713 Montreal Road POLICIES AND PROCEDURES Ottawa, Ontario K1K 0T No. FIN 015

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1 TITLE: SIGNING AUTHORITY EFFECTIVE: DATE LAST REVIEWED: JANUARY 1988 MARCH 2011 CATEGORY: ADMINISTRATION FINANCE OTHER REFERENCES: ISSUED BY: GENERAL MANAGEMENT APPROVED BY (DATE): Board of Directors (17/03/2011) 1. POLICY 1.1 The Board of Directors must ensure that the internal control processes in place at Montfort Hospital are adequate and protect the Hospital, its patients, staff and other stakeholders associated with the daily operation of the Hospital. 1.2 The policy must set out mechanisms for the delegation of authority to the most appropriate decision-making level. All employees, physicians and volunteers are responsible for complying with the internal control rules put in place. 1.3 Montfort Hospital ensures that all expenses are properly authorized by the appropriate signing authority. 1.4 The President and Chief Executive Officer (President & CEO) is the ultimate signing authority at Montfort Hospital. In the absence of the President & CEO, the Vice-President, Finance assumes the ultimate signing authority. 2. DEFINITIONS 2.1 Commitment authorization: The approval required before any transaction involving a future expense is carried out. The directors or their replacements are responsible for determining whether funds are available before a commitment is made. 2.2 Purchase order: A written offer made by a purchaser or procurement officer to a supplier officially setting out all the conditions of the proposed transaction. 2.3 Small purchase card: A credit card used to make low-cost purchases. It enables Material Management and non-office employees to obtain certain goods and services without going through the Hospital s standard request and authorization procedure, which requires the issuance of a purchase order and a cheque. The parameters are preset per individual (according to the respective authorization level) so as to limit use to specific purchases from predetermined suppliers or businesses to allow for centralized billing. Page 1 of 6

2 2.4 Invitational competitive process: A process in which a minimum of three qualified suppliers are invited to provide a written or verbal proposal that meets the requirements defined by Material Management. 2.5 Open competitive process: A process that involves a set of procedures designed to obtain bids in a fair, impartial and competitive manner through a request for bids or proposals and with a view to awarding a supply contract. 2.6 Non-competitive process: A process that involves the procurement of goods or services in the situations indicated in the exemption, exception and non-application clauses of the Agreement on Internal Trade or any other trade agreement. Before goods or services are procured, the supporting documents must be completed and approved by the person with the appropriate authority. 3. PROCEDURE 3.1 Commitment of Expenses The directors or their replacements are the main signing authorities for transactions in the activity centres for which they are responsible, within the limits of the approved budgets The front line signing authority is appointed by the director or manager to whom he or she reports in the chain of command No one may authorize an expense or payment for himself or herself. All expenses and reimbursements must be approved by the immediate superior who is the signing authority A commitment authorization is required for the following types of activities: purchase requisitions; inventory outflows; supply requisitions; acquisitions of professional and consulting services The authorization limits and approval levels by position for the abovementioned activities are set out in appendices B and C. All requests for approval of expenses, training or hospitality are subject to the terms of policy FIN 005,Travel/Training/ Hospitality Expenses. Page 2 of 6

3 3.2 Approval of Expenses The signing of purchase orders and contracts is reserved for the Director of Material Management or one of the Hospital s four signing authorities indicated in section 3.3 below The Director of Material Management is the only person authorized to sign contracts of less than $1,000,000 that are issued following a call for bids process. Contracts of $1,000,000 or more require the approval of one of the Hospital s four signing authorities Purchasing Department employees are the only signing authorities for purchase orders. 3.3 Signing of Cheques Cheque signing authorities are approved by the Board of Directors and hold the following offices: President & CEO; Vice-President, Finance; Chair of the Board of Directors; Treasurer of the Association All cheques must be signed by two of the four official signing authorities and at least one of them must be the President & CEO or the Vice-President, Finance. 4. REFERENCES AND RELATED REGULATIONS The Ottawa Hospital Policy ADM IV 300: Signing Authority (2007) The Broader Public Sector Procurement Directive (effective April 1, 2011) Page 3 of 6

4 Appendix A Approval Authority Schedules Approval Authority for Consulting Services Procurement Value Means of Procurement Approval Authority $0 to $24,999 Invitational competitive process (telephone) $25,000 to $99,999 Invitational competitive process (in writing) $100,000 or more Open competitive process (bid) Proposal Evaluation Committee which recommends the choice of supplier to those in charge, in accordance with Appendix B or C of $0 to $999,999 Non-competitive process President and CEO and Vice-President responsible $1,000,000 or more Non-competitive process Board of Directors Approval Authority for Goods and Services Other Than Consulting and Construction Procurement Value Means of Procurement Approval Authority $0 to $50 Petty cash disbursement $51 to $3,000 Small purchase card $3,001 to $25,000 Purchase order and invitational competitive process (telephone) $25,001 to $99,999 Purchase order and invitational competitive process (in writing) $100,000 or more Purchase order and open competitive process (bid) $0 to $999,999 Purchase order and noncompetitive process $1,000,000 or more Purchase order and noncompetitive process Proposal Evaluation Committee which recommends the choice of supplier to those in charge, in accordance with Appendix B or C of President & CEO and Vice-President responsible Board of Directors Page 4 of 6

5 Appendix B Approval Levels by Position Signing Authority Authorization Limits Approval Levels $0 to $3,000 Front line (appointed by the manager) $3,001 to $10,000 Managers of activity centres or their replacements approved by the director $10,001 to $50,000 Directors $50,001 to $250,000 Vice-Presidents $250,001 or more Vice-President, Finance and President & CEO This schedule applies to all sectors except the following: Laboratory; Diagnostic imaging; Pharmacy; Operating rooms; Facility Services; Information technologies and systems; Biomedical engineering. The approval limits for these sectors are provided in Appendix C. Page 5 of 6

6 Appendix C Approval Levels by Position The schedule below applies only to the following sectors: Laboratory; Diagnostic imaging; Pharmacy; Operating rooms; Facility Services; Information technologies and systems; Biomedical engineering. Signing Authority Authorized Limits Approval Levels $0 to $3,000 Front line (appointed by the manager) $3,001 to $50,000 Managers of activity centres or their replacements approved by the director $50,001 to $100,000 Directors $100,001 to $250,000 Vice-Presidents $250,001 or more Vice-President, Finance and President & CEO Page 6 of 6