Fayetteville Policies and Procedures 330.1
Transaction Approval
Policy
All financial transactions shall follow appropriate approval procedures. Transaction approvals shall follow, to the extent possible, the formal chain of command illustrated in the University’s organization chart.
Purpose
The purpose of this policy is to:
- Ensure complete, accurate and timely managerial review of financial accounting transactions essential to the management of the University.
- Mitigate the risks inherent in delegating approval authority, which include:
-
- Over expenditure of University budgets
- Committing to new fixed costs
- Making expenditures that are not mission-appropriate
- Making expenditures not legal for State entities
- Fraudulent activities
Provide for the separation of duties
Procedures
Transaction approvals will be facilitated using the University’s administrative computing
system on-line application, TARGET (Transaction Approval Review Gateway via Electronic Transmission).
The Office of Financial Affairs is the TARGET application owner providing centralized
administration of the approval function and BASIS desks. The TARGET Administrator,
in the Office of Financial Affairs, will have the responsibility of establishing review
chains, managing desk assignments, creating emergency proxy and alternate authorizations,
and providing user training. Contact information is available on the Financial Affairs
web site.
Materiality thresholds established by each BASIS application owner and approved by
the Vice Chancellor for Finance and Administration are listed at the end of this policy.
The transaction approval chains will include the Vice Chancellor, Dean, Director or
Department Head as Primary Reviewer. Although these personnel are strongly encouraged
to personally review transactions, Primary Review responsibility may be delegated
to an appropriate employee in consultation with the Office of Financial Affairs. To
supplement the normal chain of approval, each Primary Reviewer on a material review
chain may designate an Alternate Reviewer. The Alternate Reviewer must have BASIS
application access and appropriate reviewer training. The Alternate Reviewer should
be in a position appropriate for that responsibility and should also be selected in
consultation with the Office of Financial Affairs.
Proxies may be established to allow appropriate persons, other than the Primary Reviewer,
to approve transactions below the materiality thresholds. All proxy requests will
be routed through the Financial Affairs Office for final approval. Proxies will systematically
expire when either the person assigning or receiving the proxy leaves his or her position
or ceases to be employed by the University. Proxies must hold a position at pay grade
13 or higher. Exemptions from this guideline include primary reviewers and their proxies
whose placement on review chains relates to the central administrative functions,
as well as all other non-required reviewers.
A minimum of two persons must be involved in the initiation and review of all TARGET financial
transactions. Regardless of who initiates a transaction, no single person may perform
all review steps unless there is only one required review step.
Temporary emergency Alternate Reviewers and proxies may be established by the TARGET administrator
upon receipt of a signed request form submitted by an appropriate administrator. In
accordance with the University of Arkansas Code of Computing Practices Section III(C)(4), system passwords should not be shared.
Materiality thresholds are as follows:
Business Affairs
Requisitions - $10,000
UPAYS – (Direct Payments) - $500
Human Resources
New Hires - $35,000
Promotions/Position Changes - $35,000
Salary increases resulting in salary levels of $35,000 and above
Financial Affairs
Internal Invoices - $25,000
Funds Transfers - $25,000
Expenditures - $25,000
Journal Entries – All transactions are material
Reformatted for Web April 3, 2014
Revised August 18, 2010
Revised October 22, 2009
Revised January 3, 2008
Revised July 23, 2003
July 9, 2001
July 1, 2000
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