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Accountability and Business Rules OBJECTIVES § Understanding the objectives of the UC Accounting Program and how they are achieved through accounting and business rules in DaFIS § Understanding why certain requirements exist in policies and regulations § Knowledge of the features in DaFIS that provide accountability, and guidance in using these features appropriately CONTENTS 1. Objectives of the UC Accounting Program, p. 3 2. Stewardship Responsibilities, p. 4 § § § § 3. Accountability, p. 10 § § § § § § 4. Ethical Decision-making, p. 4 Strategic Direction for UC Business Administration & Operations, p. 5 UC Davis Principles of Community, p. 6 Policy Examples – Stewardship Responsibilities, p. 7 Authority / Responsibility / Accountability, p. 10 Policy Example – Accountability, p. 10 Internal Controls, p. 11 Establishing an Accountability Structure, p. 11 Routing, p. 14 Policy Examples – Internal Controls, p. 17 Laws, Regulations and Policies, p. 20 § References, p. 20 § Generally Accepted Accounting Principles, p. 20 § Information Access, p. 21 5. Discussion Scenarios, p 23 6. Workflow Diagrams, Appendix A, p 26 Rev E D A F I S Page 2 U S E R ’ S G U I D E Rev E A C C O U N T A B I L I T Y & B U S I N E S S R U L E S OBJECTIVES OF THE UC ACCOUNTING PROGRAM DaFIS is an electronic accounting system designed to achieve the objectives of the University Accounting Program. Specific procedures in DaFIS ensure proper accountability and compliance with university policies, and state and federal laws and regulations. The following passage from the University of California Accounting Manual (University Accounting Program, Section A-000-4) describes the purpose of the accounting program: The complete Accounting manual can be viewed online at: http://www.ucop.e du/ucophome/poli cies/acctman/. “The University of California maintains and operates a comprehensive accounting program in order to meet its stewardship responsibilities and to provide management information to all levels of the university’s administration, as well as to state and federal officials. The university, as a public institution, has a special stewardship obligation to process properly and accurately all receipts and disbursements of funds; to account for all financial resources received and used; to ensure that all financial transactions conform to legal requirements and administrative policies, and are recorded in accordance with generally accepted accounting principles for colleges and universities; and to provide reports that present to university administrators and the public a complete picture of the university’s funds and their uses. In addition to these stewardship responsibilities, the university’s comprehensive accounting program must provide financial information to all levels of university administration for use in planning, budgeting, evaluating the uses of funds, making comparative studies, and other purposes.” In this class we will discuss these responsibilities, and how DaFIS can properly be used to meet them. Rev E Page 3 D A F I S U S E R ’ S G U I D E STEWARDSHIP RESPONSIBILITIES Remember the first part of the Accounting Program Objectives: “The University of California maintains and operates a comprehensive accounting program in order to meet its stewardship responsibilities. . . .” Our Public Trust “The University of California shall constitute a public trust …” California Constitution, Article 9, Education “We recognize that each of us has an obligation to the community of which we have chosen to be a part.” UC Davis Principles of Community “We succeed by earning the ... respect and trust of those who govern us, support us, and do business with us.” Mission of UC Business Administration and Operations Ethical Decision-making Making ethical decisions, collectively and individually, is at the core of ensuring that we meet our stewardship responsibilities. What are Ethics? Moral principles of duty and virtue that prescribe how we should behave. Principles provide a means of evaluating and deciding among competing options. © 2000 Josephson Institute of Ethics – Reprinted with Permission What are Values? Values are important beliefs and desires that shape attitudes and motivate actions. © 2000 Josephson Institute of Ethics – Reprinted with Permission Are Values Different from Ethics? § “Values” are inner judgments about how a person actually behaves.“Ethics is concerned about how a person should behave.Values concern ethics when they pertain to beliefs about what is right or wrong.© 2000 Josephson Institute of Ethics – Reprinted with Permission Perception is Reality § When it comes to trust, perception is reality. § It’s not enough that we do no wrong, we must also try to assure that others believe we have done no wrong. © 2000 Josephson Institute of Ethics – Reprinted with Permission Classical Fallacies About Ethics It’s not unethical if: 1. It’s for a good cause. 2. I’ve got it coming. Page 4 Rev E A C C O U N T A B I L I T Y & B U S I N E S S R U L E S 3. It’s legal. 4. Everyone does it. 5. Others are a lot worse. 6. I don’t get caught. 7. It’s not for me. 8. It benefits my family. 9. It’s necessary / It’s the only way I can win 10. I’m just following orders. 11. My job is on the line. 12. I’m just fighting fire with fire. 13. No one is really hurt © 2000 Josephson Institute of Ethics – Reprinted with Permission The Rat Race The problem with the rat race is that, even if you win you are still a rat. – Lilly Tomlin © 2000 Josephson Institute of Ethics – Reprinted with Permission Bell, Book and Candle Test § Listen for the bells warning you of an ethical issue. § Check to see if there are any laws, regulations or rules restricting your choice. § How would your decision look in the light? Could a reasonable, fair-minded person conclude you acted improperly? © 2000 Josephson Institute of Ethics – Reprinted with Permission Strategic Direction for UC Business Administration and Operations The following are defined by the Office of the President (the full text can be seen at http://www.ucop.edu/ucophome/businit/vision.html ): Vision Building the world's best university in partnership with our faculty and academic leadership Mission UC’s business administration and operations foster and support the academic mission by employing sound business practices, simple and cost effective operating processes, proven technologies, ethical business relationships, and a trained and serviceoriented workforce. We succeed by earning the satisfaction of our customers; the respect and trust of those who govern us, support us, and do business with us; and the pride of our employees. Rev E Page 5 D A F I S U S E R ’ S G U I D E Values and Principles § We strive for excellence in everything we do. § We foster the UC values of honesty, integrity, collegiality, and respect for diversity. § We work collaboratively to support the UC’s interests while respecting individual campus needs and approaches. § We provide the means to help all members of the UC community fulfill their business objectives in a responsible, ethical, and cost effective manner. § We balance the needs of our customers with the need to safeguard and grow university resources for the future. § We localize decision-making authority whenever possible and link localized authority with responsibility and accountability. UC Davis Principles of Community The campus adopted the following principles of community over a decade ago. Everything we do as an institution, and as individuals, should be done with the following in mind: The University of California, Davis, is first and foremost an institution of learning and teaching, committed to serving the needs of society. Our campus community reflects and is a part of a society comprising all races, creeds and social circumstances. The successful conduct of the university's affairs requires that every member of the university community acknowledge and practice the following basic principles: We affirm the inherent dignity in all of us, and we strive to maintain a climate of justice marked by respect for each other. We acknowledge that our society carries within it historical and deep-rooted misunderstandings and biases, and therefore we will endeavor to foster mutual understanding among the many parts of our whole. We affirm the right of freedom of expression within our community and also affirm our commitment to the highest standards of civility and decency towards all. We recognize the right of every individual to think and speak as dictated by personal belief, to express any idea, and to disagree with or counter another's point of view, limited only by university regulations governing time, place and manner. We promote open expression of our individuality and our diversity within the bounds of courtesy, sensitivity and respect. We confront and reject all manifestations of discrimination, including those based on race, ethnicity, gender, age, disability, sexual orientation, religious or political beliefs, status within or outside the university, or any of the differences among people which have been excuses for misunderstanding, dissension or hatred. We recognize and cherish the richness contributed to our lives by our diversity. We take pride in our various achievements, and we celebrate our differences. Page 6 Rev E A C C O U N T A B I L I T Y & B U S I N E S S R U L E S We recognize that each of us has an obligation to the community of which we have chosen to be a part. We will strive to build a true community of spirit and purpose based on mutual respect and caring. (The Principles of Community http://www.ucdavis.edu/principles.html ) can be found online at Policy Examples — Stewardship Responsibilities The following excerpts from the Policy & Procedure Manual (P&PM) illustrate how policy is written to ensure that we meet our stewardship responsibilities. (The P&PM is available online at http://www.mrak.ucdavis.edu/web-mans/ppm/welcome.htm ). Acceptance or Offering of Gifts and Gratuities by University Employees (380-55) As a public institution of higher education and a custodian of public funds, the university is concerned that there be appropriate safeguards against any appearance of favoritism in its relations with other entities, either public or private. To avoid any such appearance of favoritism, no officer or employee should accept any gift or gratuity from any source that is offered or reasonably appears to be offered because of the university position held by the officer or employee, nor should an officer or employee extend an offer of a gift on a similar basis. Gift Reporting Procedures (260-25) When a gift is received, it is recorded in DaFIS using the Statement of Cash Collections document. If it is equipment, a DaFIS Add Asset or Multiple Add Asset document also needs to be completed. University Relations’ Advancement Information System (AIS) asks for both DaFIS account codes and legacy Loc/Account/Fund/Sub numbers, but either can be entered. New gifts not yet assigned an OP fund number should cite 90000 as the OP fund number. Extramural Accounting will change this to the actual new OP fund and advise University Relations. Agency Account Services (330-09) This section covers the creation and use of agency accounts maintained by campus Accounting & Financial Services for funds held by the university as custodian or fiscal agent on behalf of principals (i.e., individuals, faculty/staff/student organizations, private organizations, and other sponsors). Entertainment with University-Controlled Funds (330-80) As with travel expenses, entertainment expenses require the handwritten signature of the host, attesting to the necessity and appropriateness of the expense. Therefore, Request for Issuance of Check - Entertainment Expense, Form D2853 is used, in addition to the DaFIS Entertainment Expense Voucher (EEV). This paper form, along with any additional documentation, should be routed concurrently with the DaFIS electronic document, and be available to all additional reviewers. The paper form should indicate the EEV document number. For entertainment expenses in excess of $250, department heads must also obtain the approval of their dean or vice Rev E Page 7 D A F I S U S E R ’ S G U I D E chancellor. This approval can be obtained via electronic routing. There are occasions for which judicious extension of hospitality in connection with official university business is in the best interest of the university. A. CONDITIONS FOR APPROVAL 1. Expenses for entertainment must be directly related to, or associated with, the active conduct of official university business. When a university employee acts as an official host, the occasion must, in the best judgment of the approving authority, serve a clear university business purpose, with no personal benefit derived by the official host or other university employees. In addition, the expenditure of funds for entertainment should be cost effective and in accordance with the best use of public funds. 2. When determining whether an entertainment expense is appropriate, the approving authority must evaluate the importance of the event in terms of the costs that will be incurred, the benefits to be derived from such an expense, the availability of funds, and any alternatives that would be equally effective in accomplishing the desired objectives. University Payment of Membership Fees (330-75) It is the policy of the University to consider membership in organizations that would promote the advancement of education and research, enhance the professional standing of its administrative personnel, and facilitate favorable campus-community relations. It is often in the best interest of the university to consolidate payment of multiple individual membership fees into a single institutional membership. The Chancellor retains approval authority for memberships in organizations of universities and colleges and community organizations. The approval of deans and vice chancellors is required for other memberships. Authority to approve membership requests may not be re-delegated. After initiation of the appropriate DaFIS purchasing document, ad hoc or review hierarchy routing should be used to obtain these higher-level approvals. Page 8 Rev E A C C O U N T A B I L I T Y & B U S I N E S S R U L E S 1. Costs in relation to benefits shall be considered. 2. Payments shall not be made to organizations that are primarily social (e.g., country clubs). 3. Payments shall not be made to support an organization's political action committee or to any organization whose primary activities include carrying on propaganda, or otherwise attempting to influence legislation, or participating or intervening in any political campaign on behalf of any candidate for public office. 4. Whenever possible, institutional rather than individual memberships shall be obtained, as the former often allow participation by several or alternate employees. Individual memberships shall be purchased only if particular circumstances warrant an exception; the decision to grant an exception shall be based on an evaluation of the benefits to the university. In no case may more than one institutional membership in any organization be purchased on the campus. 5. Memberships and employee participation in community organizations should be held to the number necessary to achieve effective campuscommunity relations within a reasonable expenditure of funds. 6. Departments may purchase a membership in an organization to secure its periodicals if the periodicals cannot otherwise be secured. Such periodicals will become the property of the university rather than of an individual, and must be made available to all department faculty, staff, and students. 7. University libraries may secure periodicals for their collections that cannot be obtained except through membership. Rev E Page 9 D A F I S U S E R ’ S G U I D E ACCOUNTABILITY Remember the second paragraph in the of the Accounting Program Objectives? “The University, as a public institution, has a special stewardship obligation to process properly and accurately all receipts and disbursements of funds; to account for all financial resources received and used; …” This further defines our stewardship obligation, and brings in the issue of accountability. So, just what is accountability? Authority/Responsibility/Accountability Authority is the power to direct (or delegate) that a task be done. Responsibility is the obligation to do it. Accountability is an obligation or willingness to accept responsibility or to furnish a justifying analysis or explanation for one’s actions. Merriam-Webster’s, Collegiate Dictionary, Tenth Edition True Accountability is: § How the human, financial and political resources are being used. § How well the leadership is carrying out the unit’s mission. § What risks--legal, financial, and other-- are being incurred by the unit. § The quality of decisions being made. Policy Example - Accountability: The following policy excerpt illustrates the issue of accountability: Travel Policies & Regulations (300-10) It is the policy of the university that all official travel shall be properly authorized, reported, and reimbursed in accordance with university travel regulations. Under no circumstances shall travel expenses for personal travel be charged to, or temporarily funded by, the university. When a university employee travels under the sponsorship of a non-university entity, the travel expenses shall not be charged to a university account; travel advances and tickets should be obtained from the sponsor. University employees traveling on official business shall observe normally accepted standards of propriety in the type and manner of expenses to incur. It is the responsibility of the traveler to plan university travel in such a manner as to minimize the cost to the university. The paper Travel Expense Form, along with all receipts and other documentation, should be routed concurrently with the DaFIS electronic document, and be available to all additional reviewers. The paper form should indicate the DaFIS TEV document Page 10 Rev E