- Approval Authority Levels for Commitments and Expenditures
- Operating Units
New York State law vests the authority for management of the institute in the Board of Trustees. Accordingly, the Board of Trustees in the RIT Bylaws (Article XIX, Section 3) provide that:
"The President shall be the chief executive officer of the Institute with the powers and duties of supervision and management usually pertaining to this office. He shall have authority and responsibility concerning the educational activities of the Institute and its employees and students. The President, or his designee, shall have the authority to sign contracts and documents in the name of the Institute, except to the extent such authorization is restricted by the Board of Trustees......"
With respect to the Vice Presidents, the Bylaws (Article XIX, Section 4) provide that:
"The Vice Presidents shall be administrative officers of the Institute with such powers and duties as are delegated to them by the President."
The aforementioned resolution reflects the concept that the Board of Trustees delegates authority in a broad way so that management may delegate the authority for efficient but controlled operation of the business.
Agreements between the Institute and external entities in which the Institute provides goods, services, or other deliverables in return for consideration, as well as sponsored research grants without deliverables, are commitments that bind the Institute. In general, they must be executed by an Officer of the Institute. This is designed to ensure that external engagements are consistent with the goals and objectives of the Institute, are priced adequately and correctly, and do not expose the Institute to unacceptable financial or legal risks.
The broad authority granted by the Board of Trustees has been refined through more specific delegations of authority from the President as set forth in this policy, by other policy pronouncements, and by other specific Articles of the Institute Bylaws. Each Division must jointly adopt practices and procedures that fit within the framework of these Institute policies.
- Defines the monetary thresholds for approval authority for transactions which commit or expend Institute funds.
- Sets forth principles for guidance to operating units in implementing approval authority practices and procedures.
- Specifies those decisions requiring institutional approval.
Approver - Institutional representatives with the authority to administer, approve, and execute financially-related transactions.
Operating Unit - There are seven operating units within the Institute. See Page 6.
Transaction - Any act which binds or commits the Institute. This may or may not involve spending or receiving funds. The size of a transaction is its collective amount over the entire period of commitment.
Institution - Rochester Institute of Technology.
Officer of the Institute - The President and Vice Presidents of the Institute.
You - The person entering into a transaction on behalf of the Institute.
Expenditure - Disbursements of cash. There are a variety of payment mechanisms: check requests, expense reports, advance requests, invoices that are approved and then automatically applied against existing purchase orders, i.e. releases against contracts.
Commitments of funds - while the end result is the same as an expenditure, commitments include entering into contracts, letters of intent, or other obligations that legally bind the Institute. This includes contracts for specific dollar amounts as well as any documents used to provide approval prior to expending funds (i.e. purchase requisitions, purchase orders) for these commitments.
- The approval signature on a commitment or a specific expenditure is a representation by the approver that the transaction is:
- In full compliance with Institute policies
- Necessary to meet business objectives
- Reasonable and accurate
- Adequately documented
- The President is authorized to approve all expenditures and commitments of the Institute and its subsidiaries with the exception of transactions requiring Board of Trustee approval. The Provost exercises the powers and duties of the President during the absence of the chief executive.
- The chart on page 5 defines the approval authority dollar levels for the Vice Presidents. The only limitations to the approval authority levels are existing Institute policies which define transactions that require institutional staff review prior to finalization. These policies are summarized on pages 3 and 4 and are included among the policies listed in the "References" section of this policy. It is the responsibility of the operating unit management to ensure that any transactions covered by such policies have been forwarded for review and have been approved by the appropriate institutional staffs. The purpose of the institutional staff review is not to circumvent or minimize individual approval authority but rather to ensure that the proposed transaction has had the benefit of Institute staff input in technical areas (e.g. tax and accounting) and is consistent with total Institute strategy prior to its being finalized.
- Employees cannot commit funds or approve their own expenditures. Approval should always be obtained from the next higher level of management. Requisitions and/or request for payments require a requester (usually the final recipient of the product or service) and an approver.
- Checks over $50,000 require the approval of two levels of management which have sufficient delegated authority.
- Subject to the requirements and limitations of this policy the Institute's Vice Presidents can define the approval levels for expenditures and commitments initiated in the ordinary conduct of business within their divisions.
- Approval authority exists only to the extent that is explicitly granted to such employee from more senior management. This delegation must ensure that adequate review and signatory approval procedures are in place.
- A written plan for the delegation of approval must be completed and provided to the Provost or Vice President, Finance and Administration or their designees for review and approval.
- The actual approval authority needs of an employee should be what governs the dollar amount granted to such employee.
- An individual may delegate only the approval authority already granted to him; delegations can be made only to Institute employees. Delegations of 100% of an individual's approval level must be approved by a level of management above the level which is delegating the authority.
- During a temporary absence, and in the absence of written delegation of authority, approval must be obtained from the next higher management level within the same chain of delegation.
- Under no circumstances should approval be given at any level for expenditures or commitments of funds that are at variance with the letter or spirit of existing laws or that in any way would be considered a violation of the Institute's traditionally high business standards.
- The individual who approves any transaction which constitutes a commitment between the Institute and a non-Institute party is responsible and accountable for ensuring that:
- He or she has the authority to approve the transaction or execute a contract.
- Where required, institutional review and approval has been obtained before any commitment is made.
- Where appropriate, an assessment has been made of the likely impact of the transaction on other elements of the Institute and the broader community; and appropriate consultation has taken place with any constituencies which might be impacted by the transaction or contract.
- The transaction, proposal or agreement includes the appropriate standard provisions recommended by RIT legal counsel or, in the absence of such language, approval from an Institute officer has been obtained.
- Funds for the transaction have been allocated or are otherwise available within regularly approved budgets, special appropriations, or restricted or designated accounts.
- There is no real or apparent conflict of interest on the part of the approving individual or any other individual or organization involved in the transaction.
- Where a real or apparent conflict of interest does exist, the issues are resolved prior to entering into the transaction or contract as provided for by the Institute's Conflict of Interest Policy, Conflict of Interest Policy pertaining to Externally Funded Projects, and the Conflict of Interest provision of the Bylaws.
Operating Unit responsibility
- Document the approval authorities for all levels and functions within the organization and ensure that required approvals have been obtained.
- For all operating units, ensure that the approval authorizations for each individual have been submitted to the Controller's Office.
- Ensure that procedures are in place to update approval authorizations with the appropriate functions for any personnel or organization changes, including terminations, that occur within the organization.
- Develop an internal control management process that includes inspecting disbursements for compliance with operating unit direction and reviewing the approval authority delegations to ensure they are still applicable to the needs of existing employees and that they conform to the guidelines set forth by the operating unit. Any exceptions should be referred to the Director of Business Process and Audit for consultation and resolution.
- These guidelines are designed to address transactions that occur in the normal course of business. Transactions or expenditures that are normally accumulated for approval should not be separately approved to avoid a higher approval level.
- Questions concerning the interpretation of this policy and its application in specific situations should be forwarded to the Controller/Treasurer.
Institute Bylaws or Institute policies that restrict approval authority or require Institute concurrence:
Security Transactions - (BIT Bylaws, Article XI, Section 2)
Delegates power to direct the sale, exchange, transfer or delivery of any securities of the Institute to the Finance Committee. Any securities transactions not executed pursuant to delegation of investment authority to an investment advisor, shall be signed by the Vice President for Finance and Administration acting alone, or by the Controller (or Assistant Controller) and any member of the Finance Committee, acting together.
Gift Instruments - (RIT Bylaws, Article XIII, Section 3(c)(ii))
The Finance Committee is given the power to accept on behalf of the Institute, gifts, bequests and devises, pass appropriate resolutions regarding same and authorize the execution of any instrument necessary or proper in connection with such acceptance. The Development Subcommittee of the University Relations Committee of the Board considers, advises and recommends concerning gift instruments and programs.
Relationships with Investment Advisors (RIT Bylaws, Article XI, Section 3(ii))
Delegates the power to select and approve the terms of contracts with investment advisors to the Endowment Subcommittee of the Finance Committee.
Relationships with Independent Auditors (RIT Bylaws, Article XVI, Section 2)
The full Board of Trustees selects the independent outside auditors of the Institute, following recommendations from the Audit Committee of the Board.
Banking Relationships (Banking Resolution dated June I, 1993)
Delegates authority for opening and closing bank accounts and security accounts.
Borrowing Transactions (Banking Resolution dated June 1, 1993)
Delegates authority to borrow money under existing lines of credit up to five million dollars to any two of the Chairman of the Board, the President, the Vice President for Finance and Administration and the Provost acting together.
Retention of Legal Counsel
Unless specifically authorized by the President or Vice President for Finance and Administration, no law firm or attorney may be retained to either, a) perform any services for the Institute (other than teaching as faculty), and/or b) be paid from any account of the Institute except as done in writing by the Vice President for Finance and Administration. The Vice President for Finance will, through written delegation, provide various officers of the Institute authority to retain counsel for limited purposes. In no instance can anyone other than the Vice President for Finance and Administration waive Conflict of Interest provisions affecting legal services.
|Level||Dollar Level ¹,²|
|President||See Note ³|
|Senior Vice President for Enrollment Management||$500,000|
|Senior Vice President for Finance & Administration||$6,500,000|
|Vice President & Dean for NTID||$250,000|
|Senior Vice President for Student Affairs||$100,000|
|Vice President for Development and Alumni Relations||$100,000|
|Vice President Research||$100,000|
|Vice President for Government & Community Relations||$60,000|
|Vice President for Special Projects||$60,000|
¹ Dollar level is defined as up to and including amount shown for transactions within the scope of responsibility.
² Excludes transactions with restrictions under Bylaws or Institute policies.
³ Approves anything above the authority level of the Vice President.
- Office of the President
- Office of the Provost and Academic Affairs Division
- Enrollment Management & Career Services Division
- Finance & Administration Division
- National Technical Institute for the Deaf
- Student Affairs Division
- University Relations Division
- RIT Bylaws
- Conflict of Interest Policy - Personnel Policies 6.17
- Conflict of Interest Policy Pertaining to Externally Funded Programs - Institute Policies 6.40