FOUNDATIONS IN UNIVERSITY FINANCE FINANCIAL POLICIES

Transcription

1 FOUNDATIONS IN UNIVERSITY FINANCE FINANCIAL POLICIES

2 Financial Policies Anna Jensen University Chief Accountant Participant Outcomes Develop a general awareness of university policies and how to locate them Consider key financial policies that guide us in our day-today work as stewards of university funds I N D I A N A U N I V E R S I T Y 1

3 Policy Basics Establishing University Policies (Policy No. UA-08) 1. Establishes a standard Policy Setting Process 2. Refers to a standard template 3. Establishes authority for approving policies 4. Requires a workload analysis for policies 5. Creates a protocol for local policies 6. Requires a review procedure for active policies I N D I A N A U N I V E R S I T Y 2

4 Policy Basics Are policy and procedure the same thing? No. A procedure is an established way to accomplish a task, and complies with policy. I N D I A N A U N I V E R S I T Y 3

5 Policy Basics Where do policies come from? I N D I A N A U N I V E R S I T Y 4

6 Policy Basics Originating department identifies a need for a policy and creates a draft. Congratulations: A policy is born! Approved locally and routed to the Policy Advisory Council (PAC) for review. Posted for 30 days on policy website where feedback is solicited. Approved by final authority at the Vice President level or above. Posted as approved on the university policy website and distributed widely to all key stakeholders. I N D I A N A U N I V E R S I T Y 5

7 Yep! There s a policy for that.. Protection of Old Growth Forests (FIN-PUR-10.1) Use of Aircraft on University Business (FIN-INS-09) Native American Grave Protection and Repatriation Act (NAGPRA) Policy (RP ) Animals in Buildings (FIN-INS-11) Christmas Tree Regulations (FIN-INS-16) Reducing Text Messaging While Driving and Performing Work under Federal Grant or Contract (RP ) Unmanned Aircraft (Drones) (PS-05) I N D I A N A U N I V E R S I T Y 6

8 Navigating the Policy Seas I N D I A N A U N I V E R S I T Y 7

9 Navigating the Policy Seas University Policy Categories Academic, Faculty & Student (107) Administration & Operations (25) Financial (166) Human Resources (98) Information & IT (15) Research (33) I N D I A N A U N I V E R S I T Y 8

10 Navigating the Policy Seas Financial Policy Categories Accounting Administration (57) Budget Administration (9) Licensing and Trademarks (1) Payroll Administration (22) Purchasing (35) Insurance, Loss Control and Claims (21) Travel (3) Treasurer s Office (13) Other Related Financial Functions (5) I N D I A N A U N I V E R S I T Y 9

11 Financial Policies VPCFO Why financial policies? Safeguard university assets Compliance with external regulations Create internal controls Protect reputational risk Provide guidance I N D I A N A U N I V E R S I T Y 10

12 Financial Policies VPCFO What assets are we safeguarding? I N D I A N A U N I V E R S I T Y 11

13 Financial Policies VPCFO What external regulators are we complying with? IRS OMB Uniform Guidance (Federal) Fair Labor Standards Act (Federal) GASB State/local Others I N D I A N A U N I V E R S I T Y 12

14 Anatomy of an IU Policy Policy Title and Number Policy Owner Key Policy Contact Standard Policy Components I N D I A N A U N I V E R S I T Y 13

15 Anatomy of an IU Policy, cont. Official Policy Statement Related Information I N D I A N A U N I V E R S I T Y 14

16 Policy Interpretation Whom do I Call? Fiscal Officer RC Fiscal Officer Campus Business Officer Policy Owner I N D I A N A U N I V E R S I T Y 15

17 Standard Operating Procedures I N D I A N A U N I V E R S I T Y 16

18 Policy Interpretation Other Tools: Standard Operating Procedures Capital Asset Management Example: I N D I A N A U N I V E R S I T Y 17

19 Policy Wars! I N D I A N A U N I V E R S I T Y 18

20 Key Financial Policies Financial Management Services I N D I A N A U N I V E R S I T Y 19

21 Key Financial Policies We Will Cover Today Fiscal Misconduct: 1. Fraud (FIN-ACC-I-10) 2. Fiscal Misconduct (FIN-ACC-I-35) 3. Inappropriate use of university funds (FIN-ACC-I-330) Appropriate use of Funds: 1. Donations and Contributions to Other Entities (FIN-ACC-I-80) 2. Allowable Hospitality Expense (FIN-ACC-I-50) 3. Gifts to Employees or Non-Employees (FIN-ACC-I-590) 4. Drawings, Games, and Prizes (FIN-ACC-VII-4) 5. Mobile Devices and Internet Access (FIN-ACC-I-480) I N D I A N A U N I V E R S I T Y 20

22 Key Financial Policies We Will Cover Today Institutional Controls: 1. Role of Fiscal Officer (FIN-ACC-I-1) 2. Ranking of Fiscal Officer Account Supervisor, Account Manager, and Delegation of Signature Authority (FIN-ACC-I- 10) 3. Signature Authority and Delegation (FIN-TRE-VI-100) 4. Preservation and Destruction of Public Financial Records (FIN-ACC-I-110) 5. Financial Sub-Certification (FIN-ACC-I-510) 6. Internal Controls (FIN-ACC-I-470) I N D I A N A U N I V E R S I T Y 21

23 Fraud (I-35) Employee Termination, Legal Action and Restitution Employee Responsibility to notify Internal Audit or Campus Police Failure to notify could result in employee termination I N D I A N A U N I V E R S I T Y 22

24 Fiscal Misconduct (I-30) Employee Disciplinary Action or Termination Employee Responsibility to notify Internal Audit and the RC Fiscal Officer Failure to notify could result in employee disciplinary action or termination I N D I A N A U N I V E R S I T Y 23

25 Inappropriate use of Funds (I-330) Is it reasonable? Is it appropriate? Is the use of the funds recorded correctly? Be aware of our duty to exercise prudence with state and federal funds, as well as student fees. If unsure, contact your campus business officer or FMS. I N D I A N A U N I V E R S I T Y 24

26 Fraud, Fiscal Misconduct, Inappropriate use of Funds What if I m pressured by my supervisor to use university funds inappropriately? Contact your Fiscal Officer Contact your Dean or Department Head Contact Chief Accountant or University Controller (FMS) Contact your RC Fiscal Officer Contact your Campus Business representative Contact Internal Audit, if fraud suspected I N D I A N A U N I V E R S I T Y 25

27 Fraud, Fiscal Misconduct, Inappropriate use of Funds No! Could I suffer an retribution if I disclose inappropriate behavior? No! We have a policy for that: Whistleblower Policy (UA-04) Protects employees who make good faith disclosures or suspected wrongful conduct. Also protected under Indiana Code Policy states that employees cannot be compelled by a supervisor or university official to violate law or university policy. Documents procedures for making disclosures. I N D I A N A U N I V E R S I T Y 26

28 Donations to Other Entities (I-80) Prohibits making donations to other entities with university funds. (e.g., American Heart Association) Follows Federal Cost Accounting requirements under OMBs Uniform Guidance, related to direct and indirect federal dollars. I N D I A N A U N I V E R S I T Y 27

29 Gifts to Employees or Non-employees (I-590) If you were just thinking then this policy is for you: I-590 prohibits purchasing gifts with university funds of any kind to any individual, including employees and those contributing to the academic mission. I N D I A N A U N I V E R S I T Y 28

30 Gifts to Employees or Non-employees (I-590) Gifts may be purchased for individuals using Indiana University Foundation (IUF) funds under the following circumstances only: Retirement gifts ($400 or less). Gifts to NON-employees contributing to the academic mission ($600 or less). Gifts must be tangible personal property and cannot be cash, gift cards, travel certificates, etc. Gifts provided to a foreign individual may have additional tax consequences. Fun Fact: CBS News: 2014 Oscars' [celebrity] gift bag has $80,000 worth of swag I N D I A N A U N I V E R S I T Y 29

31 Drawings, Games and Prizes (VII-4) Applies to university departments and registered student organizations. Only IU Foundation Funds can purchase prizes (exception for auxiliary units) Prizes and awards given in a drawing to encourage participation in an event are allowed, if: the value of any prize offered does not exceed $300. the total value of all prizes offered at an event does not exceed $900. I N D I A N A U N I V E R S I T Y 30

32 Drawings, Games and Prizes (VII-4) Prohibits Raffles (sale of tickets) Bingo/Poker or similar games Prize is TAXABLE to the individual winner (requires appropriate forms within 10 days of prize distribution). Does not apply to research participants taking place in research studies. See Policy RP I N D I A N A U N I V E R S I T Y 31

33 Allowable Hospitality Expenses (I-50) Purpose: Intended to prevent hospitality expenditures on federal grants and contracts, which are unallowable under federal regulations per OMBs Uniform Guidance. Exercise due care with use of state and federal funds, as well as student fee revenue. I N D I A N A U N I V E R S I T Y 32

34 Allowable Hospitality Expenses (I-50) What is allowable with university funds? Hospitality must be: Necessary Appropriate to the occasion Reasonable in amount Serve a bona fide university purpose NO champagne fountains or alcohol of any kind! I N D I A N A U N I V E R S I T Y 33

35 Allowable Hospitality Expenses (I-50) More specifically, hospitality is allowed under the following circumstances: Conferences and workshops where registration fees are charged Auxiliaries and externally funded 23* accounts for promotional activities Student activity fee accounts Contracts and grants, ONLY if allowable per the grant or contract Recruitment of faculty, staff, student Official ceremonial functions of the university I N D I A N A U N I V E R S I T Y 34

36 Allowable Hospitality Expenses (I-50) (continued): Student receptions Employee recognition ceremonies Training sessions provided by HR or outside consultants Meals for employees and outside reviewers for accreditation or peer reviews Meals for individuals contributing to the intellectual life of the university (lecturers, etc.) Meals or refreshments for formally organized departmental or organization meetings (must be ½ day in duration) I N D I A N A U N I V E R S I T Y 35

37 Allowable Hospitality Expenses (I-50) A few final notes on hospitality: Requires use of special object codes (see policy) Hospitality is never allowed on Recharge/Service Center accounts (66* accounts). Most hospitality CAN be purchased using an Indiana University Foundation account. I N D I A N A U N I V E R S I T Y 36

38 Mobile Devices and Internet Access (I-480) Must be necessary and add value to the unit Reimbursement through additional pay for mobile phone and long-term internet access (TAXABLE to the employee) No direct payment allowed, even with IU Foundation funds Dollar limits on reimbursement ($150 for mobile; $100 internet) Annual review and approval required of organizational leader Employee must comply with the university IT-12.1 Mobile Device Security Standards I N D I A N A U N I V E R S I T Y 37

39 Role of Fiscal Officer (I-1) Policy I-1 defines the responsibility of each of the following: Executive Management: Ultimate responsibility for the fiscal integrity of all accounts assigned to their organization. Does not necessarily have a role assigned in the financial system. Account Supervisor: Leadership role assigned to an account in the financial system. Provides leadership, oversight and management philosophy to manage funds in accordance with organizational objectives. Ensures that Fiscal Officer has the education and training to perform assigned functions. Account Manager: Ensures that funds are spent and managed in accordance with organizational objectives and the budgeted plan and that the allocation of expenditures is appropriate to the function identified for the account. Fiscal Officer: Provides daily oversight of funds; ensures funds are spent in accordance with fiscal policy, budget and are in alignment with the account purpose; safeguards assets; reconciles accounts on monthly basis; signature authority on all financial transactions, which may be delegated by the fiscal officer. I N D I A N A U N I V E R S I T Y 38

40 Role of Fiscal Officer (I-1) Policy I-1, other key considerations: Defines an RC Fiscal Officer Establishes Fiscal Officer Responsibility: Transactional integrity Budget preparation Cash controls Compliance assurance for institutional policy, state, federal and sponsoring agency regulations. Records retention I N D I A N A U N I V E R S I T Y 39

41 Ranking of Fiscal Officer, Account Supervisor, Account Manager and Delegation of Signature Authority (I-10) Fiscal Officer, Account Supervisor or Account Manager must be an exempt employee. Delegate of Signature Authority can be an exempt or nonexempt employee. I N D I A N A U N I V E R S I T Y 40

42 Signature Authority and Delegation (FIN-TRE-VI-100) Board of Trustees resolution Powers of the Treasurer, June 21, 1991: Only the Treasurer of the Trustees and University is granted specific authority to execute certain documents and agreements on behalf of the University. No officer, agent, or employee of the University has the authority to sign contracts or other agreements on behalf of the University or any unit, department or subdivision of the University in the absence of a formal delegation of authority. I N D I A N A U N I V E R S I T Y 41

43 Signature Authority and Delegation (FIN-TRE-VI-100) In the absence of the Treasurer, the President, the Vice President delegated by the President, or the Assistant Treasurer are authorized to execute, issue, and deliver documents which would otherwise be signed by the Treasurer. Official list of delegates maintained by the Secretary of the Board. Purchasing signature authority established by Board of Trustees in separate Policy, Purchasing Authority FIN-PUR-1.0 I N D I A N A U N I V E R S I T Y 42

44 Signature Authority and Delegation (FIN-TRE-VI-100) TREASURER or Official Delegate of record ONLY: Affiliation Agreements Bank Accounts Business Transactions: All checks, contracts, agreements deeds, notes, bonds, leases, stock powers, repurchase agreements for real estate and any other documents obligating the Trustees of Indiana University. This category includes agreements with outside consulting firms; agreements to rent, lease or license of the use of facilities from outside entities whether for educational or social purposes; agreements with outside vendors or entertainment providers, and the like. I N D I A N A U N I V E R S I T Y 43

45 Signature Authority and Delegation (FIN-TRE-VI-100) TREASURER or Official Delegate of record ONLY (cont.): Debt Obligations and Loan Transactions Permit Applications and Certifications Sponsored Research: All grant proposals, grant agreements, sub-grant agreements, contracts, subcontracts, purchase orders, and any other documents relating to external funding of research. Tax Documents Miscellaneous: Any and all other documents and transactions either referred to explicitly or implicitly in the Resolution, that are required to conduct the normal business transactions of the University. I N D I A N A U N I V E R S I T Y 44

46 Preservation and Destruction of Public Financial Records (FIN-ACC-I-110) I N D I A N A U N I V E R S I T Y 45

47 Financial Sub-Certification (I-510) Financial attestation document required to be signed by unit leaders and Fiscal Officers Signed annually at the end of the fiscal year and reviewed by University Controller Developed in the wake of the Sarbannes-Oxley Act, which required CEOs/CFOs of public companies to sign financial statement certifications I N D I A N A U N I V E R S I T Y 46

48 Financial Sub-Certification (I-510) I N D I A N A U N I V E R S I T Y 47

49 Internal Controls (I-470) Internal Controls: A system consisting of specific policies and procedures designed to provide management with reasonable assurance that the goals and objectives it believes important to the entity will be met. Internal controls exist in order to: promote operational efficiency and effectiveness, provide reliable financial information, safeguard assets and records, encourage adherence to prescribed policies and comply with regulatory agencies. I N D I A N A U N I V E R S I T Y 48

50 Internal Controls (I-470) Policy addresses: Ethical behavior and compliance by senior financial administrators Financial documentation and development of policy and procedure Appropriate controls in financial systems I N D I A N A U N I V E R S I T Y 49

51 Internal Controls (I-470) Policy establishes: Institutional, RC and departmental level responsibility Management not auditors must establish and maintain controls. Control Environment Tone at the top Communication Competency Separation of Duties Regulatory compliance I N D I A N A U N I V E R S I T Y 50

52 What else is out there? Other financial policies related to: Payroll Accounts Payable Capital Equipment Management and Accounting Accounts Receivable Budgeting Auxiliary Accounting Insurance, Loss Control and Claims Tax Travel Recharge Centers Charitable Gifts, Donor Intent Fund Accounting Structure I N D I A N A U N I V E R S I T Y 51

53 What else is out there? Non-financial policies, too! Information & IT: Management of Institutional Data (IT-DM-01) I N D I A N A U N I V E R S I T Y 52

54 Management of Institutional Data (DM-01) Users of institutional data must not: Disclose data to others except as required by their job responsibilities. Use data for their own or others personal gain or profit. Access data to satisfy personal curiosity. I N D I A N A U N I V E R S I T Y 53

55 Management of Institutional Data (DM-01) Four classifications of institutional data: Critical Restricted University-internal Public Which one exposes IU to the greatest risk? I N D I A N A U N I V E R S I T Y 54

56 Management of Institutional Data (DM-01) CRITICAL DATA Inappropriate handling of this data could result in: criminal or civil penalties, identify theft, personal financial loss, invasion of privacy, and/or unauthorized access to this type of information by an individual or many individuals. I N D I A N A U N I V E R S I T Y 55

57 Management of Institutional Data (DM-01) You must not enter critical data in unrestricted KFS fields such as: Document Descriptions; Explanation field; Organization Document Number Line Descriptions, Organization Reference ID; Notes. I N D I A N A U N I V E R S I T Y 56

58 Management of Institutional Data (DM-01) You must not attach documentation with critical data in the Notes & Attachments section of a KFS document, including: W-9 forms (contain SSNs); ACH Authorizations (contain banking information; Receipts with credit card numbers* *Properly redact critical data on any attachments, such as receipts. See IUKB article: Properly redacting information at IU I N D I A N A U N I V E R S I T Y 57

59 Report KFS Critical Data Policy Violations FMS Support Form ( I N D I A N A U N I V E R S I T Y 58

60 Handling of KFS Critical Data Policy Violations Each confirmed violation will result in the following actions: Notification of incident will be ed to: Policy offender; Account and RC fiscal officers; Campus administrator (cc:); Vice chancellor (cc:); and University controller (cc:) Incidents will be jointly tabulated by Procurement Services and FMS for monthly reporting to the Committee of Data Stewards. I N D I A N A U N I V E R S I T Y 59

61 Policies currently under revision: I N D I A N A U N I V E R S I T Y 60

62 Know what s out there! University Policies webpage: I N D I A N A U N I V E R S I T Y 61

63 Policy Wars Answers: 1) E 2) D 3) A 4) Trick question! 5) C I N D I A N A U N I V E R S I T Y 62