Financial Authorization and Signature Policy

Overview

Scope of Policy

Responsibilities

Definitions

Authorizations / Required Signatures

Additional Reviews

Financial Authorization and Signature Policy

1. Overview

The purpose of this policy is to provide guidance so that significant expenditures, contractual obligations and other actions which commit the University financially and/or legally are reviewed and authorized on a consistent basis. The scope of this policy does not include authorization for personnel and compensation actions nor for construction projects in the Medical Center which require Certificate of Need (CON) approval.

2. Scope of Policy

The scope of this policy includes all actions with a financial impact that require approval by University senior management and/or Board of Trustees (excluding the areas noted above) as outlined in Section 4. Divisional policies should be established to provide guidelines for those actions that fall outside the scope of this policy. (This document specifies the highest level of approval ("final") required for various transactions but does not necessarily detail all required approvals.)

3. Responsibilities

Division or Central Department Management – Primary responsibility for following the authorization process including provision for proper and complete documentation and routing to appropriate individual for approval.

Senior Management (Sr. VP & CFO / MC VP & CFO / Sr. Directors) – Responsible for reviewing and approving significant transactions after assessing the impact on the University's financial position and strategic objectives.

Office of Counsel – Responsible for reviewing non-standard terms and/or modifications to significant contracts and leases to ensure that they are in the best interest of the University.

Facilities Planning and Project Management Office (PPM) – Responsible for the coordination of all construction projects including determining feasibility, cost estimation, scheduling, etc. (Also refer to Policy on Board Approval of Capital Projects.)

Chief Information Officer (CIO) – Responsible for coordinating University-wide information systems, strategic capital planning and prioritization and assisting in divisional information systems capital planning.

Purchasing – Responsible for purchasing all goods, services (including those of independent contractors/consultants), and equipment for the University; for the rental or leasing of equipment; and for the issuance of documents which commit University funds payable from any University account.

4. Definitions

Strong Memorial Hospital Committees

• DOL – Directors' Office Liaison
• BAC – Budget Administration Committee
• PBC – Planning Budget Committee

Certificate of Need (CON)– required construction authorization for the Hospital (not included within the scope of this policy)

Capital Lease – a capital lease is one that meets one or more of the following criteria:

• The lease transfers ownership of the property/equipment to the lessee by the end of the lease term.
• The lease contains a bargain purchase option.
• The lease term is equal to 75% or more of the estimated economic life of the leased property/equipment.
• The present value of the minimum lease payments equals or exceeds 90% of the excess of the fair value of the leased property to the lessor.

Capital leases are considered debt and need to be carefully reviewed and considered. To this end, all lease arrangements should be made through the Treasury Manager so that a proper evaluation of the terms can be made.