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Financial Accountability Guide

This guide provides basic information about maintaining individual accountability in a financial process, and the important role it plays in helping to maintain a strong, effective departmental financial control environment. Understanding and applying the information provided in this guide, along with having good separation of duties and effective transaction review and approval steps, will reduce the risk of errors, misappropriations, and fraud in departmental financial processes.

Ensuring that each position assigned a key role in a departmental financial process is filled with the right person given the appropriate accountability helps to ensure that the process will be properly performed.

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  • What is financial accountability

    Financial accountability results from holding an individual accountable for effectively performing a financial activity, such as a key control procedure within a financial transaction process. A well-defined financial accountability structure serves as the foundation for establishing effective financial processes.

    • Accountability is officially delegated from a governance group, such as the Regents, or from an individual having delegated authority to a specific individual
    • An individual accountable for the successful completion of a key control procedure may, as policy allows, assign the responsibility, but not the accountability, for completing the procedure to another qualified individual.

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  • University's financial accountability structure

    Delegations of authority provide the means to ensure financial accountability at each key stage of a campus financial process.

    • The Board of Regents is accountable for the successful operation of the processes and activities supporting the University’s strategic mission.
      • 2004 “Statement of Expectations of the Members of the Board of Regents – Guidelines for Discharge of Regental Duties”: “The responsibility of individual Regents is to serve as trustees for the people of the State of California and as stewards for the University of California, acting to govern the University in fulfillment of its educational, research, and public service missions in the best interests of the people of California.”
    • The Board of Regents delegate some of its authorities to the President of the University and other Officers of the Regents to implement and maintain policies and processes that enable the University to achieve its main objectives.
      • Standing Order of the UC Regents 100.4.n.3 - “The President (of the University) is authorized to permit expenditures against contracts, grants, and gifts, or against firm commitments thereon, provided that the contracts, grants, and gifts have been solicited or negotiated in accordance with established Regental policy.”
    • The President redelegates some of his or her authority to the Chancellors and other senior University officials to establish local business policies and procedures at their respective locations.
      • 1980 UC Presidential Delegation of Authority DA 0666 from the President to the Chancellors – “I am hereby delegating to you the authority to permit expenditures or commitments of funds against any approved research, training, or development contract or grant when a fully executed contract is in hand or a written notice of grant award has been received...”
    • Chancellors redelegate some of their authority to campus managers and others to establish processes and procedures for conducting the activities and approving the financial transactions needed to successfully operate the campus.
      • The Chancellor approves a UCSC Manual Signature Authorization and Approval Form (PDF) authorizing the Dean of Physical and Biological Sciences (PBSci) to approve expenditures on a range of PBSci organization codes, including many of which involve contract and grants.
    • Campus managers further redelegate some of their authority to selected individuals they supervise to approve the financial transactions needed to successfully conduct campus business.
      • The Dean of PBSci approves a UCSC Manual Signature Authorization and Approval Form authorizing a PBSci Principal Investigator to approve expenditures on an organization code associated with the PI’s research project grant.

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  • Financial process accountability

    A delegation of authority enables an individual to perform a particular activity, or procedure, at a key stage of a financial process.

    • Different individuals are usually delegated the authority to handle different activities in a financial process.
    • Each individual is accountable for successfully completing his or her assigned activity.
    • Most financial activities involve processing a financial transaction in conformity with the seven campus transaction control standards.
      (Examples of financial transactions include purchase requisitions/requests, purchase orders, invoice payments, expense reimbursement requests (direct payments), equipment inventory modification requests, and transfer of expenses or funds.)

    (Refer to Appendix for more information about the seven standards.)

    Here are the key stages of a typical financial transaction process:

    Stage Description Examples
    Transaction initiation Accurately initiating a financial transaction through an automated system, such as the Financial Information System (FIS) or CruzBuy.
    • Requisition request
    • CruzBuy requisition input
    • FIS direct payment input
    • Request for ledger adjustment
    Transaction approval Reviewing and approving a transaction for appropriateness, validity, reasonableness, adequate funding, accurate accounting coding, and appropriate supporting documentation.
    • CruzBuy requisition approval
    • Travel reimbursement approval
    • FIS direct payment approval
    • Ledger adjustment approval
    Transaction verification Certifying that the approval provided on a transaction form is that of an authorized approver.
    • FAST Office “Second Tier” approval
    Post-transaction review Certifying that a processed financial transaction appearing in an official campus financial record is appropriate, valid, reasonable, adequately funded, and accurately coded.
    • Monthly ledger review certification
    • Biennial equipment inventory certification

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  • Delegating authority

    A University business policy usually specifies the position(s) accountable for carrying out the policy’s requirements and the extent to which the accountability may be redelegated to other individuals.

    • A delegation of authority must be officially recorded and approved.
    • The individual delegating authority is expected to:
      • Not delegate more authority than what he or she possesses, or is officially given the authority to delegate.
      • Periodically review delegations of authority for continued relevancy and proper functioning.
    • An individual receiving a delegation of authority must be:
      • Capable and qualified.
      • Properly trained to effectively carry out the function that he or she is accountable for handling.
      • In a position to perform the function without fear of being countermanded.

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  • Ways of making a delegation of authority

    Type of authority(function) being delegated Form used to delegate authority Limitations on delegation of authority
    Standard financial processes
    • Procure goods and services
    • Expend funds
    • Approve ledger adjustments
    UCSC Manual Signature Authorization and Approval UCSC Usually limited to certain accounting organization codes and to a dollar limit
    Specialized financial processes
    • Purchasing card
    • Corporate Travel System card
    Process-specific user application form Usually limited to certain accounting organization codes and to a dollar limit
    Financial systems access
    • Financial Information System
    • Payroll Personnel System
    • CruzBuy
    System-specific user application form Usually limited to certain accounting organization codes and to a dollar limit
    Approver verification processes
    • Expense reimbursements
    • Vendor payments
    FAST Divisional / Department Accountability Agreement None
    Temporary delegation
    • Vacation or sick leave
    • Leave of absence
    Memorandum from supervisor to individual receiving delegation Usually limited to certain accounting organization codes, to a dollar limit, and/or to specific financial management functions

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  • Documenting accountability

    Each financial transaction must have an audit trail, enabling the identification of the specific individual handling the transaction at different stages of the process.

    • Each transaction must be traceable from its appearance in official campus records back to source documents, paper or electronic, originating the transaction.
    • The individual accountable for processing the transaction at each key stage of the process must be identifiable.
    • Individual accountability must be documented. Here are some examples of how accountability might be documented:

    Stage Typical Documentation Examples
    Transaction initiation
    • Initiator’s system user identification associated with the initiation of a transaction
    • Requisition request
    • Cruzbuy requisition input
    • FIS direct payment input
    • Request for ledger adjustment
    Transaction approval
    • Approver’s signature on a paper form indicating approval of transaction
    • Approver’s system user identification associated with an on-line approval of the transaction
    • Cruzbuy requisition approval
    • Travel reimbursement approval
    • FIS direct payment approval
    • Ledger adjustment approval
    Transaction verification
    • Verifier’s signature on a payment request form
    • FAST Office “Second Tier” approver process
    Post-transaction review
    • Certifier’s signature on a log, document page, or form
    • Certifier’s system user identification associated with accessing on-line campus records
    • Ledger review certification in review log
    • Purchasing card certification on form
    • Equipment inventory certification on form

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  • Where to get help

    Assistance with your financial accountability questions is available from the Campus Controller’s Office.

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  • Relevant Appendices

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