500.01 Applies to: All Departments and Units of the University This policy provides a summary of the key fiscal responsibilities required by the University. Each employee is responsible for financial controls relevant to his/her role at the University. This document outlines basic guiding principles and required departmental controls, including
responsibilities at different organizational levels. The Office of Internal Controls coordinates the annual Unit Certification of Financial Results and Internal Controls. Given the decentralized nature of administrative operations, the certification process, which is aimed toward Deans, Vice Presidents, and Directors, is designed to help develop a broader understanding and accountability of unit financial results and internal controls. The Office of Internal Controls reports summarized certification results
to the Regent’s Finance, Audit, and Investment (FAI) Committee on an annual basis. Four main elements should exist in all University units that manage their own finances. The University requires these elements for all units (and at all levels) that control their own finances. If a unit has a unique DeptID, this policy is applicable. Major operating units, sponsoring agencies, donors, and other
internal or external agencies may impose additional requirements. The minimum requirements are: These elements are similar to the guiding principles described earlier. The difference is that these essential Department-level requirements provide additional
guidance to assist units in implementing the guiding principles within their unit. The complexity of organizational structures and the various funding sources within the University may require additional layers or levels of review beyond what is described here but the four main elements (detailed below) represent the minimum requirements. Operating budgets are typically adopted and approved on an annual basis and are administered from an annual budget perspective. The budget plan should include all operating funds available to the unit. Since budgets include numerous details, responsibility for the budget
details are typically delegated to faculty and staff who have operational decision-making authority. Preparation of a budget requires involvement by unit heads and their financial management staff (e.g. department administrator who typically report directly to the unit head). Processing and Approving Financial Transactions
Financial ReviewIndividuals with delegated budgetary responsibility should regularly review budget versus actual activity and be aware that any budget variances need to be adequately explained. Financial reviews should include the identification of budget variances, fund balances, and the review of financial activity to ensure all financial activity is appropriate and correct. This process begins with reconciling the financial statements of activity (SOA) and includes verifying that required approvals were obtained and confirming adequate documentation exists to support each financial transaction. This task is performed on an exception basis by the Shared Service Center for in-scope units for certain types of transactions. The financial review process also includes review of standard management reports that focus on activity levels and unusual trends. Management reports should be reviewed with unit leadership on a regular basis. See Appendix for more details regarding departmental responsibilities for financial review. Although individual units may use supplemental systems to monitor selected unit trends and activities, financial review is necessary to validate that the University’s centrally maintained financial data is complete and accurate. The integrity of the financial data maintained in the University’s central enterprise-wide M-Pathways system, including the accuracy of revenue and expenditure functional classification, is critical for University-wide reporting, including consolidated financial reporting and state and federal regulatory filings. Departments should not duplicate data in M-Pathways, (which is the system of record) and centrally provided management reports (which are a representation of the system of record). It is critical to fully reconcile any supplemental system financial data maintained by departments to the financial data in the central M-Pathways system. Internal Controls and Management Responsibilities
Financial Oversight Responsibilities by LevelFiscal responsibilities are distributed throughout the University, which has a large and highly decentralized environment. The organization structure, in particular the administrative structure, establishes many of the roles and responsibilities for financial management. Financial controls are strengthened when separation of duties exists. Financial controls are weakened when one person handles a financial transaction from start to finish. The adequate separation of duties requirement is essential in order to maintain an appropriate system of checks and balances. The administrative capacity of a unit to manage its financial activities (e.g., budgeting, transaction processing, financial review, and internal controls) needs to be assessed primarily by the major operating division of which they are a part. For example, as fiscal responsibilities emerge in Principal Investigators’ (PI) roles, a PI’s department should determine how the financial aspects of the work associated with his/her projects will be done (e.g., which duties are the responsibility of project staff vs. departmental staff). Departments must ensure that adequate separation of duties exists. The PI is responsible for sufficiently reviewing the work of others, including oversight of financial matters, in order to provide a reasonable level of assurance that the work is being performed properly and on a timely basis. Levels for financial management responsibilities are codified within the University’s administrative (M- Pathways) systems. A coding scheme is utilized that defines the administrative structure for purposes of management oversight and control. Existing code names, with some examples of organizations within each level in brackets, are shown below:
Review of management reports to identify outliers and trends is an important part of the internal control process. Many management reports are available through the data warehouse and M-Reports for unit management to use in monitoring financial trends. These reports are important to not only identify and correct specific transactions, but also to address the root cause. A list of reports that should be reviewed, at a minimum, for each business process for various levels of financial oversight can be found here: https://spg.umich.edu/sites/default/files/policies/Key%20Reports%20for%20Financial%20Business%20Processes.pdf Role of Individual Faculty and Staff with Financial ResponsibilitiesAs indicated in Section IV, fiscal responsibilities are distributed throughout the University, which is large and decentralized. The organization structure, in particular the administrative structure, establishes many of the roles and responsibilities for financial management. While an individual’s responsibilities are partially determined based on the level in the organization in which he/she works, certain roles exist at all levels. These roles include:
Date Issued March 30, 2004 Last Updated October 15, 2020 Next Review Date October 15, 2025 Applies To All Departments and Units of the University Owner Office of the Executive Vice President and Chief Financial Officer What are the biggest units of the executive branch covering broad areas of government responsibility?An organization's informal, unwritten rules that guide individual behavior. The biggest units of the executive branch, covering a broad area of government responsibility. The heads of the departments, or secretaries, form the president's cabinet.
What is the federal bureaucracy?Description. The federal bureaucracy, encompassing millions of employees and hundreds of agencies, departments, and commissions, is the umbrella term used to describe government officials, housed within the executive branch, who are tasked with policy implementation, administration, and regulation.
What branch of government is bureaucracy?The Executive Branch: Bureaucracy in a Democracy.
Is the CIA part of the federal bureaucracy?The national security bureaucracy includes the Federal Bureau of Investigation (FBI), the Central Intelligence Agency (CIA), the National Security Agency (NSA), and the Defense Intelligence Agency (DIA).
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