1104 Signature Authority, Approval Authority and Access for Financial Transactions

Responsible Official: 
Controller
Responsible Office: 
Office of the Vice President for Finance and Chief Financial Officer
Effective Date: 
November 1, 2000
Revision Date: 
April 13, 2017

Scope

This policy provides guidelines for the appropriate delegation of signature authority, approval authority and access to University systems for all financial transactions at the University. This policy does not address signature authority and approval authority with respect to academic documents (which include faculty offer letters) and administrative documents.

Reason for the Policy

To establish a sound internal control environment where only employees with formally assigned or delegated signature authority are able to obligate the University with external parties and only authorized employees and their formal designees approve financial transactions at the University.

Definitions

 

Approval authority

Permission given or delegated to approve (but not sign and execute) financial transactions. This approval attests to the appropriateness of the transaction within the University’s program objectives and budgetary authorizations.

Financial transaction

Any exchange involving the transfer of money or property, currently or in the future, from or to the University.

Signature authority

Permission given or delegated to sign instruments, contracts, receipts or other documents on behalf of the University. 

Instrument

A written instruction that is exchangeable for money and is an unconditional promise or order to pay a fixed amount of money.  Examples of instruments are checks, wire transfers, money orders, notes, and drafts.

Contracts

Any commitment to exchange money or property, currently or in the future, from or to the University, or to perform services which would require the expenditure of money or use of University resources.

Certification process

A method for ensuring a minimum knowledge base is achieved to perform designated tasks.

Fiduciary responsibility

A duty, created by one’s employment, to act primarily for the University’s benefit in business transactions and matters related to the handling of money or property.

Standards of Business Conduct

Yale University’s Standards of Business Conduct articulate the overarching ethical and legal principles that govern business dealings at Yale by Yale faculty and staff. They are designed to serve as a useful distillation of well-established precepts and to re-emphasize the importance of adhering to them in all business dealings.

Yale Shared Services

Yale’s Shared Services (YSS) provides a range of business support and financial management services to business offices across the University.  The scope and role of Yale Share Services for individual transaction types is governed by standard written partnership agreements with client units.

Policy Sections.

1104.1 Signature Authority

Only Yale officers or employees who have been given signature authority by the Yale Corporation By-Laws or a resolution of the Yale Corporation, or who have been delegated authority as prescribed in such By-Laws aws or resolution, can execute and deliver instruments, contracts, receipts and other documents to which the University may be or become a party.

The Yale Corporation By-Laws and related Yale Corporation resolutions provide that the President and Vice President for Finance are each authorized to execute and deliver any and all contracts, receipts and other documents to which the University may be or become a party.

The President and Vice President for New Haven and State Affairs and Campus Development are each authorized to execute and deliver such contracts, receipts, and other documents as relate to the ownership and management of real property and facilities of the University to which the University may be or become a party.

The President and Vice President for Human Resources and Administration are each authorized to execute and deliver any and all contracts and other documents relating to the University’s human resources, organizational development, labor relations and diversity and other non-academic support services and administrative work assigned to the Vice President for Human Resources and Administration by a resolution of the Corporation. 

The Vice Pesident for Development is authorized to issue gift receipts on behalf of the University.

The Vice President for Finance, the Vice President for New Haven and State Affairs and Campus Development and the Vice President for Human Resources and Administration have the power to delegate their signature authority to one or more subordinate employees or, with the approval of the President and when appropriate to the duties and responsibilities of such individual, to another officer or to employees subordinate to another officer.  The Yale By-Laws and related Yale Corporation resolutions require that a Vice Presidents’ delegation of signature authority for certain types of documents be approved by the Yale Corporation Committee on Finance. All changes to delegated signature authorities must be reported to the Office of the General Counsel, who is responsible for maintaining the records on the delegation of signature authority for financial transactions.

Finally, a Yale Corporation resolution authorizes specific employees (including the President, the Vice President for Finance, the Vice President for New Haven and State Affairs and Campus Development, the Vice President for Human Resources and Administration and a limited number of other employees) to approve wire transfers and sign checks, drafts and other similar instruments on behalf of the University.

1104.2 Approval Authority

The Yale Corporation delegates primary financial and fiduciary responsibility for the University to the Vice President for Finance who is responsible for establishing a sound internal control environment, one aspect of which is ensuring that any approval of financial transactions is made by an authorized individual.  Please note that approval authority differs from signature authority.  The approver confirms that the financial transaction is appropriate but only an employee with signature authority can execute the transaction.

All individuals who are involved in financial transactions within the University have a fiduciary responsibility to safeguard the assets of the institution and ensure the integrity of its accounting records.

All Yale faculty and staff are expected to adhere to the Standards of Business Conduct in all dealings inside and outside of the University.

Within each operating unit, the dean, chair or director is responsible for the overall operations of the unit and has approval authority for all financial transactions within the unit.  The dean, chair or director may delegate approval authority to the unit’s lead administrator. The lead administrators may, in turn, delegate approval authority to certified designees.

 Within that structure, the Vice President delegates approval authority for certain financial transactions to lead administrators and the Assistant Vice President of YSS. The lead administrators and the Assistant Vice President of YSS may delegate approval authority to their subordinates. 

An electronic or written signature must evidence the approval of all financial transactions. The approval of a financial transaction attests to its completeness, accuracy, and validity. Authority to approve a financial transaction is normally granted only upon completion of training required as part of the certification process. System-executed transactions must carry evidence of approval in the form of the unique NetID of the approver or some other auditable means of identification.

1104.3  Access to University Financial Systems

The lead administrator determines the appropriate access to the University’s systems based on an employee’s  work responsibilities as, for example, an initiator, preparer or approver.  The Training Access Coordinator (TAC) is responsible for obtaining the access requested by the lead administrator.  Before accessing the system, the employee acknowledges his/her responsibilities as an initiator, preparer and/or approver by agreeing to and signing Form 1104.01 Accountability Statement.

The University’s major financial systems, the process for requesting access to them, and the levels of access are listed in Appendices A, B and C.

Through periodic reviews, the lead administrator ensures that employees in their unit have access to the appropriate financial systems and that these employees are carrying out their job responsibilities within these systems in accordance with University policies.

1104.4 Improper Transactions

Employees that are suspected of perpetrating fraudulent acts may be placed on a paid or unpaid administrative leave during the course of an investigation. Employees found to have participated in fraudulent transactions will be subject to disciplinary action up to and including termination.  

Special Situations/Exceptions

The University relies on the internal control environment to protect the interests and manage the risks of the University; therefore exceptions, if allowed, must be approved by the Office of the Controller.

Roles and Responsibilities

All University staff with financial responsibilities must read and acknowledge, electronically, the Accountability Statement (form 1104FR.01) located in the Training Management System (TMS) acknowledging that they understand their responsibilities refered to in the Statement. Employees with approval authority are responsible to approve only appropriate and legitimate financial transactions and may delegate approval authority to other qualified employees under their scope of authority. If approval authority limits are not maintained in one of the University’s financial systems, the person delegating approval authority will maintain appropriate documentation of such delegation.   

       Vice President for Finance and Chief Financial Officer

        Has primary financial and fiduciary responsibility for the University. Delegates signature authority as set        forth in the Corporation’s By-Laws, Corporation resolutions, and as recorded by the Office of the General Counsel. 

        Deans, chairs and directors

Have approval authority for the financial transactions of their units and may delegate approval authority to the department lead administrator as necessary and appropriate.  If they delegate approval authority and the approval authority limits are not maintained in one of the Universiyt’s financial systems„ they are responsible for retaining the documentation.

Information Technology Services

Is responsible for  ITS supported  systems and databases and will alert Controller when any are added or removed.

Lead Aministrator

Is responsible for their employees’ access within and outside their department and delegation of approval authority for the University systems listed in 1104 PR.01 Appendix A–Glossary of Responsibilities Included in BUG 112a, 1104 PR.01 Appendix B–BMS Web Secruity and menu Access Review Reports, and 1104 PR.01 Appendix C–Other Significant Applications. 

Process Owner /Database Owner for Applications in 1104 PR.01 Appendix C–Other Significant Applications)

Is responsible to annually provide to departments a list of employees who have access to their systems.

Process Owner/ Database Owner for Applications not in any of the Appendices

Is responsible for reviewing access for appropriateness, annually.

        Initiator

Has first-hand knowledge of how the expense benefits the account charged, is appropriate and allowable based on the funding source. Has reasonable assurance funds are available.

For sponsored awards, Initiators other than the Principal Investigator must be authorized by the Principal Investigator to initiate transactions on the account.  The authorization must be documented in the award file. Departments may use form 1310 FR.05 Delegation of Initiator Authority for Sponsored Projects. Initiators must have first-hand knowledge that the expense is allowable per sponsor policies and the terms and conditions of the account (if applicable), and is consistent with University policy.

Preparer

Places the order for goods and services on direction of the initiator. Provides appropriate documentation for transactions. Verifies that transactions contain appropriate and complete transaction information and description (WHO, WHAT, WHERE, WHEN & WHY) and provides valid and appropriate account(s).

Approver

Approves transactions and ensures compliance as follows:

  • Confirms compliance with University and sponsor policies and with the terms and conditions of the account (if applicable);
  • Confirms availability of funds in an approved operating or capital budget;
  • Confirms appropriateness of accounting information and source of funds;
  • Reviews basic transaction information to ensure it is appropriate, reasonable, and complete;
  •  Verifies through inquiry or has direct knowledge that the goods were received or the services were performed; and
  •  Confirms that he/she has the necessary approval authority to approve the transaction.