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Local Expenditure Limits/Approval Authority Team Report to the Steering Committee
October 1, 1997
Team Members
Tim Gillet, Assistant Vice President for Finance and Comptroller
Bill Randolph, Associate Dean for Finance, School of Medicine
Ken Sinarski, Associate Comptroller, Accounting Operations
Sheila Woods, Manager, Accounts Payable
Nancy Pace, Accounting Manager, School of Medicine
Terry Butler, Assistant Manager, Accounts Payable
Myrtle Kidd, Fiscal Technician, Accounts Payable
Katie Thornsvard, Management Intern, School of Medicine
Introduction
In the Spring of 1997, a UVa. Process Simplification team was created
to examine policies regarding Dean/Vice President signature requirements
on vouchers for meals, lodging, flowers and gifts. It was found that
there is not a clear understanding in the University community of the
types of expenditures and the dollar amounts which necessitate Dean/VP
approval on these vouchers. In addition, the expenditure limits in each
category are very low, such that a high proportion of the vouchers are
considered "exceptions" and, therefore, require Dean/VP approval.
The goal of this team was to suggest ways to reduce the number of vouchers
sent to Deans and Vice Presidents for approval and, at the same time,
insure reasonable control over the amount of money being expended for
these purposes.
Background
Team members conducted a thorough review of all University policies
and procedures related to meals, lodging, flowers and gifts. This review
revealed that signature requirements vary depending on the:
- Source of funds (state or local)
- Dollar amount spent (was it over state or local guidelines?)
- Purpose (was a meal consumed while traveling, interviewing, fundraising,
etc.)
- Location (out-of-state, in-state, on grounds, off grounds)
- Meal service (catered or not catered)
- Number of people attending
- Special circumstances of the expenditure
This variety of "expenditure scenarios" inevitably leads to confusion and
inconsistency in determining the level at which to solicit additional
approval.
Team members then reviewed invoices which had already been approved at the Dean/VP
level and processed through Accounts Payable. It was discovered that,
in many cases, the Deans and VPs had been asked to approve the vouchers
simply because the approval requirements for a particular "expenditure
scenario" were not known. In actuality, the invoices could have
been approved at a lower organizational level (e.g., at the departmental
level). Clearly, it is not cost efficient for Deans and Vice Presidents
to spend their time approving such routine expenditures.
Recommendation
In order to reduce Dean/VP signature requirements for expenditures using
local funds, the team proposes the following measures:
1. Increase the dollar limits for local fund purchases (ledgers 4, 6,
and 8) of meals, lodging, flowers and gifts (for retiring or departing
employees). The University has flexibility in setting policy for expenditures
paid from local funds. Current limits are low, resulting in a large
number of "exceptional" vouchers requiring Dean/VP approval.
| Item
|
Current Limit
|
Proposed Limit
|
Purpose Restriction
|
| Lodging |
$150/$200 |
$250 per day (including all taxes) |
Business trip or conference lodging |
| Meals |
Variable |
$110 per person per day (No meal to exceed $65; must have receipts for all meals exceeding $24.99) |
Business-related meals |
| Gifts |
$50 |
$400 |
Gifts for retiring employees or employees/students leaving University service; Development Office gifts to current and prospective donors |
| Flowers |
$25 |
$100 (including delivery) |
Death/hospitalization of employee or member of employee's immediate family |
Note: Thelocal fund limits recommended above for lodging and meals are inclusive
of any dollar amounts permitted on state funds.
Deans and Vice Presidents may impose lower local fund limits within their operating
units. If they choose to set lower limits, the policy must be clearly
communicated to affected employees and adherence must be monitored by
the operating unit.
Decision Point: Will the increased/proposed local limits be the maximum amount
allowed for these types of expenditures (gifts, lodging, flowers,
and meals) or will higher limits be permitted with Dean/Vice President
approval?
2. Remove
the length of service condition (5 years) on gifts for employees/students
leaving the University.
Decision Point: Can gifts be purchased with local funds for purposes other
than those outlined above (e.g., Secretary’s Day)? If so, what
level of approval must be solicited (department or Dean/VP level)?
3. Delegate signature authority to a lower organizational level. As long as the
expenditure does not exceed the increased local limits (see #1 above),
Dean/VP approval would not be required. With increased local limits
and delegated signature authority, Deans and Vice Presidents would only
have to approve truly exceptional expenditures. In addition, Deans and
Vice Presidents would know that vouchers presented for approval would
need a thorough review because the expenditures would truly be "exceptional".
4. Eliminate the various "expenditure scenarios" to create consistent policies
within major categories. For example, the meal limit would be $110 per
person per day regardless of the special circumstances of the expenditure
(e.g., location, purpose, catered/not catered, number of people attending
event, etc.). |
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