Financial Authority Policy
Responsibility for policy: Audit and Risk Committee
Approving authority: Council
Last reviewed: August 2015
Next review date: August 2016
- This policy applies to all staff of the University of Waikato.
- The purpose of this policy is to set out:
- the financial authority limits that apply to single transactions for particular categories of staff, and
- responsibilities and accountabilities in relation to financial authorities.
- This policy applies to the purchase and procurement of goods and services and does not apply to academic agreements, research contracts or staff appointments.Financial authorities related to academic agreements are set out in individual academic agreements. Financial authorities related to research contracts are governed by the Handbook on Research and Outside Professional Activities. All staff appointments are subject to the approval of the Director of Human Resource Management.
- In this policy:
budget holder means a person who is responsible for the management of an allocated budget
business-as-usual compliance payment means a payment that is required by law or is necessary to the day-to-day operations of the University, such as payroll, tax, and utilities
capital asset has the meaning defined in the Capital Asset Policy
tender means the process before a purchase, involving the evaluation and selection of a supplier based on the supplier's written offer to supply goods and/or services at an agreed price
transaction means a payment or a commitment to make a payment from one person or account to another (e.g. purchase order)
whole-of-life cost means the total cost, including purchase cost, operating cost, maintenance cost and residual value (where applicable).
- The following documents set out further information relevant to this policy:
- Capital Asset Policy
- Financial Ethics Policy
- Fixed Asset Guidelines
- Governance and Management Guidelines
- Independent Contractor Policy
- Koha, Donations and Sponsorship Policy
- Procurement Policy
- Provision of Computers for Staff and Recycling and Disposal of University Computer Equipment Policy
- Tender Processes Manual
- Travel Policy
- Treasury Management Policy
Legislative and policy framework
- This policy takes account of the Education Act 1989, which includes provisions for Council to delegate its functions and powers and for those functions and powers to be sub-delegated (sections 193(1) and 222(1)), and Council's delegations under its Governance and Management Guidelines.
Financial authority of the Vice-Chancellor
- The maximum financial authority of the Vice-Chancellor for a single transaction is $5 million; any single transaction exceeding $5 million is subject to the prior approval of the Council.
- The Vice-Chancellor must report to the Audit and Risk Committee and Council any single financial transaction of $1 million or more, unless it is a business-as-usual compliance payment (see clause 17 of this policy).
- For any budget category (relevant categories are as set out in the Statement of Financial Performance), the Vice-Chancellor may approve additional operating expenditure of up to 5% or $1 million more than the original operating budget, whichever is larger, provided that he or she is confident that the financial objectives set by Council will be attained (including achievement of budgeted surplus); the Vice-Chancellor must report such approvals to the next meeting of the Audit and Risk Committee.
Financial authorities of budget holders
- The Vice-Chancellor delegates to budget holders financial authorities and responsibilities for managing their respective budget allocations.
- The Vice-Chancellor delegates to budget holders financial authorities for single transactions to the limits set out in Appendix 1 of this policy.
- Budget holders may sub-delegate their financial authorities to another staff member, with a limit that is lower or higher than the limit that would otherwise apply to that staff member, provided that it is within their own limit.
- Any sub-delegations of financial authority by budget holders, including any associated variations to the limits set out in Appendix 1 of this policy, must be formally reported to the Chief Financial Officer.
- Staff designated with approval levels B to D in Appendix 1 of this policy may revoke any sub-delegation within their area of responsibility.
- The limits listed in Appendix 1 of this policy apply to whole single transactions; transactions must not be split to fit within the maximum authority.
- The Vice-Chancellor may review, from time to time, the limits set out in Appendix 1 of this policy; any changes to Appendix 1 approved by the Vice-Chancellor must be reported to the Audit and Risk Committee and Council.
- The Vice-Chancellor delegates financial authorities for business-as-usual compliance payments as set out in Appendix 2 of this policy.
- The Vice-Chancellor may at any time restrict or revoke the financial authority of any staff member or the application of the financial authorities set out in Appendix 1 and Appendix 2 of this policy with respect to any particular staff member, category of staff or transaction type.
- Budget holders must not commit University funds beyond their specified annual budget allocation unless the Chief Financial Officer has first approved the commitment in writing.
- Budget holders with a separate capital budget must not transfer allocations from a capital to an operational budget, or vice versa.
Responsibilities of line managers
- Line managers are responsible for ensuring that their staff comply with this policy.
- Line managers must report any breaches of this policy to the Chief Financial Officer.
Approval of financial commitments
- Staff must not commit University funds beyond the current budget year unless:
- in the case of commitments of up to three years, the commitment has first been approved by the Chief Financial Officer; or
- in the case of commitments of between three and 10 years, the commitment has first been approved by the Vice-Chancellor; or
- in the case of commitments of 10 years or more, the commitment has first been approved by Council.
- Any financial commitment covering a period longer than five years must be reported to the Audit and Risk Committee and Council.
- Any operating expenditure more than 5% higher than the operating budget for the relevant category (relevant categories are set out in the Statement of Financial Performance) is subject to the prior approval of the Audit and Risk Committee and must be reported to the following meeting of Council.
- In accordance with the Procurement Policy, where a preferred supplier contract is not in place for the relevant goods or services, staff who wish to purchase goods or services whose whole-of-life cost exceeds $50,000 must, before proceeding, consult the Chief Financial Officer about the procurement process that is to apply; the procurement process may be required to include a contestable tender process.
- Delegated authorities for particular phases of a tender process are set out in the University's Tender Processes Manual.
Disposal of capital assets
- University capital assets must not be disposed of without the prior approval of the Chief Financial Officer.
- The Chief Financial Officer has authority to write-off any individual financial debt up to $10,000.
- The Audit and Risk Committee has authority to write-off any individual financial debt of $10,000 or more.
- The Chief Financial Officer must report to the Audit and Risk Committee all decisions to write-off financial debt.
- The Chief Financial Officer must report to the Audit and Risk Committee any individual item of capital expenditure valued at more than 5% of the total capital budget, or $100,000, whichever is greater.
Monitoring of financial authorities
- The Chief Financial Officer must conduct annual reviews of all financial authorities to ensure that delegations are appropriately and accurately recorded, and make recommendations to the Vice-Chancellor as necessary.
Responsibility for monitoring compliance
- The Chief Financial Officer is responsible for ensuring compliance with this policy, and is required to report instances of non-compliance to the Audit and Risk Committee.
- Breaches of this policy may result in disciplinary action under the Staff Code of Conduct.