Financial Planning and Budgeting Policy BA 04 05 - Effective July 1, 2005

Purpose: To provide UNCP employees an understanding of managerial responsibility and accountability to implement and comply with all applicable State of North Carolina, UNC System, and UNCP policies.

Scope: Applies to all UNCP employees with supervisory and/or budgetary authority.

I. Responsibility

Section 1: Delegations of Responsibility

The Office of the Chancellor is structured along divisional lines and each division head (vice chancellors and Director of Athletics) has programmatic and administrative responsibility for the areas under his or her jurisdiction. Division heads report to the Chancellor. The Vice Chancellor for Business Affairs is responsible for development of policy for, and oversight of, the business practices and financial systems for the University. Each division head has responsibility for assuring that business practices and financial systems within his or her division are in compliance with these policies. As part of the oversight responsibility, each division head delegates responsibility and accountability for the financial management of UNCP resources to functional units (schools or departments) at UNCP. Each UNCP department is responsible for managing its own financial resources.

The Deans of each school or college are responsible for managing all of their school’s or college’s financial resources. Deans normally delegate the departmental financial management administration to a department chair. The chair or department head is responsible for developing an appropriate structure for handling the department's financial resources. This will involve delegating a variety of tasks to employees within the department.

Each Banner Financial Manager (FM) shall be responsible for developing an accountability structure that adheres to the following principles:

1. Accountability cannot be delegated.

2. A person cannot delegate greater responsibility than he or she has.

3. Tasks shall only be delegated to people who are qualified to perform them. A qualified person must:

a. be actively involved in the tasks being performed;
b. have the appropriate training, knowledge, and technical skills to perform those tasks, including knowledge of relevant regulations and policies; and
c. have the authority to carry out the tasks.

4. The Controller’s Office must keep a complete, up-to-date record of the delegations of FRS account/Banner fund responsibility as well as an audit trail of modifications to them. The manager over a FM is responsible for notifying the Controller of any changes in delegations.

Section 2: Signature Responsibility and Financial Stewardship

The University’s policy regarding delegation of signature responsibility (electronic and actual) provides a method to control who may approve financial transactions and to meet the University's financial stewardship responsibilities. UNCP employees who have been delegated signature authority should understand the University’s financial stewardship philosophy, applicable policies, regulations, rules and laws.

Financial stewardship is defined as the responsibility for managing University resources wisely and executing these responsibilities with integrity and ethical conduct. These resources include time, money, personnel, and property. When UNCP employees manage public resources in an efficient, economical, and ethical manner, the result will be better achievement of the University’s overall missions of teaching, research, and public service.

Stewardship responsibilities encompass total oversight of the resources assigned to each employee as well as those resources available for use. Financial stewardship responsibilities include:

1. Spending money and monitoring expenditures in a fiscally responsible manner.

2. Purchasing goods and services in compliance with State and University regulations.

3. Helping others in their financial stewardship efforts.

4. Being accountable for your actions, equipment, funding, and time.

5. Encouraging others to be good stewards of their resources.

II. Financial Management

Section 1: Budgeting Financial Resources

Each operating department at UNCP requires financial resources to perform its role in the University's mission of research, teaching, and public service. Each FM is responsible for ensuring that the department manages financial resources in an efficient and cost-effective manner.

Each FM shall adopt the following practices to ensure sound financial management:

1. All budget change requests must be reviewed and approved by UNCP Financial Planning and Budget Office. The budget provides a tool to project resources necessary to achieve a department's goals and objectives.

2. Any variances from anticipated receipts and/or planned expenditures in currently authorized budgets also need to be reviewed on a regular basis, no less than monthly, and requests for budget reallocations prepared and submitted as found necessary.

3. FMs must operate within their approved budget. When expenditure requirements exceed budget, justification for such excess must be provided to the appropriate dean, department head, or vice chancellor and budget approved prior to expenditures.

4. Any significant modifications in the budget for anticipated revenues or planned expenditures should be linked to specific goals, objectives, and strategies in approved planning documents or in approved policy changes.

5. Any questions or issues concerning budgetary or financial transactions as reflected on the official accounting and budgetary system of the University such as:

a. unexpected budget transaction, expense, requisition or purchase order,
b. missing budget transaction, expense, requisition or purchase order
c. unresolved outstanding obligation, whether requisition or purchase order,
should be brought, as quickly as possible, to the attention of the appropriate office or offices within Business Affairs so that corrective action can be taken if necessary.

Section 2: Preparing and Reviewing Budgetary and Financial Transactions

Transactions require authorization of management. No FM should have complete control over all processing functions for any financial transaction; therefore, functional responsibilities should be separated. The separation of duties means that a mistake, careless or deliberate, is unlikely to be made without being discovered by another person. Prescribed policies should be followed in managing the people who carry out the responsibilities in each area.

A minimum of two people will be required to process each financial transaction. The first person (Preparer - usually a department support person) enters information about the transaction, and the second person (Approver - usually the FM) reviews each financial transaction to ensure that the Preparer has properly fulfilled his or her function. Both a Preparer and Approver must be involved in each budgetary or financial transaction.

Procedures for review should include the following:

a. Preparer and Approver are designated at the account/fund level by the appropriate Dean, Director, Department, Chair, Department Head or FM.
b. FM should also periodically review FRS/Banner for accurate and timely data entry of budget transfers.

1. A Preparer must:

a. understand the UNCP systems and know the justification of each transaction;
b. enter accurate data into all fields on a transaction document or application system screen;
c. record an accurate and thorough explanation of each transaction;
d. ensure that the proper financial accounting numbers are entered;
e. be aware of and understand all relevant UNCP policies and regulatory and other requirements;
f. resolve any questions that come to mind during the completion of any transaction or that are raised via on-line edits and related messages; and
g. forward the completed transaction, with any supporting documents, to an Approver.

2. An Approver must:

a. inspect each transaction to ensure the Preparer properly fulfilled his or her responsibilities;
b. ensure that each transaction complies with policy, regulatory, and other requirements;
c. resolve any concerns of the approver that arise concerning a transaction, or ensure the transaction is reversed until the questions are resolved;
d. notify financial system security in the Controller’s Office if the Approver will be absent from work for an extended period of time, so security access may be changed; and
e. notify the financial system security in the Controller’s Office when the Approver is returning from an extended absence.

Section 3: Purchasing

Acquisitions will be conducted on an open and competitive basis without favoritism to obtain maximum value for each purchase.

1. All expenditures must comply with applicable Federal and North Carolina regulatory and legal requirements as well as University policy. Budgetary authority to make purchases from departmental budgets is granted via the FRS/Banner on-line requisition process or the appropriate signature on manual requisition forms.

2. If a commodity is available from either UNCP Central Stores or a NC State Contract, the item must be purchased from that source unless specifically approved in advance by Business Services for purchase elsewhere.

3. When the dollar amount of an expenditure is under an agency’s expenditure benchmark, the FM are authorized by delegation to acquire commodities and contractual services. The following UNCP benchmarks must be followed:

a. $0.00 to $2,499.99 – no documentation of competition required
b. $2,500.00 to $4,999.99 – departmental authority for quotes, documentation must be available for review in department records
c. $5,000.00 to $149,999.99 – quotes obtained by UNCP Purchasing on NC Interactive System
d. $150,000.00 and up – formal bids obtained by NC Purchase and Contracts

4. FM’s shall not divide requirements in order to keep them under the $5,000.00 benchmark amount and thereby avoid the required competitive bid requirement. In the case of similar and related items, the dollar limits apply to the total cost (shipping included, taxes excluded) rather than the cost of any single item.

5. Orders received that have not followed the prescribed purchasing procedure will not be approved for payment. Any person who makes unauthorized purchases shall be personally responsible for payment of all charges incurred.

6. If questions arise, contact your departmental purchasing agent.

Section 4: Departmental Computing Responsibilities and Acquiring Computing Equipment and Information Systems

If a department is developing or acquiring computer hardware and software, all Federal, State, and University requirements must be followed. These may include, but are not limited to, requirements of Information Technology Services (ITS), Office of the State Controller (OSC), Office of the State Auditor (OSA) and standards defined by UNC Office of the President and University Computing and Information Services (UCIS). Contact UCIS for assistance. The FM shall also contact the Assistant Vice Chancellor for Facility Management when expanding current utility, space, and environmental requirements. Departments planning significant purchases, development, or modification of existing systems must ensure these meet University standards for disaster recovery and business continuity.

III. Human Resources Management

Section 1. Human Resources Processes

The FM has ultimate responsibility for compliance with all Federal, State and UNCP Human Resources policies with respect to all position and employee actions under his/her department and/or divisional supervision. This responsibility cannot be delegated and includes:

1. Establish Positions

a. Evaluate the organizational need to establish a position.
b. Identify appropriate reporting relationship in the department and update organizational chart.
c. Accurately define the purpose of the position on the appropriate position description form: http://www.uncp.edu/hr/forms/PD-OSS93.doc or http://www.uncp.edu/hr/forms/PD-102R.doc.
d. Submit organizational chart, position description and “Establish a Position” form http://www.uncp.edu/hr/forms/estabpos.doc or establish grant position form http://www.uncp.edu/ba/policies/hr/hr1397.htm with required approvals to Human Resources.
e. Ensure organizational charts and position descriptions are updated accurately and timely to reflect the duties performed in the position, as changes occur in the department/division. Annual updates of organizational charts are due in Human Resources on June 30 of each year.

2. Recruitment & Selection

a. Complete a “Request to Post a Position” form http://www.uncp.edu/ba/policies/hr/hr0301.htm and submit to Human Resources as notified by Human Resources of position established or upon notice of resignation by an employee.
b. Comply with the guidelines outlined in the “Employment Procedures for EPA Non-Teaching” policy: http://www.uncp.edu/ba/policies/hr/hr1899.htm, Equal Employment Opportunity Plan and the Merit-Based Recruitment and Selection Plan http://www.uncp.edu/ba/policies/hr/hr1798.htm.
c. Provide selection letter to Human Resources that describes recruitment efforts and includes demographic data on applicants interviewed in person, justification for and identification of selected candidate, preferred date of hire, salary, position number, and employment type/status.
d. Retain department recruitment files by position number which include position posting, structured interview questionnaire, applicant selection/non-selection reason for all applicants in the most qualified pool, reference checks, job sampling documentation, and copies of non-selection notification letters on all applicants interviewed.
e. Assure all new employees report to Human Resources to complete an I-9 and tax forms, http://www.uncp.edu/hr/forms/index.htm, prior to beginning work, to be placed on payroll.
f. Assure all new employees attend New Employee Orientation.

3. Classification and Salary Administration

Consult with Human Resources to determine the best approach to recognize permanent significant job change, resolve bona fide inequitable salary relationships, and/or respond to unique labor market conditions as referenced in the “Reclassification of an SPA Position” policy http://www.uncp.edu/ba/policies/hr/hr1096.htm and the “In-Range Salary Adjustment” policy http://www.uncp.edu/ba/policies/hr/hr1698.htm.

4. Equal Employment Opportunity and Unlawful Workplace Harassment

a. Provide a work environment and management practices that supports Equal Employment Opportunity in accordance with Federal and State guidelines: http://www.eeoc.gov/, http://www.eeoc.gov/abouteeo/overview_laws.html, and http://www.osp.state.nc.us/manuals/dropmenu.html
b. Provide a work environment free of unlawful workplace harassment as referenced in the “Unlawful Workplace Harassment Prevention Plan” http://www.uncp.edu/ba/policies/hr/hr2099.htm.
c. Submit accurate and timely data that directly impacts an employee’s terms, conditions and privileges of employment (salary, position, employment type and status, tuition waiver, training registration, performance, leave, position budget/fund changes, benefits, or termination) to Human Resources. Related HR policies are available at: http://www.uncp.edu/ba/policies/hr/, State policies http://www.osp.state.nc.us/manuals/dropmenu.html, and UNCP HR forms: http://www.uncp.edu/hr/forms/index.htm
d. Prevent and correct any identifiable discrimination and/or unlawful workplace harassment, and counsel employees as required to prevent and correct unlawful workplace harassment.
e. Consult with and report personnel concerns to Human Resources.

5. Grievance

Respond immediately to employee grievances and advise employees whose questions or complaints are not settled through informal means of the University Grievance and Appeal Procedure. Promptly notify Human Resources Director or designee as required in the “Grievance Procedures for SPA Employees” policy available at: http://www.uncp.edu/ba/policies/hr/hr1995.htm

6. Performance Management

a. Provide employees with a work plan that clearly defines assigned responsibilities and performance expectations.
b. Assess employee’s development level in relation to assigned responsibilities when establishing and documenting work plans and continue to assess progress throughout the annual performance review cycle.
c. Evaluate employee performance and ensure employee appraisals are current as referenced in the Performance Management Program Policy and Procedures at: http://www.osp.state.nc.us/manuals/man10-11.html
d. Recommend corrective action and develop an improvement plan when necessary.

7. Leave

a. Exercise adequate supervision to ascertain and ensure employees are complying with established work schedules, time and leave reporting.
b. Require advance supervisory approval of employees working outside of the usual work schedule, overtime or compensatory time off as defined in the “Wage and Hour Policies and Procedures” policy: http://www.uncp.edu/ba/policies/hr/hr0594.htm, or “Compensation Beyond Contract for EPA Faculty and Non-Faculty Employees” http://www.uncp.edu/ba/policies/hr/hr1196.htm and/or allocating charges to Federal awards. Leave reporting policies include annual, adverse weather, bonus, family illness, family medical, sick, and voluntary shared leave: http://www.uncp.edu/ba/policies/hr/.
c. Ensure grant-funded employee time and effort are appropriately tracked and notification of any changes are promptly reported and coordinated through the Controller’s and Human Resources Offices.

8. Workers Compensation

a. Immediately respond to a report of employee injury.
b. Complete a thorough investigation of the events surrounding the injury to assess the nature and extent of the injury and initiate appropriate action.
c. Complete required forms within three days of first report of injury as required by North Carolina Workers’ Compensation Law and referenced in the “Workers’ Compensation and Employee On-The-Job Injuries” policy: http://www.uncp.edu/ba/policies/hr/hr1297.htm

9. Exit Interviews

a. Notify Human Resources as soon as advised of an employee resignation as referenced in the “Exit Interview Policy” http://www.uncp.edu/ba/policies/hr/hr0394.htm.
b. Provide employee with the “Checklist for Non-Returning Employees” to ensure all University obligations are satisfied prior to employee departure.

10. Temporary Agency Services

a. Evaluate the need for temporary staffing and determine appropriate staffing method.
b. Submit complete, accurate and timely data to Human Resources that directly impacts temporary agency services and temporary agency requisitions: http://www.uncp.edu/hr/forms/index.htm.
c. Approve on a weekly basis the temporary agency employee timesheets.
d. Report to Human Resources any concerns with temporary agency employees and provide notification of the end of temporary assignments.

11. Personal Service and Certified Services Rendered Temporary Contracts

a. Submit complete, accurate, and timely data to Human Resources on temporary employees who will provide services to the University based on a Certified Services Rendered or Personal Services Contract as referenced in the “Contractual Hiring” policy: http://www.uncp.edu/ba/policies/hr/hr0603.htm. Contracts require approval prior to the start of the temporary work to be performed.
b. Assist the Controller’s Office and Human Resources in determining whether individuals are to be considered temporary employees or independent contractors for tax purposes.
c. Verify identification documents and complete employer section of the I-9 form prior to the temporary contract employee’s first day of employment. Incomplete forms may result in substantial fines up to $1,100 per occurrence to the University. Consult with Human Resources as needed to ensure eligibility for employment.

12. Personnel Records

Adhere to General Statutes 126-22 and 126-23 respectively, http://www.osp.state.nc.us/manuals/manual99/peract.doc, which identifies Personnel File information on State employees, former State employees or applicants for State employment that is confidential and not to be disclosed or available for public examination and which identify employee information that is subject to public disclosure. Any record not specifically named as “public information” is considered confidential.

13. Conflicts of Interest

Comply with requirements of the “Conflicts of Commitment & Interest Affecting University Employment ”: http://www.uncp.edu/ba/policies/hr/hr0695.htm

Section 2: Training and Development

FM shall provide leadership and support to employees in developing their skills to maximize their potential in their current position and to provide for potential advancement to more responsible positions that are consistent with the objectives of the University.

a. Be aware of and act in full accordance with the “Training for UNCP Employees” policy and complete core training requirements for University personnel.
b. Identify the training needs for each position.
c. Ensure employees acquire the required training in a timely manner to perform the duties within their assigned areas of responsibility, which will include but not be limited to the University’s core training requirements and/or elective programs, as defined in “Training for UNCP Employees”: http://www.uncp.edu/ba/policies/hr/hr7301.htm and academic assistance through “Tuition Waiver – Employee Educational Options/Rules” at: http://www.uncp.edu/ba/policies/hr/hr0995.htm
d. Ensure timely completion of required training by employees in concert with his or her work plan and development activities.

IV. Accountability/Compliance

Every employee who conducts personnel and financial transactions that affect University funds must comply with all applicable laws, regulations, and special restrictions. To ensure compliance, each FM shall adopt the following practices:

Section 1: Financial Compliance

1. Departments will conduct transactions within University guidelines, which are in compliance with applicable financial reporting requirements, including the Generally Accepted Accounting Principles (GAAP). See http://www.osc.state.nc.us/sigdocs/sig_docs/
documentation/policies_procedures/sigGenerally_Accepted_Accounting_Pr.html and the Government Accounting Standards Board (GASB) Statements at http://www.gasb.org/.

2. FM’s over Federal funds must adhere to Office of Management and Budget Circulars (OMB) and/or Federal Acquisition Regulations (FAR). Two primary OMB circulars are:

a. OMB Circular A-21, http://www.whitehouse.gov/omb/circulars/a021/a21_2004.html, provides the cost principles for educational institutions. These principles define allowable costs as those, which are reasonable, allocable, consistently treated, and in conformance with any special limitations. Circular A-21 also defines direct vs. indirect costs, and provides guidelines for calculating F&A (indirect) costs; and
b. OMB Circular A-110, http://www.whitehouse.gov/omb/circulars/a110/a110.html, provides uniform administrative requirements for grants and other agreements with institutions of higher education, including financial reporting requirements.

Section 2: Safeguarding University Assets

University assets must be safeguarded from loss or unauthorized use. Each FM must comply with policies created to provide adequate safeguards that include the following:

1. All cash, checks, or cash equivalents collected and all change funds are processed and managed in compliance with the requirements of the University policies. Please see http://www.uncp.edu/ba/policies/co/index.htm.

2. Access to any forms or on-line systems that can be used to alter financial balances are restricted by financial system security to employees who require such access to perform their University duties.

3. Actual physical verifications of departmental assets from lists provided by Business Services must be performed at least once per year. Discrepancies must be resolved with Business Services within 30 days. Each department’s assets of designated value are required to be properly described and accounted for in the Fixed Asset System.

Section 3: Tax Laws and Regulations

1. Use Tax on certain purchase transactions is required by the North Carolina Department of Revenue. Otherwise, departments that conduct sales activities must charge sales tax and properly account for sales tax collected by coding related deposits as to sales tax collected object designated by the Controller’s Office.

2. Income-producing activities that constitute a regularly-carried-on trade or business that is not related to the furtherance of educational activities are subject to income tax. Consequently, employees who are engaged in such activities must:

a. maintain information that supports whether or not a particular activity is subject to income tax;
b. notify the Reporting Officer of any potentially income taxable activities and complete the various questionnaires and worksheets prescribed by the Controller’s Office; and
c. account for all taxable income earned in an income-producing fund established by the Controller’s Office, which is responsible for the actual completion of the Form 990-T, Exempt Organization Business Income Tax Return.

Federal and State income taxes are assessed on each University employee’s base salary and wages, supplemental pay, undocumented reimbursements, and various allowances (such as car and housing) in accordance with the Internal Revenue Code and NC Revenue and Taxation Code.

4. Payment of fees, commission, rents, and royalties, etc. must be reported as taxable income. FM’s must provide tax identification numbers and addresses when processing these types of payment transactions

Section 4: Reporting Misuse of State Property

In order to comply with the policies of the State of North Carolina, NCGS § 114-15.1, http://www.ncga.state.nc.us/EnactedLegislation/Statutes/HTML/
BySection/Chapter_114/GS_114-15.1.html, and The University of North Carolina at Pembroke, IA 03 03, http://www.uncp.edu/ba/policies/ba/ia0303.htm, employees who receive any information or evidence of possible misuse of state property are required to report such information or evidence to their immediate or appropriate supervisor, as soon as possible, but not later than three days from the receipt of the information or evidence.

Section 5: External Audits and External Audit Findings

Immediately upon learning that any external audit or review related to the University in any manner will be performed in their department the FM of the department to be audited or reviewed must provide written notification of the details to Internal Audit. If prior notice is not given, then Internal Audit must be notified as soon as the initial contact is established with the external auditors. The FM of the department audited or reviewed should contact Internal Audit as soon as they are aware of any audit findings or possible audit findings.

Section 6: Records Retention

The records of the University of North Carolina at Pembroke are public records and may be disposed of only in accordance with the provisions of General Statutes of North Carolina. As defined by G.S. 121.2 (8) and 132-1.a, public records are “all documents, papers, letters, maps, books, photographs, films, sound recordings, magnetic or other tapes, electronic data processing records, artifacts, or other documentary material, regardless of physical form or characteristics, made or received pursuant to law or ordinance or in connection with the transaction of official business by any agency” http://www.ncga.state.nc.us/EnactedLegislation/
Statutes/HTML/ByChapter/Chapter_121.html.

No person may destroy, sell, loan, or otherwise dispose of any public record without the consent of the North Carolina Department of Cultural Resources. Whoever unlawfully removes a public record from the office where it is usually kept, or alters, mutilates, or destroys it shall be guilty of a Class 3 misdemeanor and upon conviction fined at the discretion of the court. Guidelines may be viewed at http://www.ah.dcr.state.nc.us/records/ or visit the UNCP Library to view the University Records Retention and Disposition Schedule.

“Procedures to be followed in properly disposing of records are explained in the North Carolina Administrative Code, Title 7, Chapter 4, Subchapter M, Section .0510 (May 16, 1989): DEFINITION OF DESTRUCTION. When used in the approved records retention and disposition schedule, the provision that records are to be destroyed means the records are to be:

1. burned;
2. shredded or torn up so as to destroy the record content of the documents or materials concerned ;
3. placed in acid vats so as to reduce the paper to pulp and to terminate the existence of the documents or materials concerned ;
4. buried under such conditions that the record nature of the documents or materials will be terminated ; or
5. sold as waste paper, provided that the purchaser agrees in writing that the documents or materials concerned will not be resold as documents or records” http://www.ah.dcr.state.nc.us/records/guides/SRCHandbook.pdf.

Upon completing the process for disposing of authorized, confidential, or sensitive records you may contact the Assistant Vice Chancellor for Facilities for assistance in discarding your material. Non-confidential and non-sensitive records may be disposed of in trash containers.

Section 7: Consequences

If any FM violates this policy, the supervisor of the FM shall ensure that the FM is held accountable by addressing the FM’s violation firmly and in a timely manner with a disciplinary response that is appropriate depending on the severity of the violation(s). Disciplinary responses may range from confronting the FM with a verbal warning up to and including termination of the FM’s employment. A progressive disciplinary plan is suggested as means of administering due process.

If the FM is an employee Subject to the Personnel Act (SPA), the SPA disciplinary policy http://www.uncp.edu/ba/policies/hr/hr1995.htm, must be followed.

If the FM is an administrative employee exempt from the Personnel Act (EPA-Non Faculty), he or she is a Senior Officer, Tier I or II. Such employees are employees at will and serve at the discretion of the Chancellor and are not appointed to serve for a specified period of time.

If the FM is a faculty member (EPA-Faculty), any consequence invoked by any discipline against that person pursuant to this policy is applicable to administrative duties and responsibilities only and would not impact a faculty member’s tenure status if such status were held. Any discipline against the person as a faculty member for violations of this policy, up to discharge from the University, shall be administered in accordance with the appropriate provision(s) of the UNCP Faculty Handbook.

All disciplinary action(s) taken will be made part of an employee’s official personnel file.