Research Policy Analysis and Coordination
6-200 Expenditure Authority and Responsibility
The authority to expend contract and grant funds is authorized under The Regents of the University of California Standing Order (S.O.) 100.4(n), "Duties of the President of the University," which states:
The President is authorized to permit expenditures against contracts, grants, and gifts, or against firm commitments thereon, provided that the contracts, grants, and gifts have been solicited or negotiated in accordance with established Regental policy.
This Presidential expenditure authority has these important features:
- Contract and grant expenditure authority is an expressly stated power of the President.
- Expenditure authority is derived from S.O. 100.4(n) whereas authority to enter into the contract or grant is derived from S.O. 100.4(dd). (See Chapter 13 for information about contract and grant authority.)
The Presidential authority to spend contract and grant funds under Standing Order 100.4(n) as well as the authority to solicit and enter into extramural awards under Standing Order 100.4(dd) have been delegated to Chancellors and Vice Presidents.
The delegation of authority from the President to Chancellors and Vice Presidents under the authority in Standing Order 100.4(n) permits "expenditures or commitments of funds against any approved research, training, or development contract or grant when a fully executed contract is in hand or a written notice of grant award has been received." Section 6-300, "Expenditure Advance Based on Firm Commitment," discusses the restrictions in this delegation of expenditure authority to Chancellors in cases where a fully executed contract or notice of grant award has not been received.
Chancellors may further authorize individual campus departments to incur contract and grant expenditures through authorization of the department's budget by the Accounting Officer. (See 6-230.) After the budget has been authorized by the Accounting Officer, the department may delegate signature authorization to specific individuals within the department to incur expenses. (See 6-240.)
The expenditure authorization process involves two separate but related actions:
- Chancellor's approval of department's budget, (See 6-231) and
- authorization of the agreement budget and appropriation of funds by the Accounting Officer with the concurrence of the Principal Investigator. (See 6-232.)
The Accounting Manual, Section D-224-17, "Delegation of Authority--Signature Authorization," states that the foundation of the expenditure process of a campus department, or program as the case may be, is the approval of the department's budget by the Chancellor. The Chancellor's approval of the department budget in essence constitutes a delegation (to the department) of the Chancellor's authority to expend. For extramural funds, such as gifts, contracts, and grants, budgets are established on acceptance, and, ordinarily, are documented in a communication from the campus Accounting Officer to the departmental administrators. All approved budgets are then entered in the campus general ledger.
Acceptance of the award agreement by the Contracts and Grants Officer under authority of Standing Order 100.4(dd) and approval of rebudgeting actions do not, in fact, constitute authorization to expend the awarded funds. With the concurrence of the Principal Investigator, the Accounting Officer has the ultimate responsibility for appropriating, recording and journalizing, extramural fund transactions as part of the University operating budget. The agreement budget is authorized when the Accounting Officer enters the appropriation into the campus' general ledger and the assigned fund and account number become part of the campus accounting system.
The Accounting Officer must establish the agreement appropriation in the campus accounting system (via a uniquely assigned fund number) to enable the Chancellor's delegated authority in a campus department to expend contract and grant funds. Because the expenditure authority under Standing Order 100.4(n) is restricted to contracts and grants that "have been solicited or negotiated in accordance with established Regental policy," actions of both the Contracts and Grants Officer and the Accounting Officer must precede contract and grant expenditures by the campus department.
Once the budget is established and the department has been authorized to expend the awarded funds for the budgeted purposes, individuals in a department who have delegated expenditure authority can proceed to incur expenses.Accounting Manual, Section D-224-17, "Delegation of Authority--Signature Authorization," II.C. states:
Before budgeted funds can be expended, a record of the signatures of those authorized to originate and approve specified departmental business transactions must be provided to administrative and service departments. Such delegations include authorization to sign purchase requisitions, service department orders, requests for issuance of a check, payroll time reporting forms, etc. This requirement applies to the Department head and each staff member to whom authority has been delegated…
The Signature Authorization or Cancellation Form U242-1 (Exhibit I in Section D-244-17), or its equivalent, is the official record used to delegate expenditure authority and to record signature specimens. The U242-1 states, "A signature authorization is a delegation of authority and remains in effect until cancelled." In an electronic environment, some type of document is required to record the assignment of electronic signatures or authorization codes and the approval hierarchy levels and codes associated with a particular function or database.