Financial Policies

FN18 University Approval Authorization Policy

Policy Status: 

Under Review

Subject Matter Expert: 

University Financial Officers, https://controller.psu.edu/contact-staff,

Policy Steward: 

Associate Vice President for Finance and Corporate Controller

NOTE: The implementation of SIMBA requires the evaluation of all University Financial Policies and Guidelines.  After consultation with key constituencies, work will be underway to update, consolidate, and improve our policies to better serve you. Please be aware that due to volume, all policies may not be updated to reflect changes which have been communicated; however, policies will be updated with appropriate and applicable effective dates. Thank you for your patience as we work through this process.

Contents:

 

PURPOSE

This policy establishes the minimum approvals required on University expenditure, budgetary, and personnel documents, while assuring a proper level of administrative control. The policy pertains to all such transactions, no matter the media (paper or electronic), for all administrative systems of the University, including Workday, IBIS, eBuy, and ERS.

SCOPE

This policy is applicable to all members of the Penn State community and applies to all locations and operations of the University, including the College of Medicine. Penn State Health and The Pennsylvania College of Technology have separate policies and are thereby exempt from this policy. This policy also applies to all University fund types unless otherwise specified.

DEFINITION OF TERMS

  • Authorized Approver - A Budget Executive, Budget Administrator or Financial Officer.
  • Budget Administrator - Any individual designated by a Budget Executive as being responsible for operating and controlling specific budget areas within such Budget Executive's administrative area. Budget Administrators may approve documents in his or her own name within the limits of the authorization policy stated below. This group normally includes associate deans, division heads, and department heads. Approval of a transaction by a Budget Administrator constitutes an acknowledgement that the transaction (a) is within specified dollar levels and categories, (b) meets the mission and goals of the unit and the University, (c) demonstrates good stewardship of University resources, and (d) is appropriate within University policies, guidelines, and procedures.
  • Budget Assistant - Any individual delegated by a Budget Administrator (with the concurrence of the relevant Budget Executive and Financial Officer) to approve transactions in his or her own name on behalf of such Budget Administrator within the limits of the authorization policy stated below. Budget Assistants are typically regular staff positions with knowledge of the unit's mission and goals and a level of judgment suitable for making decisions regarding transactions, as determined by the accountable Budget Administrator. Approval of a transaction by a Budget Assistant constitutes an acknowledgement that the transaction is (a) within specified dollar levels and categories, (b) meets the mission and goals of the unit and the University, (c) demonstrates good stewardship of University resources, and (d) is appropriate within University policies, guidelines and procedures.
  • Budget Executive - Any individual who is responsible to the President, the Executive Vice President and Provost, the Vice President for Commonwealth Campuses and Executive Chancellor, or a senior vice president for the management of an administrative area. These individuals are normally the President's administrative staff, academic deans, and chancellors. Approval of a transaction by a Budget Executive constitutes an acknowledgement that such transaction is (a) within specified dollar levels and categories, (b) meets the mission and goals of the unit and the University, (c) demonstrates good stewardship of University resources, and (d) is appropriate within University policies, guidelines and procedures.
  • Budgetary document - Transactions (documents) resulting in a direct * permanent or temporary transfer or reallocation of funds between/among budgets, or resulting in the establishment, closing, or change to a budget/allocation.
  • Delegated Approver - Budget Assistant or Financial Assistant.
  • Designated Approver - Any individual authorized to serve in a Budget Executive or Budget Administrator role with full authority for transaction approval.
  • Expenditure document - Transactions (documents) resulting in a direct* central encumbrance or expense primarily to the allotment portion of a budget and not personnel or budgetary actions.
  • Financial Assistant - Any individual delegated by a Financial Officer to approve transactions in his or her own name on behalf of such Financial Officer within the limits of the authorization policy stated below. The Financial Assistant aids the Financial Officer in assuring that expenditures are controlled, that adequate and appropriate funds are available, that assets of the University are protected, and that all actions comply with University policies, guidelines, and procedures. The Financial Assistant also ensures the accuracy of all documents/actions through all financial systems. Financial Assistants are typically regular staff positions with knowledge of University policy and procedure and a level of judgment suitable for making decisions regarding transactions, as determined by the accountable Financial Officer. The authority delegated to a Financial Assistant must be approved by the Budget Executive and the Assistant Controller.
  • Financial Officer - Those individuals who represent the Corporate Controller in the various Budget Executive administrative areas. The Financial Officer has the responsibility of assuring that expenditures are budgetarily controlled, that adequate and appropriate funds are available, that assets of the University are protected, and that all actions comply with University policies, guidelines, and procedures. The Financial Officer is also responsible for ensuring the accuracy of all documents/actions through all financial systems.
  • Manager - In Workday, this is a security role identified and approved by a HR Strategic Partner and is assigned to anyone who supervises one or more direct report(s). Managers are responsible for approving time worked entries and may enter hours on behalf of employee who are unable to do this themselves.
  • Personnel document - Transactions (documents) having a direct * effect on positions, appointments, reappointments, terminations, or an employee's gross compensation across all classes of employees. These are processed in Workday and follow the rules established in the system for each business process regarding required approvals.
  • Proxy Approver - Any individual authorized by a Budget Executive, Budget Administrator, or Financial Officer to approve actions (documents) when the Budget Executive, Budget Administrator, or Financial Officer is unavailable to perform their approval duties for a period that would be disruptive to the normal business process. The proxy may not approve actions (documents) when the Budget Executive, Budget Administrator, or Financial Officer is present.
  • Timekeeper - In Workday, this is a security role identified and approved by a HR Strategic Partner to unit-based individuals who are authorized to approve employee timesheets as a delegate for the manager.

* “Direct” infers that this is the final time in which the action will be brought before the required approvers to approve/disapprove the action before the stated results become effective. Certain University documents exist that secure the preliminary approval for an action. These preliminary documents then become support documents that accompany, or are referenced by, one of the classes of documents defined in this policy. Such preliminary documents are excluded from the guidelines of this policy.

POLICY

The intent of this policy is to provide adequate oversight and control while assuring efficient operational effectiveness. Each Budget Executive, Budget Administrator and Financial Officer may delegate approval authority to others as outlined in this policy but is ultimately responsible for the proper management and oversight of the operation of the administrative area for which such individual is assigned.

TYPES OF APPROVAL AUTHORITY

Budget Executives, Budget Administrators, Budget Assistants, Financial Officers, and Financial Assistants are stewards of the financial accounts under their authority, and have a responsibility to assure that all financial transactions posted to these accounts are appropriate and reasonable, based on various criteria including:

  • transactions supporting or advancing the unit’s mission and goals
  • transactions aligning with budget priorities
  • transactions compliant with legal requirements and stakeholder expectations

Budget Executives, Budget Administrators and Budget Assistants are accountable for judgments and decisions made regarding expenditures on accounts for which they are responsible.

The Financial Officer and Financial Assistant are responsible for assuring that adequate and appropriate funds are available, and that the transaction is compliant with state and federal law and regulations and University policy, guidelines, and procedure.

Budget Executives and Budget Administrators retain the option of requiring that all expenditure and budget documents, or only selected documents in addition to those required in this policy, be brought to their attention for approval. This policy specifies minimum approval requirements; setting a higher level of approval or lower dollar thresholds is permissible. Multiple documents may not be processed for the same transaction to avoid the dollar limits established in this policy. Workday has standard approval authorities for all personnel transactions based on the business process.

Authorized Approvals

An individual functioning as a Budget Executive, Budget Administrator or Financial Officer has inherent approval authority granted to them by this policy. Documentation relating one of these functions to an actual individual is discussed under "Documentation of Approval Authority", below.

In Workday, roles are consistent across the University and certain roles (Manager and Timekeeper) are established by the HR Strategic Partner, who grants the authority of the role to the person assigned to it.

Designated Approvals

A senior administrator, chancellor, or academic dean may designate another individual to approve transactions on their behalf of a Budget Executive. This individual must be at a higher level of authority within the unit, with knowledge of the mission and goals of the unit and a high level of integrity and judgment. Anyone designated to approve transactions on behalf of a Budget Executive must be approved by the Corporate Controller. Designated Approvers may also be established to approve transactions on behalf of Budget Administrators with approval from the Budget Executive and Financial Officer.

Proxy Approval

Authorized Approvers should identify one or more Proxy Approvers to approve documents by proxy in their absence from the University. It is recommended that these proxy designations be on-going in nature rather than issued/rescinded each time such Authorized Approver is absent/present.

On paper documents, the Proxy Approver will approve a document in their own full name and print the initials of the Authorized Approver. For IBIS documents, a proxy will be shown in an approval path by the UserID of the person authorizing a proxy, followed by the UserID of the person assigned as proxy. (e.g., "ABC1/XYZ2" where ABC1 is the absent Authorized Approver, and XYZ2 is the Proxy Approver.) Other administrative systems will reflect proxy approval as designed for that system.

NOTE: Budget Assistants and Financial Assistants may not identify a proxy for purposes of approving a document in their absence. However, when there are multiple delegated approvers at one level of an approval path, of which one approver is the default, the primary way the other delegated approvers can get to the forms awaiting the default is to be listed as a proxy for the default.

Some forms do not permit proxy approvals - those forms will be identified in the signature area of the respective form.

Delegated Approvals

A Budget Administrator or Financial Officer may identify one or more individuals as a Delegated Approver to approve certain documents on their behalf on an ongoing basis. This Delegated Approver shall approve paper documents by using his or her own full name and approve electronic documents by using his or her own UserID. Documents excluded from delegated approvals are those from categories that specifically require a Budget Executive's, Budget Administrator's or Financial Officer's personal approval (as previously listed), and certain other forms as stated on the forms themselves.

NOTE: Budget Assistants and Financial Assistants may not identify Delegated Approvers. In the absence of the Budget Assistant and Financial Assistant, approval reverts to the Authorized Approver.

Financial Officers, or the Proxy Approver in their absence, must personally approve all documents specifically requiring the Budget Executive's approval. (This may not be delegated approval.)

In Workday, Budget Administrators and Financial Officers may delegate all or some business process tasks assigned to that role to someone else for a designated period and requires a start and end date. For those business processes which can be delegated, there are rules regarding who can be designated, and approval of the delegation may be required.

In Workday, the timekeeper role is designated by the manager to enter and approve hours for designated employees.

The individual delegated approval authority by the budget administrator is known as a budget assistant. The individual delegated approval authority by the Financial Officer is known as a financial assistant.

Assignment of Approval Authority

An Authorized Approver may not assign authority to a Proxy Approver or a Delegated Approver that goes beyond the authority specified in this policy. However, an Authorized Approver may choose to limit the authority of a Proxy Approver or Delegated Approver or assign authority any way they see fit within the bounds of this policy. For example, a Budget Administrator or Financial Officer may identify two or more Budget Assistants or Financial Assistants and have them all approve documents equally (to handle the volume of forms), or to split approvals functionally (such as one for general funds and one for miscellaneous funds). All assignments must be documented per the following:

Documentation of Approval Authority:

While this policy defines the authority and responsibilities for those individuals identified as Budget Executive, Budget Administrator, Financial Officer, Budget Assistant, Financial Assistant, Delegated Approver and Proxy Approver (where permitted), it recognizes that only the term "Financial Officer" reflects an actual position title. The remaining identifiers exist only to delineate differing levels of authority and responsibility necessary to properly administer this policy. Therefore, the level of FN18 authority may not always be derived solely from a person's actual position title, particularly at lower levels of authority. While a dean usually functions as a Budget Executive by the inherent responsibilities of the position, the same cannot be said of individuals functioning as Budget Assistants, for example.

To provide a reasonable level of control and to satisfy any auditing requirements within the University and by external agencies, the Financial Officer must maintain evidence of approval authority of all FN18 approvers for their respective administrative area, except for certain roles in Workday (Manager and Timekeepers). Such evidence must identify the name of the approver, the approval function (role) to be performed (Budget Executive, Budget Administrator, Budget Assistant, Financial Officer, Financial Assistant, Delegated Approver or Proxy Approver), and the scope of the approval authority.

Budget Executive authority must be approved by the Corporate Controller.

Budget Administrator authority must be approved by the Budget Executive and Financial Officer.

Financial Officer authority must be approved by the Assistant Controller/Director, University Financial Officers.

Workday has four (4) approval roles for personnel actions, other than time worked: unit administrator (which is not a required role), Budget Administrator, Financial Officer and Budget Executive. These roles approve Workday HR transactions in the order they are listed. Workday roles are established by the Financial Officer, with update in the system done by the Workday security central office based on requests from the Financial Officer.

NOTE: In Workday, there may be multiple individuals in a role to assure efficient approval. Each of these individuals should have authority for the role established and approved through the ROLE form (unit administrator, Budget Administrator, Budget Executive, and Financial Officer).

Delegations of Workday roles by the Financial Officer or Budget Administrator require the following approval:

  • For delegations initiated by a Financial Officer, the Manager of such Financial Officer must approve (generally Assistant Controller/Director, University Financial Officers).
  • For delegations initiated by a Budget Administrator, the Financial Officer must approve.

Workday approval authority for Managers and Timekeepers within a unit are established and authorized by a HR Strategic Partner for such unit and documented in Workday.

IBIS Approval Path Guidelines

The following requirements must be observed by Financial Officers when establishing or maintaining approval paths (mandatory approvals within IBIS):

  1. It is the responsibility of the Financial Officer to ensure that the required approvers for a particular IBIS form appear in the corresponding approval path for that form.
  2. The UserID of the individual authorizing proxy approval or delegated approval must appear on the same level of an approval path as the proxy or delegated approvers.
  3. The Financial Officer (or their Delegated Approver) must appear in the default column on the final level of all approval paths prior to a document/action routing to a central office.
  4. No Proxy Approver may appear in the default column of any path. (Refer to Electronic Approval Paths.)
  5. Because the approval paths have no symbol for permitting two or more budget assistants or financial assistants to have EQUAL approval access to the default column to process awaiting forms, the Proxy symbol "/" must be used in setting up the path. The Budget Administrator and Financial Officer must create delegated authorization via the Authorized Approval System or through completion and approval of the Workflow ROLE form, establishing identical approval authorizations (rather than completing proxy authorization).
  6. Approval paths may also contain additional individuals not performing any of the roles required by this policy. Typically, such individuals will appear on level 9 of departmental paths but may appear elsewhere in the path if the provisions of this policy are met. These individuals perform no officially-recognized approval function and therefore require no documentation of approval authority.

ROLE RESPONSIBILITIES

Budget Executive

A Budget Executive must approve:

  1. all expenditure actions (documents) of $100,000 or more,
  2. all permanent budget actions of $100,000 or more,
  3. all actions required by other University policies to be taken by a Budget Executive.

NOTE: THE ABOVE BUDGET EXECUTIVE APPROVALS, EXCEPT WHERE NOTED, MAY NOT BE DELEGATED TO A LOWER LEVEL. (Budget Administrator or Budget Assistant)

Budget Administrator

A Budget Administrator (unless otherwise restricted by the Budget Executive) must approve and may not delegate approval of:

  1. all expenditure actions (documents) from $10,000 to $99,999 inclusive,
  2. permanent budget actions up to $99,999, and all temporary budget actions of $10,000 or more,
  3. personnel actions in Workday involving all Standing Appointments, Fixed-Term Multi-Year appointments and Fixed Term I appointments, including Teaching or Research Extensions (Supplemental 1) and additional duties (Supplemental 2) and
  4. all actions required by other University policies to be taken by a Budget Administrator.

A Budget Administrator (unless otherwise restricted by the Budget Executive) MAY approve or delegate approval of:

  1. all other expenditure or budgetary actions not restricted above.

Budget Assistant

A Budget Assistant (unless otherwise restricted by the Budget Administrator) may approve the following actions:

  1. expenditure and budgetary actions (documents) UNDER $10,000,
  2. Budget Amendment for Restricted Accounts (BARA), regardless of the dollar amount,
  3. Request for Cash Advance UNDER $5,000

Any other approval rights must be explicitly assigned to the Budget Assistant by the Budget Administrator via the Authorized Approval System or Workflow ROLE form.

Financial Officer

The Financial Officer must, with respect to the relevant unit:

  1. establish appropriate approval paths or approval roles in all administrative systems as determined by this policy;
  2. approve all expenditure, budgetary, and personnel transactions (documents) that directly effect a budget through an encumbrance or an immediate expense that the Budget Executive and Budget Administrator are required to approve (as specified above)
  3. all actions required by other University policies to be taken by a Financial Officer.

Financial Assistant

A Financial Assistant (unless otherwise restricted by the Financial Officer) may approve the following:

  1. Expenditure and budgetary actions (documents) UNDER $10,000 (except budget executive's travel settlements),
  2. Budget Amendment for Restricted Accounts (BARA) regardless of dollar amount.

All other approval rights must be explicitly assigned to the financial assistant by the Financial Officer via the Authorized Approval System or Workflow ROLE form.

MISCELLANEOUS

Self-approval

No approver is permitted to approve a document that pertains to himself or herself. For example, a Budget Administrator may not approve travel settlements for his or her own travel. In such circumstances, an approval must be obtained at the next higher level. A Budget Assistant would defer approval to the Budget Administrator; a Budget Administrator would defer approval to the Budget Executive; the Budget Executive would defer approval to a senior level position (generally the Corporate Controller); a Financial Assistant would defer approval to the Financial Officer; and a Financial Officer would defer approval to the Assistant Controller/Director, University Financial Officers.

Minimum number of approvers

Unless an action (document) is identified as requiring only one approval, all forms must be approved by at least two different individuals. This means that a form requiring a minimum of two approvals cannot be approved by the same individual acting in different capacities. (For example, an action cannot be approved by ABC1 as a delegated approver and by ABC1 as a proxy approver.)

Rubber Stamps and Electronic Signatures

Rubber stamps will be permitted ONLY on duplicate copies of internal University documents. If a stamp is used, it must state that the original document was signed by the individual responsible for the specific document stamped.

No “Signature” stamps or electronic duplicated signatures are permitted on original, paper expenditure, budgetary, or personnel action documents.

Digital Signatures

Digital signatures are permitted for internal University documents only and are not permitted for personnel, budgetary, or financial transactions covered by this policy.

EXCEPTIONS

This policy does not supersede other current policies which may have additional approval requirements.

Any request for an exception to this policy must be submitted in writing to the Corporate Controller for consideration, with specific alternative stated. Entry to the Authorized Approval System or Workflow ROLE form must be submitted for the Corporate Controller’s documented approval.

SANCTIONS AND NON-COMPLIANCE

Approvers are prohibited from giving their UserID or password to another individual that would allow the other individual to access and/or approve any action (document) within the scope of this policy. Doing so is in violation of Policy AD95 Information Assurance and IT Security and Policy AD96 Acceptable Use of University Information Resources. Any Penn State department or unit found to be in violation of this Policy may be held accountable for remediation costs associated with a resulting information security incident or other regulatory non-compliance penalties, including but not limited to financial penalties, legal fees, and other costs.

FURTHER INFORMATION

For questions, additional detail, or to request changes to this policy, please contact the Assistant Controller/Director, University Financial Officers within the Office of the Corporate Controller.

CROSS REFERENCES

POLICY STATUS

Most recent changes:

  • September 5, 2019- Major revisions throughout the policy to reflect changes in roles and process changes due to the implementation of Workday.

Revision History (and effective dates):

  • November 8, 2018 - Subject Matter Expert added.
  • May 22, 2014 - Major revisions throughout the policy to reflect changes in approval amounts and process changes.
  • September 4, 2007 - Editorial changes; changed 'Campus Executive Officer' to 'Chancellor.'
  • April 6, 2007 - Editorial change in “Definition of Terms” section, under Financial Officer and Financial Assistant definitions.  Changed "central accounting and budgeting systems" to "University accounting and budgeting systems," per request of Financial Information Systems and Accounting Operations.
  • June 14, 2006 - Revision History expanded.
  • July 27, 2005 - Editorial changes to the "DOCUMENTATION OF APPROVAL AUTHORITY" section to reflect current operations (removed verbiage stating that cards are "forwarded to Accounting Operations through the Assistant Controller"), and eliminated references to "General Forms Usage Guide" throughout the policy.
  • January 24, 2000:
    • Updated form and IBIS titles throughout policy;
    • Clarified the 'in his or her absence' provision of a Proxy Approver;
    • Indicated that approval identities such as "budget executive" or "budget administrator" are roles;
    • Clarified approval responsibilities of all approvers;
    • added GREQs over $1000 and all ROCR's as an exclusion that does not require FO/Fasst approval;
    • Added prohibition of approvers giving their userID/passwords to others in order to access/approve forms within the scope of this policy;
    • DBAF no longer has special approval levels;
    • Proxy designations should be on-going in nature rather than issued/rescinded each time the authorized approver is absent/present;
    • Under proxy approval section of policy, identified special instance where budget assistants and financial assistants may appear as proxies in EASY approval paths even though they may not assume such a role (this is to resolve a shortcoming in approval paths);
    • Indicated that approval paths may also contain additional individuals not performing official approval roles required by this policy;
    • Because of volatility of changes to other policies, remove references to specific policy exceptions;
    • Revisions to Definitions, Policy, and Types of Approval Authority, indicated by >.
  • November 22, 1994 - Major revisions, and renumbering/relocation from AD17.

Date Approved: 

May 20, 2014

Date Published: 

May 22, 2014

Effective Date: 

May 22, 2014