The person who has the highest authority within the organization retains the responsibility and authority, even when they choose to delegate this authority to staff. Use project-related attributes to configure approval rules in the Spend Authorization Workflow. 5. These attributes let you route spend authorization approval notifications to project team members, project task manager, and the hierarchy of the project task manager. who takes appropriate action. Similar to internal support services, the delegation of authority between departments may be required and performed by the minister or the deputy of the minister. Delegation also empowers staff to engage in decision making and helps them develop skills by learning the importance of their delegated roles with respect to the appropriate use of public funds. The journal entry is normally made automatically in a departments financial system when the payment is made. This understanding helps ensure that spending and financial authorities are delegated to the appropriate role and level, and at the appropriate dollar limit. The CFO should approve the departments sampling plan. Once a transaction is authorized for payment, the commitment in the financial accounts should be released, as money is no longer on hold for the payment. A delegated authority comes into effect when the minister and/or the deputy head signs the delegation chart. Blanket authority documentation should be retained by the department and should be attached manually or electronically to each transaction sent for payment (in the example above, every month a section34 payment is made for $100, thus lowering the balance available within the blanket authority). completes the Request Authorization page by clicking the Authorizations When using statistical sampling techniques such as those described above, the major factors include the level of accuracy needed in the results and the expected level of error in the transactions. Managers approve or take other actions on them. Note. Sampling is used to draw conclusions about the entire population based on the results of less than 100% (that is, a sample) of that population. An accounting correction will be necessary, payment authority (section 33 of the FAA) (this box is circled in red to highlight it will be discussed in section 4.5), the payment is not a lawful charge against an appropriation, the payment would result in an expenditure in excess of the appropriation, the payment would reduce the balance available in an appropriation, making it unable to meet the commitments charged against it, account verification (section34 of the FAA) by a delegated authority has been performed, the payment will not result in an unlawful charge against the appropriation, impact on the financial statements if a control error were to occur in a payment. In addition to the normal expenditure initiation and commitment authority requirements, the blanket authority should also specify: The blanket authority should be authorized by the person who has delegated authority. If preparing a spend authorization for yourself. a table of equivalent positions that lists the specific position titles (delegation of authority is to a position, not an individual), the requirements and process for being granted a delegation, for example, any training to be undertaken, the individual responsible for maintaining and overseeing the chart, an escalation process in case of revocation of delegated authority, the periods during which the delegation applies, the level of authority (including value limits and cost centres or budget, and further restrictions by the delegating manager, as appropriate), each individuals electronic authorization is unique, the individual providing the authorization can be identified, the integrity of the authorization is maintained to ensure accountability and protection of the person assuming responsibilities (for example, the authorization cannot be tampered with or altered inappropriately), the integrity of the delegated authorities reflected in the system is protected (for example, the authorities and limits for a delegated individual cannot be tampered with or altered inappropriately), their application controls to ensure they are being applied appropriately and consistently, identify and document the key risks associated with each step of the process, ensure that controls are in place as designed, validate that the controls provide the required assurance level, the number of instances of non-compliance, authority was provided for a payment when the person does not have that authority, evidence that the delegated authority has performed his or her delegated activities is missing, a signature confirming that the delegated authority has performed his or her delegated activities is missing, reducing the value of the transaction that can be authorized or, requiring a second signature, such as from a manager, before the transaction can be subject to a payment authorization, implement restrictions (such as reducing the level of authorization) or, expenditure initiation authority (this box is circled in red to highlight it will be discussed in section 4.1), obtain services, goods or construction that will involve expenditures through a contract, standing offer, purchase order, Memorandum of Understanding or other agreement, make transfer payments that will involve expenditures through a contribution or grant agreement, the planned transaction is for a legitimate operational or business requirement, an authority exists that allows for the expenditure of public funds for that requirement, the planned transaction represents the most efficient and economical means to meet the requirements, commitment authority (section32 of the FAA) (this box is circled in red to highlight it will be discussed in section 4.2), the decision to spend (expenditure initiation authority), the confirmation that sufficient funds are available (commitment authority), reviewing each planned expenditure to ensure that there is sufficient unencumbered balance to cover all applicable costs and that the related policy restrictions are addressed, authorizing the planned expenditure before entering into the contract, human resources action or other arrangement, and making a commitment against the appropriation, recording a commitment at the expected value and seeking advice from the CFO if it is impractical to record commitments individually, establishing, maintaining and controlling records associated with commitment authority, as indicated in subsection32(2) of the FAA, ensuring that commitment information is provided to the person who has delegated transaction authority. Users are encouraged to review the Spend Dynamics Two-Factor Authentication Guide. The verification and certification of payments and interdepartmental settlements involves ensuring that sufficient documentation exists to demonstrate that account verification has taken place and that certification authority (section34 of the FAA) has been performed. Managing expenditures is central to achieving the objectives of departments and of the government as a whole. BMO MasterCard moving to two-factor authentication and paperless In such cases, the transfer of authorities and functions are subject to the prerogative of the prime minister. Departments are to conduct either prepayment account verification or post-payment account verification. Workers initiate these authorizations. An escalation process should take the following into consideration: The CFO may choose to amend or revoke the persons delegation. It is advisable to periodically verify that commitments have been released. Attaching the spend authorization to the expense Account verification involves verifying that: It is important to use a checklist if the account verification process has recently changed or if there have been previous multiple and ongoing errors related to the performance of account verification. The risk assessment should be periodically reviewed and updated according to the departments operating environment and system of internal controls. Spend Authorizations. 3215 PR.03 Yale Spend Authorization (Cash Advance) Used when the Spend Authorization line item is being paid by a Program, Grant, Gift, or Project 5. PDF Travel FAQ: Spend Authorization & Expense Report Scroll down the page to locate the Spend Authorization Lines section and click the Add button to add a new expense to the spend authorization. What Is Authorization? Definition & Examples | NetSuite The appropriation act is the vehicle through which expenditures from the Consolidated Revenue Fund are authorized in order to pay for government programs . The results of the post payment account verification should be periodically reported to management and the CFO to identify systemic errors and track error rates. These authorities are governed by the legislative requirements set out in the Financial Administration Act (FAA) and, in the case of transaction authority, by Public Services and Procurement Canada. 3. The signature of either the minister or the deputy of a minister is obtained. Like random sampling, the accuracy of the results can be estimated from the sample, although the techniques for doing so are more complex. The following are examples of compensating controls: Additional oversight or other control measures should be documented, along with the reasons why the segregation of duties is not possible. In such cases, it is advisable to have compensating controls in place, for example, having the manager review the payments on a monthly basis to confirm they were appropriately made. Departments are encouraged to delegate down as low as possible in the hierarchy, keeping in mind the organizations risk environment, to the level supported by their controls. However, the delegation chart will require the signature of the departments minister or deputy head, as appropriate, when the change impacts what delegations can be exercised, their limits and by whom. The employee 1. PRC:PON: Rejected Supplier Spend Authorizations and Approved Supplier Subsection4.1.7 of the directive requires the CFO to review the delegation of spending and financial authorities at least annually. Before performing commitment authority under section32 of the Financial Administration Act (FAA), individuals should verify that: In addition, for acquisition cards, the responsible manager should verify that: Before performing certification authority under section34 of the Financial Administration Act (FAA), the individual who has that authority should verify that: A sampling plan, based on the assessed risk and the state of a departments internal controls, determines the extent to which medium-risk or low-risk transactions are subject to a review before or after exercising payment authority. This figure provides an overview of delegating spending and financial authorities by addressing specific questions shown and providing the reader where to find the answer within section 3 of this document. A limited review could involve confirming that: It may not be cost-effective for persons who have delegated payment authority to review all transactions that have been verified and certified by an individual who has certification authority. An example of a checklist for certification authority is provided in AppendixD. The signatures, either written or electronic, of the person who has delegated certification authority would be authenticated before or after the transaction is processed. According to subsection4.1.1.2 of the directive, delegations are to positions identified by title and not to individuals identified by name. Therefore, regardless of a persons status as an employee or a nonemployee (for example, a contractor), that person may be delegated spending or financial authority. an appropriation by Parliament to which the payment will be charged; an item included in the Estimates then before the House of Commons to which the payment will relate; a commitment limit in an Appropriation Act to which the payment will relate; or. The delegation chart and supporting notes are key controls in the expenditure management process. The following financial documentation should be retained in paper or electronic format: The retention of documents is an important part of the auditable evidence component of financial management. Authorization determines the level and type of access to resources that a user has. The second is for the minister to confirm having seen the chart for information purposes, when the deputy head has been determined to be the deputy of a minister and is signing the chart. Description: Enter a description of the request to which will be used as the title of the spend authorization. Spend Authorization - Business Operations - Confluence A chart is often accompanied by supporting notes, specimen signature documents, electronic authorization rules and other instruments. If commitment reporting results in expenditures exceeding the departments appropriations, and expenditures cannot be managed within the department, the departmental CFO must notify the Treasury Board of Canada Secretariat as soon as possible. The delegation of this authority is subject to legal and/or policy limits. To avoid double commitments for the same transaction in the financial system, the hard commitment would reference any pre-existing soft commitment, commitments should be recorded individually. What is expenditure initiation authority? likelihood of the control error occurring, including: the results of previous internal control testing, auditable evidence exists demonstrating that account verification under section34 has taken place. Travel is reviewed centrally, so approval times can vary widely. INFORMATION The person who exercised certification authority should be made aware of the error, with corrective action taken to ensure that the mistake does not reoccur. For employees with multiple positions: Spend Authorizations and Expense Reports will route for approval to the employee's primary manager (with the exception of Expense Reports for Pcards).
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