vice presidential units must be consistent with certified approval requirements on sponsored projects, all requirements for central approvals on certain transactions, and any other special requirements.
Reason for Policy
Adequate review and approval of transactions is a key financial internal control. This policy provides a consistent framework for approvals to ensure that:
- funds provided to the University by taxpayers, students, donors and sponsors are being used in accordance with federal and state requirements, donor intentions, University policy and/or sponsor directives;
- the risks of fraud or misuse of funds is effectively managed; and
- transactions included in the University’s financial statements are accurately reported, in accordance with generally accepted accounting principles.