Financial Policies

FN18 University Approval Authorization Policy

Policy Status: 

Active

Subject Matter Expert: 

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

Policy Steward: 

Associate Vice President for Finance and Corporate Controller

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, SIMBA, Shop OnLion, Lion Marketplace, and SAP Concur and complies with the Office of the Corporate Controller mission of providing quality financial, accounting, and information services that foster a culture of responsible stewardship and sound fiscal management of University resources.

SCOPE:

The University’s financial policies are applicable throughout the University, including all direct and indirect subsidiaries, and are required to be followed by all University employees who engage in financial, accounting, purchasing or other transactions, including University employees who in the course of their assigned duties engage in such transactions on behalf of third parties, such as the Penn State Alumni Association or other related entities. The University’s financial policies are not applicable to Penn State Health or its subsidiaries, or to Penn College of Technology, each of which has its own financial policies.

DEFINITIONS:

  • 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 departments within such budget executive's business area. Budget administrators may approve documents in their 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 designated by a budget administrator (with the concurrence of the relevant budget executive and Financial Officer) to approve transactions for one or more departments 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 a business 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. Budget executives may designate others to serve in the budget executive role with approval of the Corporate Controller or their designee.
  • Budgetary transaction - Transactions resulting in a base, one-time or carry-forward transfer or reallocation of funds between/among cost objects.
  • Designated Approver - Any individual authorized to serve in a budget executive, budget administrator, or Financial Officer role with full authority for transaction approval.
  • Expenditure transaction - Transactions resulting in a funds reservation, funds commitments, or expense primarily to the non-personnel portion of a cost object and not personnel or budgetary transactions.
  • Financial Assistant - Any individual designated by a Financial Officer to approve transactions for one or more business areas, 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 designated to a Financial Assistant must be approved by the budget executive and the Assistant Controller/Director, University Financial Officers.
  • Financial Officer - Those individuals who represent the Corporate Controller in the various budget executive business 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 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 employees who are unable to do this themselves.
  • Personnel transaction - Transactions having a direct * effect on positions, appointments, reappointments, terminations, or an employee's gross compensation across all classes of employees, including retirees and contingent workers, or graduate students. These are processed in Workday and follow the rules established in the system for each business process regarding required approvals.
  • Timekeeper - In Workday, this is a security role identified and approved by an HR Consultant 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 designate approval authority to others as outlined in this policy but is ultimately responsible for the proper management and oversight of the operation of the department or business 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 cost objects under their authority, and have a responsibility to assure that all financial transactions posted to these cost objects 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 cost objects 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.

SIMBA uses standard approvals based on the approval roles defined throughout this policy; modification within business areas is not an option. Workday has standard approval authorities for all personnel transactions based on the business process. Multiple transactions may not be processed for the same transaction to avoid the dollar limits established in this policy.

Authorized Approvals:

An individual designated as a budget executive, budget administrator, budget assistant, Financial Officer or Financial Assistant 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 Unit HR or Unit leadership. In SIMBA, FN18 approval roles are requested and approved in SailPoint IIQ, managed by the Office of Information Security, and then assigned in SIMBA.

Designated Approvals:

Individuals designated in any of the budgetary approval roles must have 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 or their designee to assure that the individual in that role has appropriate level of authority within their unit.

Individuals designated in any of the financial approval roles must have knowledge of University policy and a high level of integrity and judgement. Anyone designated for the Financial Officer role must be approved by the Assistant Controller/Director, University Financial Officers.

It is required that all approver roles have at least two people designated in the role. If one person is the primary approver and the other a backup in the absence of the primary approver, communication between them will be critical so that the backup approver knows when/if to take action to approve transactions. All approvers will receive notification that a transaction is awaiting action.

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, Managers have primary responsibility to approve time for the employee. The Timekeeper, however, is an alternate support role that can enter or approve hours for employees within their security purview.

Documentation of Approval Authority:

While this policy defines the authority and responsibilities for those individuals identified as budget executive, budget administrator, budget assistant, Financial Officer, Financial Assistant, 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.

All FN18 approval roles in SIMBA will be documented in SailPoint Identity IQ including the appropriate approvals as listed below:

  • Budget executive authority must be approved by the Financial Officer and the Corporate Controller or their designee.
  • Budget administrator authority must be approved by the budget executive and Financial Officer.
  • Budget assistant 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, and the Finance Data Steward.
  • Financial Assistant authority must be approved by the Financial Officer and 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 updates in the system done by the Workday security central office.

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 Timekeepers within a unit are established and authorized by Unit HR or Unit HR leadership and documented in Workday.

ROLE RESPONSIBILITIES:

Budget Executive:

A budget executive must approve:

  1. all expenditure transactions (Workday and SIMBA) of $100,000 or more,
  2. all actions required by other University policies to be taken by a budget executive

The initiator must attach a document to the workflow showing the budget executive’s approval.

Budget Administrator:

A budget administrator (unless otherwise restricted by the budget executive) must approve and may not delegate approval of:

  1. all expenditure transactions from $10,000 to $99,999 inclusive,
  2. personnel actions in Workday involving all appointments (tenure-track/non-tenure-track faculty and regular staff and limited-term staff (formerly 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
  3. all actions required by other University policies to be taken by a budget administrator.

A document must be attached to the workflow showing the budget administrator’s approval of budget adjustments.

Budget Assistant:

A budget assistant (unless otherwise restricted by the budget administrator) may approve the following actions:

  1. expenditure and transactions UNDER $10,000.

A document must be attached to the workflow showing the budget assistant’s approval of budget adjustments.

Financial Officer:

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

  1. establish appropriate FN18 approval roles in all administrative systems as determined by this policy;
  2. approve all expenditure, budgetary, and personnel transactions that directly affect a cost object through a fund reservation or an immediate expense that the budget executive and budget administrator are required to approve (as specified above); and
  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 transactions UNDER $10,000 (except budget executive’s travel reports)

MISCELLANEOUS:

SIMBA has established workflows for all transactions which are standard for the University, with some approvals required and others conditional. The workflow for each SIMBA transaction is documented in SIMBA documentation.

Self-approval:

No approver is permitted to approve a transaction that pertains to themselves. For example, a budget administrator may not approve travel reports for their own travel. In such circumstances, 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.

Separation of Duties:

An individual cannot be designated as both budgetary and financial approver in the same business area. This means that someone cannot be both a budget assistant and Financial Assistant in the same business area.

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.

Electronic signatures are permitted for University business provided that the signatures are obtained using the University’s approved electronic signature product or the electronic signature product of third parties if routed via secure email. Signatures and signed copies of agreements transmitted by facsimile, email, or other means of electronic transmission are accepted.

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.

SANCTIONS AND NON-COMPLIANCE:

Approvers are prohibited from knowingly sharing their authentication information with other users that would allow the other individual to access and/or approve any transaction 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:

  • November 12, 2021- Major revisions throughout the policy to reflect changes in roles and process changes due to the implementation of SIMBA.

Revision History (and effective dates):

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

December 13, 2021

Date Published: 

December 15, 2021

Effective Date: 

December 16, 2021