The University has many forms and instructions on how to handle situations in the legal and most efficient way. To follow such instructions effectively, it helps to understand the general principles behind the process. Some of these principles, such as the need to document payments, are common sense. We learn about these when managing our personal finances, such as filing our income tax returns. Other principles, especially those that apply uniquely to universities or uniquely to this university, may not be obvious.
Most actions that are common sense are legal. However, this is not always the case. Some actions may be legal only if approached in a particular way. For example, some expenditures can be made using money from a designated account but not from a state account.
Rule of Thumb: Rather than ask if you can do "X.", ask "how can we do X?" If X is legal and sensible, we will provide the appropriate steps for the process. If X is not legal or sensible, we will explain why not and try to provide some other options.
Most policies provide for exceptions when a good reason exists for the exception. Exceptions must be approved by the Vice President in charge of your area. It helps to know when these approvals are needed so they can be obtained ahead of time. This will prevent documents from being returned, and therefore delaying processing.
Checking first is always easier than cleaning up a situation afterwards. Waiting until the last minute or being unaware of the rule does not prevent you from getting an exception or special handling; however, it may increase the time needed to process the paperwork. Confusion can be avoided or minimized by clarifying what has to be done or how it has to be done before submitting the paperwork or making the decision to proceed.
Appearances Are Important
On every sensitive financial or personnel action, stop and consider how it could be perceived by those affected by the action as well as third parties - such as auditors, the media, and the general public.
Conflict of Interest
The State of Arizona has passed conflict of interest statutes to ensure that employees do not use their position with the State to benefit themselves or their relatives or to the detriment of the State. These statutes require that an employee disclose any full or partial ownership or other substantial interest that the employee or a relative of the employee has in any type of entity that does any manner of business with the University. This disclosure must be done by filing a Disclosure of Substantial Interest Conflict of Interest form found on the Procurement and Contracting website. Employees who have a conflict of interest with a party may not act on behalf of the University in any aspect of an agreement with that party.
What Could Happen?
Many actions that we take may have effects that we don't intend. When beginning a new project, check with appropriate authorities beforehand to determine what problems might be anticipated and avoided, what authorizations might be needed, or if there are any special requirements. For example, many departments get involved in remodeling facilities, wiring or installing new equipment. The departments to contact in these circumstances may include Facilities Management, Telecommunications or Risk Management. Some problems that have occurred due to lack of proper coordination include the following:
- Much of the wiring strung for local area networks on campus does not meet the fire code. During a fire, these cables could give off toxic fumes.
- Telephones have been moved to different jacks resulting in incorrectly identifying the phone location and thus misdirecting a response to a 911 call.
Documentation Detail and Consistency
Documents submitted for processing must be properly completed. University staff approving the document will call you or send a document back for correction if the document is incomplete or if something is unclear, which causes delays in processing. Auditors, promotion and tenure committees, and the courts make their decisions about a case based on what is in the record. If the evidence is not there, the action is likely to be turned down.
You must ensure consistency between forms and the supporting documentation. If necessary, explain inconsistencies in a note or on the paperwork itself. Provide enough detail to ensure that an auditor, committee, or lawyer, unfamiliar with the situation and perhaps unfamiliar with University practices, will understand what has happened and find no gaps in the record. What is the best possible documentation?
- The best documentation is obtained when proper, complete and original records are maintained at the time (document as you go).
- The second best is an explanation by whoever created the original documentation.
- The third best is an explanation by whoever approved the original documentation.
- The least effective is documentation that consists of notes taken over the phone when contacted by the office requiring the support.
If there are problems with documentation, it is best to correct them at the time, rather than try to deal with them later. Following are some examples of areas where inconsistencies or lack of detail often occur:
Once you make a choice in hiring, merit evaluation, or promotion and tenure, you must be able to document the reasons for this decision. This includes documentation of peer committee actions: for example, number of votes. With classified staff especially, departments must keep records to substantiate personnel actions later (for example: exceptional performance which might justify an exceptional merit raise, or problems with an employee).
Many people are puzzled by the term "reasonable expenses." The easiest way to think of this is that reasonable costs are those directly related to the performance of a contract. For example, paying for a taxi for an independent contractor may be reasonable but paying for personal long distance calls generally is not. Paying for an independent contractor's food is reasonable but paying for his or her wine is not. When in doubt, don't.
There must be consistency or an explanation of any differences between a requisition document and its attachments, such as a letter of agreement. For example, two air fares on a purchase requisition may have the same destination but different costs. Although fares vary depending on what day of the week one flies, the reason for the cost variance may not be obvious and an explanation should be provided.
If a program is advertised as sponsored by the UA, then revenue from the conference should go to the UA and all purchases (such as for hotel and conference facilities, catering, printing, etc.) must be processed following University purchasing and bid procedures. Payments should only be sent to the UA Foundation if the conference is sponsored by the UA Foundation.
The University subscribes to the philosophy of a strong centralized purchasing function to ensure compliance with the State of Arizona procurement laws. Only the Director of Procurement and Contracting Services and persons delegated by the Director are authorized to commit the University for a purchase of goods or services. Be sure to allow sufficient lead time for Procurement and Contracting to process your orders - don't make prior arrangements with a vendor and then ask the Purchasing department to formalize the agreement. Unauthorized purchases will be considered a personal obligation.
At the University of Arizona, goods or services ordered in one fiscal year from a general operating account must be received by June 30 to be paid from that fiscal year's budget. If the order is delayed beyond June 30, the funds will have to come from next year's budget.
Individual employees of the University are not authorized to sign a contract or bind the University on their own authority. The Arizona Board of Regents has granted signature authority to certain officers of the University. In accordance with Arizona Revised Statutes, any unauthorized person incurring an obligation for the University may be held personally liable.
Sponsored Projects Services is responsible for central grants and contracts administration, including proposal review, award processing, account setup and closeout, budget maintenance, financial reporting, cash management, expenditure preapprovals, accounting error corrections, property administration, and audit contact.
Departments frequently request the establishment of "recharge style" accounts for the purpose of charging other accounts - usually grant or contract accounts. For example, a department may generate goods or services that are used by other departments and they want to recover their costs. These activities, referred to as "service centers," are subject to the University's Service Center Policy, which provides guidelines to ensure compliance with Federal and accounting requirements. Departments entering into such activities must be willing to devote time administering these accounts because the process of establishing and maintaining recharge activities requires additional documentation and tracking to support the rates charged.
Financial Practices/Internal Controls
Trust your people but check regularly. Accounting policies and procedures have been established to ensure accuracy of the financial records, compliance with laws and regulations, and effective internal controls over financial activities. Internal controls require "separation of duties" and standard business checks and balances in handling financial matters. These rules do not imply a lack of trust but rather are intended to make the organization safer and sounder, more efficient in its operations and more effective in meeting its objectives by discouraging negative actions and supporting positive actions. Following are some examples of internal control procedures.
- The same person should not prepare and approve a document. For instance, the person preparing a payroll document should not also approve or sign it. The review process provides reasonable assurance that the time has been recorded correctly and discourages illegal actions, such as recording more time for an employee than was actually worked or recording time for a nonexistent employee.
- The person authorizing a payment should not be the same person who receives or delivers the payment. This discourages illegal actions such as an employee charging items for personal use to the University.
- Cross training of staff. Besides providing control, it is reassuring to know that others in the office understand the rules and procedures.
Indirect Cost Recovery (ICR)
Under current Federal rules, we have no obligations to spend ICR money in any particular way. The University has generally reallocated ICR money to support areas based on their relative contribution to the overall pool of indirect costs. The Federal government negotiates our ICR rate after a review of costs incurred, applying the principles of OMB Circular A-21.
Because the UA has used ICR funds prudently in the past, the Arizona legislature has allowed us to allocate the funds as we see fit. This program must be maintained to preserve our current flexibility.
The University has established comprehensive policies and procedures for employment to ensure compliance with Federal and State legal requirements. There will always be paperwork that must be completed BEFORE a person can begin working at the University.
It is very important to check with the person in your department or the central administration department responsible for handling personnel issues to ensure that all requirements have been considered and addressed. It is much easier to prepare the paperwork correctly to begin with than to correct something that was done wrong. For example, all employees must submit proof of citizenship or authorization to be employed in the United States. With student hires we must ensure that the position will not affect his or her eligibility for financial aid. One problem that can result from incorrectly processing new hires is that the new employee may not get their first paycheck in a timely manner.
The University is committed to equal opportunity and affirmative action. The Office of Institutional Equity is responsible for providing a work and educational environment of excellence for all persons, guaranteeing equal opportunity to all personnel, students, and sponsored programs and activities regardless of race, color, religion, sex, age, national origin, handicap, disabled veteran or Vietnam Era Veteran status. This task is inherently shared with all administrators. Equal opportunity and affirmative action apply but are not limited to the following: employment, upgrading, demotion and transfer, recruitment and recruitment advertising, layoff and termination, rates of pay and other compensation means.
Equal Treatment of Comparable Groups
All personnel actions involve two processes: 1) formulating standards that will define a group of people; and 2) treating all members of that defined group in the same way. Some less obvious examples of this principle follow:
- Procedures on interviews and opportunities offered to each candidate at each stage in the recruiting must be the same. In the case of faculty, the standards for promotion and tenure must be the same for each member of a defined group. For example, our procedures should ensure that we don't have some candidates listing articles both in press and in print while other candidates list only articles in print.
- Adjustments must be done in an egalitarian manner. General adjustments for employees paid from soft money (generally, any non-state accounts) cannot exceed that of state funded employees, and vice versa. The money allocated for merit adjustments for soft money employees as a percent of the soft money salary base cannot be greater than the percent approved by the legislature for state funded employees. This is true even if soft money is available for larger adjustments.
Compensation in addition to the amount specified for full-time personnel is only permitted under certain circumstances and, when permitted, the amount of supplemental compensation is limited by policy.
If a person is already employed as one full-time equivalent (1.0 FTE) and takes on an additional duty within their current position, we can't pay that person additional salary. For instance, we cannot pay a research professional extra to teach a course if the professional is already working full time. However, if the person takes on additional duties outside of their current position, supplemental compensation may be possible.
For an employee on academic appointment, supplemental compensation is possible for certain instructional and other activities, such as summer session classes, credit-bearing courses offered off-campus through the Outreach College and instruction to noncredit conferences. For professional staff on fiscal year appointments, supplemental compensation is possible for certain instructional activities, but such compensation in any amount is not available without prior approval by the President.