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Financial Delegated Authorities Policy: 1 Purpose
Financial Delegated Authorities Policy: 1 Purpose
Finance Policy Group
1 Purpose
To provide a framework of financial delegated authority within which Victoria University of
Wellington and its subsidiaries (the “University”) can effectively manage and safeguard its
financial resources. Given the University is a Crown entity, this must be achieved with respect
to the principles of public accountability, and compliance with legislation including, the Victoria
University of Wellington Act 1961, Public Finance Act 1989, and the Education Act 1989.
The establishment of a robust financial delegated authority framework is necessary to ensure
consistency of practices amongst Schools, Central Service Units, and subsidiaries, and to
prevent situations where mishandling of funds can arise.
This policy is the authority and discretion to commit University funds, and the subsequent
payment for goods and services purchased in the course of University operations. This policy is
an integral part of the University’s wider model of financial governance.
2 Organisational Scope
This is a Universitywide policy and shall apply to all staffmembers of the University and its
entities.
3 Definitions
For purposes of this policy, unless otherwise stated, the following definitions shall apply:
Approved Budget: The current or any supplementary or additional budget approved
by Council. The budgets show revenue and expenditure targets by
major costcentre, i.e. Schools, Institutes/Centres and CSUs.
Capital Expenditure: Also known as “CAPEX”. A purchase of an item of property, plant
or equipment, or the subsequent development or improvement of
an existing asset at a cost exceeding the minimum capitalisation
level.
CEO: Chief Executive Officer
Crown Entity: The University is defined as a Crown entity by the Public Finance
Act 1989, by virtue of being an institution “established under Part
XIV of the Education Act 1989”.
CSU: Central Service Unit
Delegated Authority: The granting of power to a staffmember to act on behalf of one or
more others, for an agreed purpose.
Donations: A gift of University funds or resources to an external party,
without any obligation for that external party to provide goods or
services in return. Includes sponsorship, exgratia payments, and
the Māori custom of “koha”.
Koha: A gift of University funds or resources to an external party,
without any obligation for that external party to provide goods or
services in return, made in the context of Maori custom.
Grants: Internal grants and funds received from external parties for
research purposes. Internal grants are only valid after approval of
the appropriate Research Committee has been granted.
Operating Expenditure: Also known as “OPEX”. Expenditure incurred in the course of
daytoday University operations.
Purchase: A transaction involving release of University funds in exchange for
goods or services.
Staff: Any person with an employment agreement with the University
(or group entity) on a permanent basis (including full and part
time), and any person with a fixed term contract with a term of
greater than six months.
All monetary amounts referred to in this statute are in New Zealand dollars and are exclusive of Goods
and Services Tax.
4 Policy Content and Guidelines:
4.1 Staff
Only Council and staff may have financial delegated authority. Refer to 4.10.1(1)(b) for
additional information.
4.2 Compliance
4.2.1 Monitoring of Compliance
(a) It is the responsibility of the Vice Chancellor and the Chief Financial Officer to ensure
that there are adequate financial controls to safeguard the financial resources of the
University.
(b) Full compliance with this policy is required by all staff. Compliance will be monitored
and all deviations will be reported by the Chief Financial Officer to the ViceChancellor
in the first instance, as soon as practicable.
(c) Periodic reporting of compliance will be delivered by the Chief Financial Officer to
Audit Committee.
4.2.2 Consequences of NonCompliance
(a) Failure by a staffmember to fully comply with this policy may amount to misconduct or
serious misconduct by the staffmember, which may result in the University taking
disciplinary action.
(b) Where a staffmember breaches the policy, the University may:
(i) seek reimbursement of costs directly from the staffmember;
(ii) refuse to use University funds to meet the purchase commitment.
4.3 Financial Delegated Authority
The Education Act 1989 charges Council with the responsibility for the ultimate approval of all
expenditure of University funds. Section 200(3) Bank Accounts prescribes that: “The Council
shall properly authorise every withdrawal and payment of money from any of the institution’s
bank accounts.” Section 222 Delegation by Council empowers the Council to delegate this
responsibility.
4.4 Delegated Authorities Specifically Excluded
Delegated authorities specifically excluded from the scope of this policy are:
(a) Power to: open bank accounts, use financial instruments or enter into a financial
arrangement, establish a debt arrangement, set funding requirements, hedge foreign
currency receipts or expenses, or approve counterparties. Refer to the Treasury Statute.
(b) Power to: establish preferred supplier agreements, or enter into significant purchase
contracts.
(c) Power to: make employment related decisions. Refer to the Human Resources Toolkit.
(d) Power to: establish or modify student fees. Refer to the Fees Statute.
4.5 Levels of Financial Delegated Authority
4.5.1 Staff Levels
(a) The financial delegated authority framework has been established, with financial
authority being delegated to levels of staff:
(i) Level 1 ViceChancellor
(ii) Level 2 Individual SMT members
(iii) Level 3 Heads of Schools; Heads of CSUs; CEOs of Subsidiaries
(iv) Level 4 CSU Managers; Institute/Centre Directors
(v) Level 5 Supervisory Staff; Administrators
(vi) Level 6 All staff with nil financial delegated authority
(b) The levels of staff used in the financial delegated authority framework are based on the
Human Resources Delegation Framework.
(c) For the OPEX financial delegated authority framework, sublevels have been set for
staff levels 4 and 5. These sublevels allow appropriate financial delegated authority to
be assigned to staff with a staff level 4 or 5 classification.
4.5.2 Approval of Financial Authority
(a) The financial delegated authority for the ViceChancellor (staff level 1) is approved by
the Council, and is outlined in the Financial Delegated Authorities Statute.
(b) The financial delegated authority for staff levels 2, 3, 4, 5, and 6 of the OPEX and
CAPEX frameworks are approved by the ViceChancellor.
4.6 Financial Delegated Authority for Operating Expenditure
4.6.1 OPEX Financial Delegated Authority Framework
Staff Level Financial Delegated Authority
2 $500k
3 $100k
4(a) $75k
4(b) $50k
4(c) $35k
4(d) $20k
5(a) $10k
5(b) $2k
5(c) $500
6 No authority
4.6.2 Commitment and Approval
(a) The delegated authority framework for OPEX establishes the authority and discretion to
commit and approve payment of University funds.
(b) The financial delegated authority for each staff level represents the maximum value of
an individual OPEX purchase that may be committed to, and/or approved by a staff
member belonging to that staff level.
4.6.3 Approved Budget
(a) The Approved Budget for a budgetcentre is the primary authority over OPEX. A staff
member must only commit University funds where there is sufficient budget to cover
the purchase, regardless of their financial delegated authority.
(b) Where there is insufficient Approved Budget to cover an OPEX purchase, approval for
the resulting variance to the Approved Budget must be obtained from the Vice
Chancellor prior to any commitment of University funds.
4.7 Financial Delegated Authority for Capital Expenditure
4.7.1 CAPEX Financial Delegated Authority Framework
Staff Level Financial Delegated Authority
2 $500k
3 $100k
4 No authority
5 No authority
6 No authority
4.7.2 Commitment and Approval
(a) The delegated authority framework for CAPEX establishes the authority and discretion
to commit and approve payment of University funds.
(b) The financial delegated authority for each staff level represents the maximum value of
an individual CAPEX purchase that may be committed to, and/or approved by a staff
member belonging to that staff level.
4.7.3 Approved Budget
(a) The Approved Budget for a budgetcentre is the primary authority over CAPEX. A staff
member must only commit University funds where there is sufficient budget to cover
the purchase, regardless of their financial delegated authority.
(b) Where there is insufficient Approved Budget to cover a CAPEX purchase, approval for
the resulting variance to the Approved Budget must be obtained from the Vice
Chancellor prior to any commitment of University funds.
4.8 Purchase Cards
(a) The financial delegated authority frameworks at 4.6 and 4.7 apply to all purchases made
with a University Purchase Card.
(b) A Purchase Card can only be issued to a staffmember with the approval of a staff
member from staff levels 1, 2, or 3.
(c) As an exception, individual SMT members’ Purchase Card expenses are to be approved
by the Vice Chancellor. A monthly Purchase Card report detailing SMT members’
expenses is to be prepared by Finance and given to the Vice Chancellor.
4.9 Purchase Splitting
(a) Purchase transaction amounts may not be split into smaller amounts, nor across time
periods, in an attempt to suit the financial delegated authority of a staffmember.
(b) Any attempt to split a purchase transaction amount will be considered a breach of the
policy and 4.2 will apply.
4.10 SubDelegation of Financial Delegated Authority
4.10.1 SubDelegation
(a) Individuals with financial delegated authority have the right to subdelegate, all or part
of that authority to another staff member.
(b) Financial delegated authority cannot be subdelegated to nonUniversity staff without
the prior approval of the ViceChancellor.
(c) Subdelegation can be made on a shortterm or longterm basis.
(d) Where financial delegated authority is vested in a group, this cannot be subdelegated to
either another group or an individual staff member, without the consensus of that
group. The rules of consensus operating for that group will apply.
(e) Subdelegation of financial delegated authority is a transfer of authority but not of
responsibility, hence the onus is on the staff member to ensure that subdelegation is
made with due care.
(f) Where financial delegated authority is subdelegated to an individual staff member with
existing financial delegated authority, the effect is not cumulative. Their effective level
of financial delegated authority will be the financial delegated authority prevailing for
the staff level the subdelegation notionally places them in.
(g) Subdelegation of financial delegated authority does not constitute a promotion.
(h) A staff member with subdelegated financial authority cannot further delegate that
authority to another staff member.
(i) Financial delegated authority and subdelegated financial authority are assigned to an
individual staff member and are directly linked to their employment position. All
authority remains with the position if a staff member leaves.
4.10.2 Notification
(a) Written notice of a subdelegation must be sent to the Chief Financial Officer using the
designated notification method.
(b) The staff member being granted subdelegated financial authority must be advised of
this in writing.
4.11 Revocation
(a) The ViceChancellor has the right to revoke the financial delegated authority or sub
delegated authority from any staff member, without prior notice.
(b) Staff in the level 2 or 3 classification have the right to revoke the financial delegated
authority or subdelegated authority from any staff member within their School or CSU,
without prior notice.
(c) A staff member who has subdelegated financial authority to another staff member, has
the right to revoke that subdelegated financial authority, without prior notice.
(d) Written notice of a revocation must be sent to the Chief Financial Officer.
4.12 Limitation of Application of Financial Delegated Authority Framework
(a) The ViceChancellor may at any time resolve to limit the application of the financial
delegated framework for OPEX or CAPEX to a particular expense or transaction type.
(b) The ViceChancellor has deemed that a number of expenses and transactions are not
covered by the financial delegated framework for OPEX or CAPEX, and as such they
have their own specific financial delegated authority.
4.13 Specified Financial Delegated Authorities
4.13.1 People Expenses
(a) The Director, Human Resources has been delegated the financial authority to approve
and release payment of people expenses.
(b) The Director, Human Resources has the right to subdelegate this financial authority to
appropriate Human Resources staff.
4.13.2 Bonus and Additional Emolument Payments
(a) If a manager wishes to make a bonus payment to an employee not provided for in the
employment agreement or an additional bonus payment over the amount provided for
in the employment contract of greater than 5% of base remuneration, approval must be
received from that manager’s own reporting manager.
(b) If a manager wishes to pay an employee an additional emolument over and above their
normal salary for additional duties completed, this will require the approval of their
Level 2 or above manager.
4.13.3 Grants
(a) A grantholder has the financial delegated authority to spend the total balance of their
grant within the constraints of the terms and conditions of the grant.
(b) The rules of subdelegation outlined at 4.10 apply to grants.
4.13.4 Travel
(a) Due to the element of personal benefit that may be associated with both domestic and
international workrelated travel, a staff member cannot approve their own travel
arrangements.
(b) All travel arrangements must be approved by the staff member’s line manager.
(c) As an exception:
(i) Travel bookings and expenses less than $500 for the Chancellor and Council
members will be administered and approved by the Secretary to Council.
(ii) If the Chancellor’s travel booking is greater than $500, approval may be granted
by Council resolution or with the approval of the Chief Financial Officer, with
subsequent notification to Council via the Secretary to Council.
(iii) If the Chancellor’s travel expenses are greater than $500, approval for payment
processing may be granted by the Chief Financial Officer and final approval by
the Chair of the Audit Committee.
(iv) For Council members’ travel booking and expenses greater than $500, approval is
given by the Chancellor or, in his/her absence, the Pro Chancellor.
(v) The ViceChancellor and SMT members can approve their own local travel
(including transTasman) up to a commitment of $2,500 within the approved
budget.
(vi) Overseas travel bookings (excluding transTasman) for the Vice Chancellor are to
be approved by the Chancellor or, in his/her absence, the Pro Chancellor.
(vii) All travel expenses incurred by the Vice Chancellor are to be approved by the
Chancellor on the recommendation of the Chief Financial Officer, with a copy of
documentation (including a monthly printout of purchase card transactions) to
the Chair of the Audit Committee.
(viii) Overseas travel bookings (excluding transTasman) for SMT members are to be
approved by the Vice Chancellor or, in his/her absence, the Deputy Vice
Chancellor.
(ix) Travel expenses incurred by SMT members are to be approved by the Vice
Chancellor.
(d) The rules of subdelegation outlined at 4.10 apply to travel.
4.13.5 Reimbursement of Expenses
(a) During the course of University operations a staff member may be required to use
personal funds to pay for University related expenditure. A staff member cannot
approve their own request for reimbursement of that expenditure.
(b) Reimbursement of expenditure is limited to expenditure that was wholly related to
University operations.
(c) Reimbursement of expenditure is limited to expenditure where the goods or services in
question have already been received and/or consumed.
(d) All requests for reimbursement must be approved by a direct manager (or a staff
member of a staff level at least equal to the direct manager) who has sufficient financial
delegated authority to cover the transaction amount.
(e) The rules of subdelegation outlined at 4.10 apply to reimbursement of expenses.
4.13.6 Funds in Advance
(a) During the course of University operations a staffmember may require funds in
advance, in anticipation of University related expenditure. This situation is typically
when a staff member will be away from University Campus and they cannot have
knowledge of the exact amount or nature of expenditure required.
(b) Granting of funds in advance is limited to situations where expenditure will be wholly
related to University operations.
(c) All requests for funds in advance must be approved by a direct manager (or a staff
member of a staff level at least equal to the direct manager) who has sufficient financial
delegated authority to cover the transaction amount.
(d) The rules of subdelegation outlined at 4.10 apply to reimbursement of funds in
advance.
4.13.7 Professional Membership Fees
(a) Due to the element of personal benefit that may be associated with the University
meeting the cost of membership fees to a professional body, a staff member cannot
approve payment of their own professional membership fees.
(b) All professional membership fees must be approved by a direct manager (or a staff
member of a staff level at least equal to the direct manager) who has sufficient financial
delegated authority to cover the transaction amount.
(c) The rules of subdelegation outlined at 4.10 apply to professional membership fees.
4.13.8 Club Memberships
The cost of membership to a general club would not normally be paid for by the University and
will require the prior approval of the Vice Chancellor.
4.13.9 Professional Development
(a) Due to the element of personal benefit that may be associated with the University
meeting the cost of professional development, a staff member cannot approve payment
of their own professional development costs.
(b) All professional development costs must be approved by a direct manager (or a staff
member of a staff level at least equal to the direct manager) who has sufficient financial
delegated authority to cover the transaction amount.
(c) The rules of subdelegation outlined at 4.10 apply to professional development.
4.13.10 Fines
Parking infringements and towage fees would not normally be paid for by the University and
will require the prior approval of the Vice Chancellor.
4.13.11 NonMonetary Recognition of Staff (Staff Welfare)
When providing nonmonetary recognition to staff it is important to exercise discretion and
sensitivity to ensure the gift is appropriate to the situation.
4.13.12 Donations
(a) Due the potential impact on the reputation of the University, commitment to and
payment of any:
(i) donation (excluding koha) of over $400 to a thirdparty requires the approval of
the ViceChancellor;
(ii) koha greater than $400 requires the approval of the Pro ViceChancellor Māori.
(b) A written request for approval of the proposed donation must be sent to the Vice
Chancellor or Pro ViceChancellor Māori, providing the following details:
(i) name and nature of the recipient of the donation;
(ii) amount of the donation;
(iii) anticipated exposure to the University as a result of the donation.
4.13.13 Audit Fees
Commitment to, and payment of an external audit fee requires the approval of the Council.
4.13.14 Directors Fees
Commitment to, and payment of directors fees of University subsidiaries requires the approval
of Council.
4.13.15 Debt WriteOff
(a) Any writeoff of commercial debt over $50 requires the approval of the Chief Financial
Officer.
(b) Any writeoff of student debt over $50 requires the approval of the Chief Financial
Officer or the Director, Central Student Administration.
5 Legislative Compliance
Though the University is required to manage its policy documentation within a legislative
framework; there is no specific legislation directing this policy.
6 References
Financial Delegated Authorities Statute
Discretionary Expenditure on Gifts and Event Guidelines
Human Resources Delegation Framework
Conduct Policy
Treasury Statute
Fees Statute
Travel and Expenses Policy
Previous Version: archived_FinancialDelegatedAuthoritiesPolicy_20080506.pdf
7 Appendices
None
8 Approval Agency
Vice Chancellor.
9 Approval Dates
This policy was originally approved on: 20 October 2003
This version takes effect from: 7 May 2008
10 Policy Sponsor
Chief Financial Officer
11 Contact Person
The following person may be approached on a routine basis in relation to this policy:
Marianna Nicolaou
Manager – Finance Business Processes and Procurement Operations
Extension 5910