1101.1 Business and Internal Control Environment Structure
1101.2 Budget Development and Oversight
1101.4 Requestors and Preparers
1101.5 Approval Authority for Operational Transactions
1101.8 Electronic Operational Systems
This policy applies to all Yale Community Members participating in University Operations, as defined in Definitions, below. It establishes the fundamental principles for University Operations at Yale, creating the framework for a sound and ethical business and Internal Control environment.
Yale Community Members participating in University Operations are expected to conduct their activities with integrity, in accordance with the University’s sound and ethical business and Internal Control environment. Under the leadership of Yale’s officers, University leaders are responsible for ensuring existence of the following:
Every Yale Community Member is responsible for adhering to stated University policy.
In support of its mission, Yale is entrusted with funds from numerous sources and conducts complex University Operations. Yale is committed to ensuring that all Yale Community Members utilize University funds appropriately and exercise their operational responsibilities in accordance with ethical business practices and in compliance with applicable laws, regulations, policies, and other relevant requirements. This policy establishes the University’s expectations of its Community Members with respect to operational responsibilities.
Approval Authority
Permission granted or delegated to approve University operational transactions. An approval attests to the appropriateness of the transaction within the University’s mission objectives. Approval Authority is specific to transaction type (e.g., financial, administrative, etc.). It is distinct from Signature Authority (discussed in Policy 1104 University Signature Authority).
Approver
A Yale individual granted or delegated Approval Authority. An Approver’s responsibilities are specific to the transaction type being approved.
Central Process Leaders (“Central Offices”)
The centralized Yale offices responsible for the policies and/or processes under their authority. Examples of Central Offices include, but are not limited to, Finance, Human Resources, Information Technology Services, and Office of Research Administration.
Institutional Financial Oversight Supervisor
A University leader who, by virtue of their position, is responsible for oversight of the financial operations of the respective schools, departments, units, or other organizational units under their authority. Institutional Financial Oversight Supervisors include the Senior Vice President for Operations, the Vice President and Chief Financial Officer, the Associate Vice President for Academic Business Operations and Strategy, and the Deputy Dean for Finance and Administration at Yale School of Medicine.
Internal Control
The process, effected by Yale’s leadership, designed to provide reasonable assurance regarding the achievement of objectives relating to operations, reporting, and compliance.
Yale’s Internal Control environment is the set of policies, procedures, standards, processes, and structures that provide the basis for carrying out Internal Control across Yale’s operations and that establish clear roles and responsibilities. It reflects the overall attitude, awareness, and actions of the University’s Community Members.
Preparer
A Yale individual who creates an operational transaction. A Preparer may either be the same individual as the Requestor or act at the direction of the Requestor.
Requestor
A Yale individual who identifies a need for the initiation of an operational transaction and requests such initiation. Requestors are also known as Initiators. A Requestor may either be the same individual as the Preparer or direct another individual to act as the Preparer.
Regional Support Centers
Yale offices providing additional operational support to schools, departments, units, or other organizational units. Regional Support Centers supplement, but do not replace, Departmental Business Offices. Examples of Regional Support Centers include, but are not limited to, Yale School of Medicine Finance Office and Faculty Research Management Services.
School and Departmental Administrative/Business Offices (“Departmental Business Offices”)
The distributed Yale offices providing operational support to specific schools, departments, units, or other organizational units. Departmental Business Offices operate under the authority of their lead administrator, whose authority emanates from their dual reporting lines: 1) their respective Dean, Chair, Director, or equivalent-ranking employee; and 2) their respective supervisor for purposes of institutional financial oversight (i.e., Senior Vice President for Operations, Vice President and Chief Financial Officer, or Associate Vice President for Academic Business Operations and Strategy).
University Operations
Activities conducted in furtherance of the administrative, business, financial, and operational functions of the University.
Yale Community Member
An individual who, by virtue of their affiliation with the University, is subject to the policies of Yale University. Community Members include faculty, staff, and students. Community Members also include other individuals (e.g., alumni, affiliates, sponsored identities, suppliers) under certain circumstances when the individual’s specific activities or engagements with Yale subject them to some or all of Yale’s policies.
Yale Community Members participating in University Operations are expected to conduct their activities with integrity, in accordance with the University’s sound and ethical business and Internal Control environment. Every Yale Community Member is responsible for adhering to stated University policy, as well as the Yale University Standards of Business Conduct.
Yale’s leadership is responsible for establishing and reinforcing expectations regarding the importance of Internal Control, including expected standards of conduct. Yale’s leadership structure begins with the Board of Trustees (a.k.a. the “Yale Corporation”) and cascades down through the President, Provost, University Cabinet, Senior Vice Presidents, Deans, Vice Presidents, and other senior faculty and staff.
Central Offices, Departmental Business Offices, and Regional Support Centers all have roles (see Roles & Responsibilities, below) in establishing and supporting the University’s operational framework, which encompasses a sound and ethical business and Internal Control environment. These offices, as well as individuals in management positions throughout the University (including both faculty and staff) share responsibility for demonstrating leadership behavior that promotes Internal Control and individual accountability. Expectations of these offices, as well as individuals in management positions, include, but are not limited to, the following:
Reporting Suspected Conduct Violations
Yale Community Members are strongly encouraged to report suspected material violations of University policies and procedures, laws, regulations, sponsor requirements, donor specifications, or other applicable documentation. Yale Community Members should report suspected violations to both the Director of University Auditing and either a supervisor (in any applicable reporting line), Dean, the Controller, Human Resources, or the Office of the Senior Vice President and General Counsel, depending upon the nature of the violation. In the alternative, Yale Community Members may report suspected violations anonymously through the Yale University Hotline. Whether a suspected violation is reported anonymously or otherwise, the University prohibits retaliation against employees who in good faith report possible violations.
On an annual basis, Deans, Chairs, Directors, and equivalent-ranking employees (or their designees) must prepare a budget proposal for their respective schools, departments, units, or other organizational units. Such budget proposals must be reviewed and approved by the Provost (or designee) and in accordance with the University’s By-Laws.
The expenditure of University funds must be consistent with the approved annual budget.
All funds received by Yale or Yale Community Members, regardless of funding source, are the property of the University and must be deposited in an authorized University bank account and recorded in the University’s financial system (see Policy 2801 Depositing and Recording University Funds). All assets acquired using University funds, as well as donated assets, are property of the University. University funds and assets must be utilized consistently with the University’s sound and ethical business and Internal Control environment and should be used only for instructional, research, or other University mission-related purposes.
Any expenditure of University funds must only be made by an individual authorized to expend such funds. Expenditures must be made in accordance with University policies and procedures, laws, regulations, sponsor requirements, donor specifications, and other applicable documentation.
Only the central Yale Finance office is permitted to, with appropriate institutional and Yale Corporation approval, borrow funds on behalf of the University.
Yale Requestors identify a need for the initiation of an operational transaction and request such initiation based upon the business needs of their role(s). Requestors, upon requesting initiation of an operational transaction, are responsible for the following:
Primary Requestors (e.g., Principal Investigators) may exercise discretion and delegate authority to request the initiation of operational transactions to other appropriate individuals (e.g., trained laboratory personnel). Secondary Requestors (i.e., the individual(s) receiving a delegation) are responsible for the items bulleted above, but the primary Requestor remains ultimately accountable for the initiated operational transactions. Note: If secondary Requestors are unable to personally adhere to the items bulleted above, they are responsible for consulting with their Departmental Business Office to obtain the necessary information.
Yale Preparers create operational transactions, either as the Requestor or at the direction of a Requestor. Preparers are responsible for providing (and obtaining from the Requestor, as needed) all necessary information to complete operational transactions and verifying that transactions are complete. Preparers, unless they are also the Requestor, are not responsible for the items bulleted above.
Only Yale employees who have been granted Approval Authority in their position, or who have been properly delegated Approval Authority, may approve operational transactions. Approval Authority is distinct from Signature Authority, which authorizes specific individuals to sign instruments, contracts, receipts, or other documents with external parties that obligate the University (see Policy 1104 University Signature Authority). Individuals with Approval Authority only must not enter into agreements with external parties, as that is the function of Signature Authority.
Individuals with Approval Authority may exercise discretion and delegate Approval Authority to other appropriate individuals, although the original individuals with Approval Authority remain accountable. All delegations of Approval Authority must be documented, either through a Yale system electronically or in writing. Approval Authority granted via an electronic system (e.g., Workday) need not be separately documented or otherwise maintained.
Reviews and approvals of operational transactions must be performed in accordance with the processes and requirements detailed in Procedure 1101 PR.06 Approval Authority.
Adequate segregation of duties is critical to an effective internal control environment. Segregation of duties provides necessary checks and balances to deter fraud, detect errors, and prevent concealment of irregularities. The foundational principle is that no employee or group of employees should be in a position to perform all key functions of a transaction or event. Combinations of two or more of the following functions are considered incompatible duties and must be segregated:
To achieve appropriate segregation of duties, no one person should perform any of the following combinations of tasks for a transaction:
If these functions cannot be separated, prior approval for an alternative strategy is required (see Special Situations / Exceptions, below).
Yale Community Members participating in University Operations are expected to perform their activities with integrity, in accordance with the University’s sound and ethical business and Internal Control environment. Yale Community Members are accountable for the role(s) they perform within University Operations, which means they accept responsibility for their actions and are held to the applicable standard(s). Breaches of this accountability are subject to disciplinary action, as discussed in Section 1101.9.
Yale utilizes electronic operational systems (e.g., financial, procurement, human resources). Many operational transactions are processed through these systems. Operational transactions processed through these systems carry the same requirements as all other operational transactions.
Access to these systems and review of that access is governed by Policy 1601 Information Access and Security and its related procedures. Only those Yale Community Members properly authorized to access these systems may execute operational transactions within the systems.
Records created and/or utilized for University Operations are subject to retention and destruction requirements that vary based on the type and purpose of the record. Yale Community Members must adhere to the requirements set forth in the University’s Record Retention Schedule.
Yale Community Members in violation of this or other University policies are subject to disciplinary action in accordance with their affiliation to Yale. Employees are subject to disciplinary action up to and including termination of employment.
Requests for exceptions to this policy require prior approval by the Controller’s Office, in consultation with the Provost’s Office, General Counsel, or an Officer of the Yale Corporation, as appropriate.
Approvers
Central Offices
Deans, Chairs, Directors, and equivalent-ranking employees
Departmental Business Offices
Institutional Financial Oversight Supervisor
Lead Administrators
Preparers
Regional Support Centers
Requestors
University Auditing Department
Yale Community Members