Expenditure Approvals

Expenditure Approvals Overview

Overview
Summary of Terms

Term

Description

Budget owner

An employee who has been assigned budget in the financial system and therefore has signing authority to make expenditures within the amounts and scope of his/her budget and within maximum limits.

DeptID budget owner

An employee identified as a budget owner due to holding a department (deptID) in the financial system.

Applicable to operational funds: Funds F210 (operating), F100 (institutional), F310 (ancillary), F551 (special purpose), Exxx (endowments)

Project budget owner

An employee identified as a budget owner due to holding a project (projectID) in the financial system.

Applicable to research, special purpose and capital projects: Funds F330 (research - operating), F5xx (research), F550 (special purpose), F320 and F520 (capital)

Proxy approver

An employee who has been assigned to act on the budget owner’s behalf (“acting capacity”) during a temporary absence (e.g. vacation). The proxy must have the appropriate level of knowledge to fulfill the budget owner accountability.

 

The proxy for a deptID budget owner or capital project budget owner can be a subordinate (generally an employee who reports directly to the budget owner), a peer or a superior. The proxy for a research or special purpose project owner can be a peer, co-investigator or superior (e.g. Chair). The proxy must have an association with and knowledge of the research project; therefore, an employee in an administrative support capacity would not be an appropriate proxy.

One-over-one approver

An employee required to perform the approval where the budget owner is the claimant (i.e. a travel or expense reimbursement) due to the conflict of interest that may arise when approving a payment to oneself. The one-over-one approval provides assurance that the expenditure is reasonable and required for University operations or relevant to the research being funded.

 

For reimbursements from operational funds, the one-over-one approver is determined through the DeptID Budget Owner Tree. For reimbursements from research, special purpose and capital projects, the one-over-one approver is the project budget owner. If the project budget owner is the claimant, the one-over-one approver is determined through the DeptID Budget Owner Tree.

 Sub-delegate         A member of a research team delegated by the project budget owner to approve expenditures, except for travel and expense reimbursement. 

Claimant

An employee initiating travel or expense reimbursement and is accountable for all aspects of their claim.

Requester

An employee initiating a purchase through an online requisition.

 

University of Alberta Approval Framework

Expenditure signing authority is reflected through the budget and provides the authority to the budget owner to make expenditures within the amounts and scope of his/her budget.

In PS Financials, signing authority is reflected through either a department (deptID) budget or a project (projectID) budget, and budget owners approve transactions against the budget. Each deptID and projectID is associated with a single budget owner, who must be a University of Alberta employee.

Sub-delegation by budget owners is currently permitted only for the purposes of approving research project expenditures, except for travel & expense reimbursements.

The University applies the one-over-one approval principle where the budget owner may be in a conflict-of-interest position with respect to a transaction request (primarily travel & expense reimbursements). The one-over-one approval hierarchy is reflected in the DeptID Budget Owner Tree.

Payroll transactions are processed through PeopleSoft Human Capital Management (PS HCM). Approval requirements are based on the type of employee hire and may differ from PS Financials approval requirements.

How to set up sub-delegation for research projects:

  • Sub-delegation is set up by the budget owner online (refer to PeopleSoft Financials Training).

Proxy Approver

During a temporary absence (e.g. vacation), which would not normally exceed a period of six weeks, a deptID or projectID budget owner may assign another employee, called a proxy, to act on their behalf (“acting capacity”). The proxy can be a subordinate (generally an employee who reports directly to the budget owner), a peer, co-investigator (projects only) or a superior. The budget owner is responsible for ensuring that the proxy has the appropriate level of knowledge to fulfill the budget owner accountability. In the case of research and special purpose funding, the project budget owner’s proxy must have an association with and knowledge of the project.

Budget owner absences over extended periods (e.g. long-term illness) may require a replacement of the budget owner rather than a proxy assignment, as the budget owner may not be capable of setting up the proxy. In such cases it is expected that the budget owner’s one-over-one approver would determine an appropriate replacement.

How to set up:

  • Proxy is set up by the budget owner online (refer to PeopleSoft Financials Training).  For other scenarios (e.g. budget owner did not assign proxy prior to departing for their vacation) – a form is required.
  • Go to Forms Cabinet and select IST (will link to IST Forms Cabinet - select Request for Administrative Access - PeopleSoft Financials – Proxy).

Transition from Manual Approvals to Electronic Approvals

Currently, only purchase requisitions (for purchase of goods and services over $5,000 CAD and $2,500 USD) and travel & expense reimbursements are electronically approved. Many other financial transaction streams will be subject to PS Financials electronic approvals in future. In the interim, units are encouraged to adopt the approval principles shown in this Guide for financial transactions that are manually approved, as electronic processes facilitate a clear and consistent approval discipline.

Where manual signatures continue to be required, signatures produced by rubber stamps, or other means of reproduction are not permitted. A faxed signature is acceptable, provided the fax clearly indicates what expenditures are being authorized.

IRAP (Iniate, Review, Approve, Process) Model for Transaction Processing

IRAP (Initiate, Review, Approve, Process) refers to the steps involved in processing expenditure transactions.

Where transactions are subject to electronic approval routing, whether or not each IRAP step requires a separate action within the PeopleSoft application depends upon certain criteria such as the type of transaction and fund (i.e. operational or research & special purpose projects) to which an expenditure is being processed.

A general explanation of each IRAP step is as follows. Further details as to roles and responsibilities are provided in the Operational Funds and Research and Special Purpose Projects sections on the following pages.

Step 1: Initiate

The Initiate step involves the creation of a transaction request such as a travel or expense claim, a requisition or a payment request.

Step 2: Review

The Review step is performed as a distinct step, separate from the approve step, only for research and special purpose project expenditures, and currently only on travel and expense reimbursements. The individual performing the Review step is referred to as the independent reviewer. The Review step for research and special purpose transactions is required due to the higher-risk nature of these types of funds (e.g. large volume of projects and approvers, requirement to comply with external restrictions). While only travel and expense reimbursement transactions currently require the Review step, in future, this step may be incorporated in other financial transaction processes.

As implied by the name “independent reviewer”, the review of transactions is to be performed by an individual who is independent from the preparer/initiator and can therefore perform the role objectively and free from influence. The independent reviewer is responsible for assisting the project budget owner (or the project budget owner’s one-over-one approver, where the claimant is the project budget owner) in determining whether to approve the expenditures, by checking that it is:

    -   in compliance with UofA policies, procedures, guidelines 
    -   eligible per granting agency/donor terms and conditions 
    -   coded accurately (e.g. COA) 
    -   supported by appropriate documentation 

The independent review role should be assigned to individuals who have detailed knowledge of business processes, University policy and procedure (applicable to the processes) and sponsor/donor terms and conditions. Financial Services recommends centralizing the independent review role (where possible) to ensure adequate independence from the preparer/initiator, to facilitate the efficient use of training and supervisory resources and to ensure issues are resolved consistently. The UofA is exploring options for strengthening the independence of reviewers and expects greater centralization of this function to be implemented in the near future.

The inclusion of independent review in the research and special purpose travel & expense reimbursement process does not remove or diminish the claimant’s or approver’s accountabilities.

How to set up:

  • A form is required.
  • Go to Forms Cabinet and select AIS (will link to AIS Forms Cabinet – select Request for Administrative Access – PeopleSoft Travel & Expenses Independent Reviewer).

Step 3: Approve

The Approve step must be performed before the transaction can be processed. The approver may alternatively send the transaction back to the preparer/initiator for correction or deny the transaction altogether.

Step 4: Process

Once a transaction request is approved, it will be processed. For example, upon approval a travel reimbursement will be paid or a requisition will be converted into a purchase order.

Links:

Expenditure Transaction Processing Operating Funds

 

Expenditure Transaction Processing Research and Special Purpose Projects