OSU PaCS 101-04: OSU Internal Controls Policy

Purpose

To ensure operational efficiency and financial accountability.

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Background

Internal controls are the policies and procedures utilized by the University to promote operational efficiency and assure the accuracy and reliability of the financial records used to maintain control and accountability of University assets.

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Policy

Internal Controls

University departments should utilize an efficient system of internal control by requiring a separation of staff duties and established levels of authorization. In order to establish a proper system of internal controls departments shall adhere to these authorization policies.

Departmental Expenditure Authorization

In accordance with OAR 576-008-0220, it is the responsibility of Unit Administrators (deans or department heads) to designate authorized staff to acquire all goods and services on behalf of their department within their delegated authority, and that a same or higher ranking staff approve personal and travel reimbursements. This designation shall be in compliance with the Departmental Purchasing Guidelines available at www.pacs.oregonstate.edu. The Departmental Purchasing Guidelines provide guidance in how Unit Administrators designate internal purchasing authority at the departmental level as well as purchasing authority in initiating those purchases valued at $5000 and greater by signature on the Departmental Requisition, which is submitted to PaCS for processing. Unit Administrators shall utilize these documents along with their personnel position descriptions when assigning purchasing authority within their department.

To ensure compliance on a centralized procurement level, signatures on Departmental Requisitions will be reviewed carefully by the PaCS analysts. Any Departmental Requisition that contains signatures of individuals that do not conform to the Departmental Purchasing Guidelines will be returned to the department along with a memo stating the reason for return. Example: A Departmental Requisition for a $100,000 purchase including only a Graduate Student or Office Specialist I/II signature on would be considered inappropriate. Departmental Requisitions requesting purchases at this dollar level shall be signed by the department’s Dean, Director or VP. It is important that the Departmental Requisitions are completed in compliance with the guidelines or else purchases may be held until appropriate signatures are obtained. 

Department Administrators are also responsible for three areas of expenditure approval. 

1. Programmatic Approval
   Programmatic approval implies that the proposed expenditure has a business related purpose and meets objectives related to department, college, school or university mission.
   
       Responsibility: Unit Administrators and their designees.
   
       Guidance: Business Services and Business Affairs departments.
   
   
2. Budgetary Approval
   Budgetary approval indicates that the proposed expenditure is a priority and that sufficient funds are available to incur the expense.
   
        Responsibility: Unit Administrator and their designees.
   
        Guidance: Budgets office, Research office, (if applicable) and Business Affairs department.
   
   
3. Compliance Approval
   Compliance approval indicates that the proposed expenditure has met all applicable laws, regulations, policies, procedural requirements and if applicable, all granting agency rules. The expense incurred shall be accomplished by using good business practices.
   
       Responsibility: Unit Administrators and their designees.
   
       Guidance: Business Affairs, Business Services department.

Non-Compliance

In circumstances where an individual making a purchase does not have authorization by the Unit Administrator, or inappropriate expenditures are made and that person makes a purchase on behalf of their department, then the University is under no obligation to pay for or reimburse that individual for those items. In circumstances of repeated non-compliance, it will be up to the discretion of the Directors of Business Services and Business Affairs to evaluate and impose further appropriate sanctions.

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