"Stif Dti Segregation of Duties-"
Segregation of Duties– S ti f D ti Sponsored Programs APM 2.25.55.01 Overview • The policy outlines good internal controls for sponsored activity including: – Segregation of duties – Proper authorization, verification and authorization verification, managerial review – Appropriate documentation – Delegation of authority form • Effective Date: October 1 2008 1, 2 Overview • APM 2.25.55—Segregation of Duties • APM 2.25.55.01—Segregation of Dutiesg g Sponsored Programs • Supplements APM 2.25.55— Segregation of Duties • APM 2.25.55.02 – D l 2 25 55 02 Delegation of A th it F ti f Authority Form • This training focuses on proper authorization, verification, and managerial review t meet ifi ti d i l i to t compliance requirements 3 Relationship of 2 Policies p 4 Requirements q • Compliance requirements from the Office of Management and Budget Circulars include: g g – A-21 – Cost Principles for Educational Institutions – A-110 – Administrative Requirements • Other requirements per the award • Ensure only allowable and allocable costs are charged to an award 5 Principal Investigator ( ) p g (PI) • The PI’s role includes: – Ultimate responsibility for an award – Ability to delegate authorization • PI cannot delegate responsibility for award • PI cannot delegate managerial review 6 Delegation Form g • Delegation form (Form) used to document delegation of authorization • Only used for sponsored programs • F Form maintained i th D i t i d in the Department t t • Key document in course of audit 7 Delegation Form g 8 Delegation Form g 9 Delegation g • Delegates for authorization must have: – Direct knowledge of the sponsored award g p – Awareness of terms and conditions of award – Awareness of compliance requirements p q – Knowledge of the transaction • Delegate must be a University employee g y p y 10 Authorization • Authorizer—appointed individual who can y p program initiate activity for a sponsored p g • Authorization indicates the transactions p q meet the compliance requirements of: – Allowability – Allocability – Period of availability – Awarded budget 11 Authorization • Documentation for cost transfers: – Sufficient – if cost transfer is < 60 days • PI or Delegate certify costs are allowable • PI or Delegate documents how costs benefit th award b fit the d • Why transfer is necessary 12 Authorization • Documentation for cost transfers: – Substantial – if cost transfer is > 60 days • Documentation must answer: Who What When Where Why How • What is being done to ensure the circumstance does not occur again? (Due diligence) 13 Authorization • Documentation for cost transfers: – Never • “To spend out award” • “To move costs to grant” • “Due to pressure from UM System” p y 14 Verification • All transactions must be verified – Confirms the accuracy and timeliness of accounting transactions – C fi Confirms th t cost transfers are properly that tt f l documented with sufficient and/or substantial d b t ti l documentation t ti 15 Managerial Review g • PI has ultimate responsibility for the award • PI cannot delegate managerial review • The monthly managerial review is the final opportunity to ensure programmatic and financial compliance 16 Exception to Segregation Authorization PI Recording 1 Verification PI PI (Managerial) Review PI • In less than optimal circumstances, a PI may perform all 3 functions ( th i ti verification, (authorization, ifi ti managerial review) • PI cannot authorize his/her own reimbursements • Verification and Managerial Review can be done concurrently if both done by the PI • Recording must be segregated 17 Managerial Review g • To confirm: – Appropriate segregation pp p g g – Costs are allowable and allocable – All costs are posted to the award p – Costs are within the period of availability • Timely review of financial reports including y p g a budget to actual comparison – Address deficits or excess costs – Remove unallowable costs 18 Differences from Financial R Fi i l Requirements i t • Managerial review should be performed monthly to facilitate timely error corrections • If verification is done by the PI still need to PI, review and sign budget variance report. 19 Frequently Asked Questions q y • The following Frequently Asked Questions (FAQs) address practical application of this policy. 20 FAQ’s – Fiscal Office Impact p • How does the policy impact the Fiscal Officer? – If the PI delegates authorization, the departmental Fiscal Officer confirms the: • expenditure was authorized by a delegate, • accuracy of accounting information, f ti i f ti • agreement with University Collected Rules, Business, Business and Accounting policies policies. 21 FAQ’s – SPO Impact p • How does the policy change the interaction between Departments and the Sponsored Programs Office (SPO)? – No interaction changes with the SPO. SPO – Accounting Offices will still check PS Authorization for th i d i A th i ti f authorized signatures. t 22 FAQ’s – PI Impact p • How does the policy impact the PI? – The PI is responsible for authorization of ALL transactions; the PI can delegate this responsibility. responsibility – The Form is adequate documentation for d l f delegation. ti 23 FAQ’s – PI Impact p • Are there exceptions to when the PI can authorize transactions on an award? – Yes. The PI cannot authorize transactions for their own business reimbursement (e.g., travel or expense reimbursement). reimbursement) 24 FAQ’s – PI Impact p • Does the PI need to complete a Form if he/she signs all invoices? – No. The Form is needed only if someone other than the PI will be authorizing transactions without the PI’s signature. signature 25 FAQ’s – PI Impact p • Can a Co-PI delegate authorization? – Yes The Co PI has the same authority Yes. Co-PI and responsibility as the PI, as long as the Co PI is: Co-PI • a University employee, and • named b th sponsor on th award d by the the d document. 26 FAQ’s – Pre-Authorization • Do expenditures on awards need preauthorization? – No, a department may optionally require pre-authorization. pre authorization 27 FAQ’s – Authorization • What documentation is required for cost transfers? – Th authorizer should l k f The th i h ld look for: • substantial or sufficient justification, • timeliness of the cost transfer, and • EVR agreement with payroll information. 28 FAQ’s – Authorization • What effect does the policy have for anyone authorizing transactions on an award? – Th PI may d l The delegate authorization t t th i ti to anyone that has: • direct knowledge of the activity, • awareness of terms and conditions of award, • awareness of compliance requirements, and • knowledge of the transaction. 29 FAQ’s – Authorization • How does this policy apply to charges to a sponsored award from a feeder system? – The PI or delegate must provide authorization to the feeder system owner before transactions are initiated. 30 FAQ’s – Authorization • What is the Fiscal Officer’s role in authorization? – The Fiscal Officer should verify that transactions are authorized by either the PI or the delegate. – Th Fi The Fiscal Offi l Officer must maintain th t i t i the documentation. 31 FAQ’s – PS Authorization • Is the information on the Form required to be entered into PS Authorization? – No, although a campus may optionally choose to do so. 32 FAQ’s – PS Authorization • Does PS Global Authorization give the p Fiscal Officer authorization for sponsored award activity? – No, it only provides authorization for , yp Financial requirements, it does NOT meet the “direct knowledge” Compliance requirement. i – Delegates must have direct knowledge of the sponsored activity. f th d ti it 33 FAQ’s – Managerial Review g • Can the PI delegate managerial review? – No the PI has ultimate responsibility for No, the award and managerial review cannot be delegated delegated. 34 FAQ’s – Managerial Review g • What should be maintained to document the PI’s managerial review? – Th PI should sign and d t th The h ld i d date the: • budget to actual comparison report for the ChartField t i Ch tFi ld string, • written justification for cost transfers, and • detail list of transactions for the award if authorization and verification are not segregated. segregated 35 FAQ’s – Managerial Review g • What should the PI look for in the managerial review? – C t not related to the award, such as: Costs t l t d t th d h • clerical errors, • salary posted to the award when no effort was made toward the award, • supplies or travel not related to the award, • costs outside the period of availability, or • duplicate charges. – Costs related to the award that are missing missing. 36 FAQ’s – Delegation Form g • How does this policy change the current process for authorized signers? – Th PI completes a Form to document The l t F t d t delegation for authorization. – Delegates must have: • direct knowledge of activity, • awareness of terms and conditions, p q • awareness of compliance requirements, and • knowledge of the transaction. 37 FAQ’s – Delegation Form g • C th PI use one Form to delegate Can the F t d l t authorization for multiple sponsored awards? d ? – No. Each Form should reflect delegations for an individual ProjectID. – This will facilitate filing and retrieval of g the Form to provide audit support for delegations of authority by ProjectID. g y y j 38 FAQ’s – Delegation Form g • Can one Form be used to delegate authorization for multiple individuals on one sponsored award? – Yes Multiple delegations of Yes. authorization can be indicated on one Form. Form 39 FAQ’s – Delegation Form g • What if one of the delegates for authorization leaves the Department? – The Form should be updated to reflect changes in delegation delegation. – All Forms must be kept as supporting documentation. d t ti 40 FAQ’s – Delegation Form g • Can the PI put a dollar and/or time limit on the delegations? – Yes. However, the form should be updated when changes occur occur. 41 FAQ’s – Delegation Form g • Where do I keep the Form? – The Form is retained by the Department to support delegated authorization on an award. award – Some Sponsored Programs Offices may require a copy f th permanent award i for the t d files. 42 FAQ’s – Delegation Form g • Who receives a copy of the Form? – The Form should be sent to the: • delegate(s), • departmental Fiscal Officer, and • SPO or other campus offices if p required. 43 FAQ’s – Delegation Form g • What are the retention requirements for the Form? – Th F The Form h th same retention period has the t ti i d as any documentation for the award • Three years after filing the final reports or longer if required by the award, and • U til all external (OIG) audits are closed. Until ll t l dit l d – It is maintained by the Department in either paper or electronic form. 44 FAQ’s – P-card • When does authorization occur for a Pcard transaction? – Written authorization may be provided by the PI or delegate before the purchase is initiated. – W itt / l t i authorization by the PI Written/electronic th i ti b th or delegate must be provided before the monthly P thl P-card reconciliation d dli d ili ti deadline. 45 FAQ’s – P-Card • What if all charges for a P-card default to a sponsored award? – Unless all charges on a P-card will be posted to the award, the default should be a non-sponsored ChartField string. – Make all ChartField corrections before monthly reconciliation deadline for Pcard. 46 FAQ’s – Requisitions q • When does authorization occur for a p purchase requisition or e-Pro requisition ? q q – When the allowability is documented, , pp y such as an email, or approved by a delegate through WorkFlow. – The PI or delegate should authorize all g requisitions to be directly charged to an award. 47 Concluding Points g • Segregation of duties • Authorization verification and managerial Authorization, verification, review • D l Delegation f ti form and retention d t ti • Timely verification and PI review • And don’t forget to… 48 Maintain Documentation.. 49 Additional References • APM 2.25.55 – Segregation of Duties • APM 2 25 55 01 – Segregation of Duties 2.25.55.01 DutiesSponsored Programs • APM 2 25 55 02 – D l 2.25.55.02 Delegation of ti f Authorization Form • BPM 213 – Adjustment of Income & Expense Items • Fiscal Misconduct Reporting Line 50