Expenditure Approval Requirements
Memorandum #203 Expenditure Approval Requirements
Revised: July 1, 2014
Date of Issue: July 26, 1977
The purpose of this policy memorandum is to define institutional approval levels which are required for institutional expenditures.
Expenditures on behalf of the College fall into six categories:
- Petty cash
- Operating budget expenditures
- Capital budget expenses
- Facilities (project) development
- External agreements
- Grant Expenditures
Approval requirements for expenditures in each of these areas are discussed below.
I. Petty Cash Expenditures
Internal financial control procedures, as well as the requirements of outside auditors, specify that college personnel should not approve their own petty cash expenditures. To conform with this principle, the following hierarchy of petty cash expenditure approval is indicated:
- Petty cash vouchers must be approved by those responsible for specific Organizational units (cost centers), i.e., Academic Department Heads or Administrators of support units, for those departmental expenditures incurred within their area of responsibility.
- The expenditures of Academic Department Heads or Administrators must be approved by the Division Dean or Administrator to whom they are directly responsible.
- The expenditures of Division Dean or Administrators must be approved by the Senior Officer in their area or the Senior Officer's designee.
- The expenditures of Senior Officers must be approved by the President or their designee.
- Petty cash expenditures may be in compliance with Policies and Procedures Memorandum No. 204. In every case possible, proof of expenditure should be provided at the time petty cash accounts are reconciled. For out-of-pocket expenditures greater than fifty dollars ($50), a check request form must be used. College employees are encouraged to use the check request process as a means of reimbursement for personally incurred expenses incurred on the College’s behalf.
II. Operating Budget Expenditures
Subject to the provisions of Policies and Procedures Memorandum No. 202, trustee approval of the operating budget is approval to effect the programs contained therein. Within the guidelines provided below, the Organizational unit (cost center) manager is authorized to undertake the expenditures contained within the approved budget plan.
All supplies and other goods or services (except equipment repair, memberships, subscriptions, capital items or travel) should be requisitioned using an on-line requisition. Equipment leases should be coordinated with the Budget Office to ensure compliance with Commonwealth regulations. All purchase requisitions must be approved by an Organizational unit (cost center) Manager, their Supervisor, or the Senior Officer. Under no circumstances should an approved signature or electronic authorization be provided by anyone other than the responsible individual.
Organizational unit (cost center) Managers are authorized to approve all operating expenditures to a level of $1,000. A lower approval threshold may be requested by their Dean or Administrator.
Deans, Directors and other employees with budgetary responsibilities over a division are authorized to approve all operating expenditures to a level of $5,000. A lower approval threshold may be requested by their Senior Officer.
Senior Officers are authorized to approval all operating expenditures to a level of $10,000.
Change order requests to existing Purchase Orders are to be prepared on a paper Purchase Requisition Form and require the following information:
- Original Purchase Order Number
- Description/Reason for the change request
- Dollar Amount of requested change
- Dollar Amount of original purchase order
- Total Amount of Purchase order including the change order amount
Any purchase requisition with a value of $10,000 or greater must be approved by the President. This includes requests for change orders which, when added to the original purchase order value, will cause the cumulative value of the purchase order to exceed $10,000.
No commitment may be made involving consulting services (expense code 7055) where the commitment within any fiscal year will exceed $1,000 without presidential approval.
III. Capital Expenditures
A Capital Expenditure is defined as an expenditure for the purchase of land, building, equipment, software, machinery, furniture and fixtures where the unit cost of an individual item is $1,000 or greater and the expected life of the item exceeds one year. Furniture and fixture expenditures related to the outfitting of complete rooms, where the unit cost of an individual items are less than $1,000, may be considered capital expenditures under certain circumstances. The Controller’s Office should be contacted for a decision on these situations.
- Capital budget expenditures of less than ten thousand dollars ($10,000), which are reflected in approved line item budgets, require approval by the Organizational unit (cost center) Manager (Department Head), the Division Dean and the Senior Officer. Any capital item not included in the approved capital budget and any requisition $10,000 or greater also require the approval of the President. Requisition for items not included in the approved capital budget must be accompanied by an explanatory memo and budget adjustment form, if needed, showing the source of funding that will be used to pay for the unbudgeted capital item. In situations where the College has deferred approving a capital budget, all requisitions require the approval of the President and must be accompanied by an explanatory memo and a budget adjustment form.
- Any single capital item or combination of complementary items with a value of fifty thousand dollars ($50,000) or greater requested for purchase requires the approval of the Board of Trustees. Written justification for such purchases should be presented to the Interim Vice President for Finance and Facilities along with the purchase requisition for budgetary review and placement on the agenda of the Business Affairs Committee of the Board.
- Normally the budget plan approved by the Board will contain a line-item capital budget. Board adoption of the annual budget constitutes authority to proceed with the purchase of all capital items itemized in the budget. However, since the Commonwealth decisions with respect to the level of capital funds that will be made available is frequently delayed, authorization to Organizational unit (cost center)managers to begin to purchase capital items in an approved budget may be delayed pending a release of state dollars for capital purchases.
IV. Facilities (Project) Development
Any program for development or modification of college-owned facility and equipment involving the use of bond proceeds or other special capital funding source requires the approval of the Board of Trustees. Written justification for such development along with the purchase requisition and planning documents, approved by the President, must be presented to the Interim Vice President for Finance and Facilities for placement on the agenda of the Business Affairs Committee of the Board.
All campus development projects with a value of fifty thousand dollars ($50,000) or greater must have prior Board approval.
V. External Agreements
Agreements involving the College in contractual arrangements with other institutions or agencies may not be made without approval of the President or his or her designee.
VI. Grant Expenditures
In addition to the above requirements, approvals for grant expenditures are determined by the Controller’s Office in order to comply with the requirements of the grantor. Each grant will be assigned a Financial Administrator who will adhere to the approval processes determined by the Controller’s Office.
VII. Designation of Signature Authority
Occasionally, because of vacations or absences from campus, it will be necessary for someone other than the Organizational unit (cost center) managers to authorize expenditures. If this occurs, a memo authorizing an alternative signature should be sent to the Budget, Controller and Purchasing officers. No alternative signature for expenditure will be honored unless there is an authorizing memo on file.
Date Effective: July 1, 2014