Segregation of Duties– Sponsored Programs

transcript

Segregation of Duties–

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

managerial review– Appropriate documentation– Delegation of authority form

• Effective Date: October 1, 2008

Overview

• APM 2.25.55—Segregation of Duties• APM 2.25.55.01—Segregation of Duties-

Sponsored Programs• Supplements APM 2.25.55— Segregation of Duties

• APM 2.25.55.02 – Delegation of Authority Form • This training focuses on proper authorization,

verification, and managerial review to meet compliance requirements

Relationship of 2 Policies

Requirements

• Compliance requirements from the Office of Management and Budget Circulars include:– 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

Principal Investigator (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

Delegation Form

• Delegation form (Form) used to document delegation of authorization

• Only used for sponsored programs• Form maintained in the Department• Key document in course of audit

Delegation Form

Delegation

• Delegates for authorization must have:– Direct knowledge of the sponsored award– Awareness of terms and conditions of award– Awareness of compliance requirements– Knowledge of the transaction

• Delegate must be a University employee

Authorization

• Authorizer—appointed individual who can initiate activity for a sponsored program

• Authorization indicates the transactions meet the compliance requirements of:– Allowability– Allocability– Period of availability– Awarded budget

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 the award

• Why transfer is necessary

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)

Authorization

• Documentation for cost transfers: –Never

• “To spend out award”• “To move costs to grant”• “Due to pressure from UM System”

Verification

• All transactions must be verified–Confirms the accuracy and timeliness of

accounting transactions–Confirms that cost transfers are properly

documented with sufficient and/or substantial documentation

Managerial Review

• 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

Authorization Recording Verification PI (Managerial) Review

PI 1 PI PI

• In less than optimal circumstances, a PI may perform all 3 functions (authorization, verification, 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

Exception to Segregation

Managerial Review

• To confirm:– Appropriate segregation– Costs are allowable and allocable– All costs are posted to the award– Costs are within the period of availability

• Timely review of financial reports including a budget to actual comparison– Address deficits or excess costs– Remove unallowable costs

Differences from Financial Requirements

• Managerial review should be performed monthly to facilitate timely error corrections

• If verification is done by the PI, still need to review and sign budget variance report.

Frequently Asked Questions

• The following Frequently Asked Questions (FAQs) address practical application of this policy.

FAQ’s – Fiscal Office Impact

• 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,• agreement with University Collected Rules,

Business, and Accounting policies.

FAQ’s – SPO Impact

• How does the policy change the interaction between Departments and the Sponsored Programs Office (SPO)?–No interaction changes with the SPO.–Accounting Offices will still check PS

Authorization for authorized signatures.

FAQ’s – PI Impact

• How does the policy impact the PI?–The PI is responsible for authorization of

ALL transactions; the PI can delegate this responsibility.

–The Form is adequate documentation for delegation.

• 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).

• 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.

• Can a Co-PI delegate authorization?–Yes. The Co-PI has the same authority

and responsibility as the PI, as long as the Co-PI is: • a University employee, and• named by the sponsor on the award

document.

FAQ’s – Pre-Authorization

• Do expenditures on awards need pre-authorization?–No, a department may optionally require

pre-authorization.

FAQ’s – Authorization

• What documentation is required for cost transfers?–The authorizer should look for:

• substantial or sufficient justification,• timeliness of the cost transfer, and• EVR agreement with payroll information.

• What effect does the policy have for anyone authorizing transactions on an award?–The PI may delegate authorization 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.

• 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.

• 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.

–The Fiscal Officer must maintain the documentation.

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.

FAQ’s – PS Authorization

• Does PS Global Authorization give the Fiscal Officer authorization for sponsored award activity?–No, it only provides authorization for

Financial requirements, it does NOT meet the “direct knowledge” Compliance requirement.

–Delegates must have direct knowledge of the sponsored activity.

FAQ’s – Managerial Review

• Can the PI delegate managerial review?–No, the PI has ultimate responsibility for

the award and managerial review cannot be delegated.

• What should be maintained to document the PI’s managerial review?–The PI should sign and date the:

• budget to actual comparison report for the ChartField string,

• written justification for cost transfers, and• detail list of transactions for the award if

authorization and verification are not segregated.

• What should the PI look for in the managerial review?– Costs not related to the award, such as:

• 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.

FAQ’s – Delegation Form

• How does this policy change the current process for authorized signers?–The PI completes a Form to document

delegation for authorization.–Delegates must have:

• direct knowledge of activity,• awareness of terms and conditions,• awareness of compliance requirements, and• knowledge of the transaction.

• Can the PI use one Form to delegate authorization for multiple sponsored awards?–No. Each Form should reflect

delegations for an individual ProjectID.–This will facilitate filing and retrieval of

the Form to provide audit support for delegations of authority by ProjectID.

• Can one Form be used to delegate authorization for multiple individuals on one sponsored award?–Yes. Multiple delegations of

authorization can be indicated on one Form.

• What if one of the delegates for authorization leaves the Department?–The Form should be updated to reflect

changes in delegation. –All Forms must be kept as supporting

documentation.

• Can the PI put a dollar and/or time limit on the delegations?–Yes. However, the form should be

updated when changes occur.

• Where do I keep the Form?–The Form is retained by the Department

to support delegated authorization on an award.

–Some Sponsored Programs Offices may require a copy for the permanent award files.

• 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

required.

• What are the retention requirements for the Form?–The Form has the same retention period

as any documentation for the award• Three years after filing the final reports or

longer if required by the award, and• Until all external (OIG) audits are closed.

– It is maintained by the Department in either paper or electronic form.

FAQ’s – P-card

• When does authorization occur for a P-card transaction?–Written authorization may be provided

by the PI or delegate before the purchase is initiated.

–Written/electronic authorization by the PI or delegate must be provided before the monthly P-card reconciliation deadline.

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 P-card.

FAQ’s – Requisitions

• When does authorization occur for a purchase requisition or e-Pro requisition ?–When the allowability is documented,

such as an email, or approved by a delegate through WorkFlow.

–The PI or delegate should authorize all requisitions to be directly charged to an award.

Concluding Points

• Segregation of duties• Authorization, verification, and managerial

review• Delegation form and retention• Timely verification and PI review• And don’t forget to…

Maintain Documentation..

Additional References

• APM 2.25.55 – Segregation of Duties• APM 2.25.55.01 – Segregation of Duties-

Sponsored Programs• APM 2.25.55.02 – Delegation of

Authorization Form• BPM

213 – Adjustment of Income & Expense Items

• Fiscal Misconduct Reporting Line

Contact Information

Mary Juettner, CPA

Lead Accountant, Tiger Team

573-882-4451

juettnerm@missouri.edu

Segregation of Duties– Sponsored Programs

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