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Welcome to Expenditure Guide Chapter 3 Authority and Limits Welcome to the “Expenditure Guide,†one of several courses about financial management and business transactions at the UO. As administrators at the UO, one of the most important decisions you will make is to commit funds for expenditures of goods and services. This responsibility requires that you become informed of requirements and act ethically. You are the steward of dollars that flow to the UO from a variety of sources. The Expenditure Guide has been developed to assist you in exercising stewardship, in achieving department and UO objectives, and in effectively using resources to those ends. In Chapter 3, Authority and Limits, you will gain an understanding of the governance framework relative to making expenditures at the UO. If you choose, you may test your understanding of this chapter by taking the online quiz. You will receive immediate feedback on your answers, and learn where to find additional related information. Thank you for your interest in learning about good decisions relating to expenditures at the UO. It can sometimes be confusing, working in a complex environment like the public sector. Finding a way through the maze of regulations, policies and procedures can be time consuming or difficult for even the most experienced administrator. Few individuals have the desire or the time to learn every applicable regulation, policy or directive, let alone every procedure that applies to a given expenditure. There are simply too many, and that is the reason for having a few specialists who devote their work time and energy to learning portions of the maze. As administrators with authority to make decisions to expend UO resources, you are in fact held accountable for ensuring that each expenditure is made in accordance with all applicable policies, regulations, rules, directives, procedures and good business practices. This chapter will provide the conceptual framework that you need, links to specific information and access to the expertise you may need for more specialized types of expenditures. It is important that you know enough to recognize when you must consult or get help from specialists. This chapter presents four sections to help you find your way through the maze:
Who Does UO Serve? It may seem like stating the obvious to enumerate the publics served by and through the UO. But everything flows from this simple, obvious concept. We serve students: the past, present and future students who seek an education. We serve the citizens, those who vote, pay taxes and reside in this state, this nation, and this world. We serve businessmen and businesswomen with whom we contract for goods and services. We serve our supporters and contributors. We serve our employees, the faculty, staff and student employees who devote their energies to accomplish the goals and objectives of the UO. And we serve our peer institutions with which we accomplish common goals. It may also seem at times that we serve the governments and bureaucracies related to these publics. This is not actually who we serve, but rather the medium in which our publics express to us their expectations, evaluate our processes and outcomes, and enforce their will upon us when we do not meet expectations. A governing body represents the interests of the publics mentioned in the preceding section. At times the requirement and priorities of the various governing bodies may conflict. There is a hierarchy and a peer relationship related to the governing bodies and their agencies of authority. The hierarchy is presented in the table below, with the top layer having authority over the subsequent layers. The first column lists the governing body. The second column lists examples of the medium through which the governing body expresses and enforces the will of the public it serves. The third column represents some specific examples of laws, regulations, policies and procedures that may apply to expenditure decisions at the UO.
Synopses of Important Regulations, Policies and Management Directives In general, the media for describing the expectations, standards, and methods of enforcing the will of the public include laws, statutes, regulations, rules, policies, internal management directives, and procedures. The following paragraph is a description of the main applicable laws, regulations, policies and procedures that describe and limit your actions and decisions. This is the tip of the iceberg, there is much more detail available, related to expenditures and other business activities. Federal Government The various federal rules and regulations which may impact expenditure decisions at the UO and are too numerous to list. Some specific examples are: IRS Section 132 Computation of Taxable Income, outlines the types of payments to employees that may be excluded from gross income for certain fringe benefits. This is important in determining if payments to an employee are tax reportable or not. There are certain types of reimbursements that may have tax considerations that are not readily apparent even if they are not intended to be compensation to the employee. Examples include travel by spouses, moving expenses, rental of formal clothing for a university event, auto allowances or cash awards to employees. OMB Circular A-21 Cost Principles for Educational Institutions, establishes principles for determining costs applicable to grants, contracts, and other agreements with educational institutions. OMB Circular A-21 is used in determining the allowable costs of work performed by colleges and universities under federally sponsored agreements and deals with the subject of cost determination. It is designed to provide that the federal government bears its fair share of total costs. Among other things, the document describes how federally sponsored projects may be charged costs directly or indirectly and outlines costs that are specifically disallowed. It also governs compliance for service centers that provide support to federally sponsored contracts and grants. See also Business Affairs Office guidelines on UO Service Center Fiscal Operating discussed below. In addition, specific grant requirements related to funds received from federal granting agencies such as the Department of Health & Human Services may impact expenditure decisions for projects funded by grants. State of Oregon ORS Chapter 244 Government Standards and Practices, describes the code of ethics public officials and employees must follow. Among other things this chapter defines conflict of interest, potential conflict of interest, and states that no public official shall use or attempt use their official position or office to obtain financial gain or avoidance of financial determent. Public official includes, but is not limited to all state employees. Examples of situations in which financial gain or avoidance of financial determent may occur include, but are not limited to:
See also: OAR 571-040-0210 Code of Ethics DAS OARs and Oregon Accounting Manual The Department of Administrative Services (DAS) is the central administrative agency of state government. DAS works to implement policy and financial decisions made by the Governor and the Oregon Legislature by issuing Oregon Administrative Rules. However, Senate Bill 271 gave the State System of Higher Education special authority to develop ORS and policies specific to Higher Education in areas including the area of public contracting and purchasing. Oregon State Board of Higher Education/Oregon University System (OUS) OUS ORS Chapters 351,352 and 354 establishes rules for the OUS specific to Higher Education. OUS OAR Chapter 580 establishes rules for the OUS for the areas including Board Procedures, Board Financial Powers, Accounting Policies, Gift Grant and Contract Management, and Institution Foundations. Board Internal Management Directives (IMD) establishes system wide policies for the seven-campus OUS and are approved by the State Board of Higher Education. FASOM establishes system wide financial accounting procedures for all seven universities and are issued by the OUS. UO OAR Chapter 571 establishes rules for the University of Oregon including the area of public contracting and purchasing. OAR Chapter 571-040-0210 Code of Ethics, is part of Division 40 of the UO OAR, Competitive Procedures for the Purchasing, Procurement and Contracting of Goods and Services. The chapter states university employees in contracting and purchasing must, among other things:
See also: ORS Chapter 244 — Government Standards and Practices UO Policy Statements UO Policy Statements are established by the institution and are generally issued or approved by the Presidents Staff. Unit Administrators should be aware of these policies and the impact they may have on expenditure decisions they make on behalf of the UO. UO Expenditure Guidelines Policy promotes proper stewardship of university funds by providing a broad statement on the appropriate and legal uses of University of Oregon funds. The Policy states that UO funds may be used for ordinary, reasonable and actual business-related expenses incurred in furtherance of the university’s mission. Expenditures not otherwise disallowed, may be made within the scope of reasonable financial management, and must be reviewed on a case-by-case basis by individuals with appropriate approval authority. For guidance on specific types of expenditures see the Business Affairs Expenditure Quick Reference that provides illustrative examples and links to relative rules, regulations, policy and procedures. BAO Policy BAO Policy statements are issued and approved by the BAO policy team. BAO policies relate to business functions that are the responsibility of the BAO. Unit Administrators should be aware of these policies and the impact that they have on the expenditure decisions they make on behalf of the UO. University of Oregon Service Center Fiscal Operating, describes the process for ensuring compliance with OMB Circular A-21. Service centers provide financially self-sustaining services to other departments of the institution. Service Centers that provide support to federally sponsored contracts and grants must ensure that charges for the use of service centers [by customers] should be designed to recover not more than the aggregate cost of the services over a long-term period. This policy defines allowable and unallowable costs and discusses the process that service departments must go through to demonstrate compliance. UO Unit Policies and Procedures are established by UO departments, schools and colleges. These units have the authority to establish complimentary policies and procedures as long as they are not less restrictive than any rules or regulations set by a higher authority. Where Can You Get Help? For guidance on specific types of expenditures see the Business Affairs Expenditure Quick Reference that provides illustrative examples and links to relative rules, regulations, policy and procedures. It is always good to seek advice and get second opinions from peers and/or technical experts. See some illustrative decision making examples. (Link out to actual experts and contacts – placeholder) What Did You Learn? Test your comprehension by taking the online quiz. It only takes a few minutes, and you will receive immediate feedback for “your eyes only.†Where Do You Go Next? This course is designed to be a stand-alone, self-directed tutorial. That means you are in the pilot seat as far as how much and in what order you explore the information. Review the list of chapters. Thank you for your interest in making sound expenditure decisions at the University of Oregon! |