|Area Responsible for Administration:||Finance|
|Approval Authorities:||Senior Executive Committee|
|Approval Date:||November 2016|
|Review Timeline:||Every 3 Years|
To outline and regulate the signing authority of externally binding transactions and contracts.
This policy applies to all Seneca employees and includes all externally binding transactions, agreements and contracts.
- Cheque authority
- The authority to approve a cheque, wire or electronic funds transfer on behalf of Seneca.
- Commitment authority
- The authority to commit Seneca to an expenditure of funds and undertake contractual agreements.
- Consulting services
- The provision of expertise or strategic advice from external entities that is presented for consideration and decision-making purposes. This does not include professional services.
- Payment authority
- The authority to initiate payment of funds for the purchase of goods and/or services.
- Professional services
- Engagement of services related to departmental operations.
- Purchase order
- A formal offer to purchase goods and/or services for Seneca from a specific vendor and a commitment from that vendor to supply the goods and/or services that meet the specified requirements, at a defined price.
- Purchase requisition
- A request to purchase goods and/or services for Seneca from a specific vendor that meet the specified requirements, at a defined price.
- A financial instrument that represents ownership of a corporation, the right to ownership or a loan made to a corporation.
1. Policy Statement
Signing authority within Seneca is determined by an employee’s organizational position and applies to commitment authority, cheque authority and payment authority. It is essential that all binding decisions are made with the proper authority and accountability as aligned with the attributes and significance of the decision, and that the control of funds is always exercised appropriately.
2. Terms and Conditions
2.1 This policy is governed by the following terms and conditions:
2.1.1 Appropriate signing authority is required for an employee to commit Seneca to expenditures or other contractual obligations, to authorize payments and to transfer and/or assign securities.
2.1.2 Violation by an employee of their signing authority may be considered a breach of employment contract. Refer to Appendix A for the approval limits of all signing authority levels.
2.1.3 Signing authority is determined by organizational positions. If an employee changes positions within Seneca, his/her signing authority shall change to align with the new position.
2.1.4 When an employee leaves Seneca, his/her signing authority shall be cancelled by their effective departure date.
2.1.5 Seneca may rescind the signing authority of an employee at any time when deemed necessary, without disclosing cause.
2.1.6 Should a purchase requisition, contract or payment amount exceed an employee’s authorized approval limit, the request must be approved by an employee with adequate signing authority.
2.1.7 When approving the purchase of goods and/or services received, the employee with signing authority must ensure that the purchase meets the intended need and that the terms and conditions of Seneca’s Purchasing Procedure are met.
2.1.8 An employee must not authorize a transaction or contract from which they may benefit. This includes approving a payment for their own expenses and/or reimbursements.
2.1.9 A contract or transaction commitment must not be reduced to avoid exceeding the approval limits of an employee’s authority level. Examples of these reductions could include subdividing projects, procurements and contracts or awarding multiple consecutive purchases to the same vendor.
2.1.10 During a temporary absence, an employee shall delegate their signing authority to another employee. The absent employee’s direct supervisor must approve the delegation prior to its effective date. Contracts and transactions shall be forwarded to the absent employee’s direct supervisor if there is no prior delegation of signing authority.
3. Commitment Authority
3.1 Commitment signing authority may be exercised on the following transactions:
3.1.1 Purchase Requisitions (PR)
- PRs are required for all purchases of goods and/or services greater than $5,000.
- Refer to Appendix A for budgeted and unbudgeted PR approval limits for all signing authority levels.
3.1.2 Purchase Orders (PO)
- The authority to issue POs is limited to the Procurement department.
- Prior to the Procurement department issuing a PO, the related PR must receive approval by an employee with adequate signing authority.
- The Senior Buyer, Procurement shall issue POs for all purchases up to $250,000. The Senior Manager, Procurement shall issue POs for all purchases greater than $250,000.
3.1.3 Contracts and Agreements
- These contracts and agreements follow the “Purchase Requisition – Goods and Services within Budget” category approval limits (see Appendix A) for a term of three years or less. Contracts and Agreements greater than three years are considered “Other Agreements” as outlined in the following bullet point:
- Goods or services procurement contracts
- Consulting service agreements
- Service level agreements
- Master service agreements
- License agreements
- Statements of work.
- These contracts and agreements follow the “Other Agreements” category approval limits found in Appendix A:
- Grant agreements
- Memorandums of understanding
- Academic agreements, such as field placements or student exchange programs
- International entity agreements
- Any other contracts that obligate Seneca to financial and/or service commitments that are not related to the procurement of products and services.
3.1.4 Lease Agreements
- The authority to approve lease agreements is limited to the President and Vice President, Finance and Administration.
3.1.5 Legal ServicesRefer to Appendix A for the approval limits pertaining to legal services.
- Prior approval for legal services is required for all matters. The appropriate signing authorities for legal matters are as follows:
- Executive Director, Human Resources for all human resources matters
- Director, Finance for all procurement matters
- President or Vice President, Finance and Administration for all other matters.
3.1.6 Sale and Transfer of Securities
- Gifts of Securities
- Transfers and sales of donated shares, stocks, bonds, etc. for the purpose of realizing donations require approval by the President; Vice President, Finance and Administration or Director, Finance.
- Directives to buy or sell securities for Seneca’s investment accounts shall be managed by the Investment Manager of endowment and operating funds. The Investment Manager shall follow directives as outlined in Seneca’s Investment Policy.
4. Cheque Authority
4.1 Cheque signing authority may be exercised on the following:
- All cheques must be signed by two (2) Board of Governors (BoG) approved individuals. Based on their organizational position, these individuals are separated onto the following two lists:
A List: Chair, BoG; Vice Chair, BoG; President and Vice President, Finance and Administration
B List: Vice President, External; Vice President, Academic and Director, Finance
Cheques greater than $250,000 require that at least one (1) signatory is from the A List.
- Manual cheques require two (2) signatures, with at least one (1) signatory from the A List.
- System generated cheques must hold the signatures of the current Chair, BoG and President.
4.1.2 Wire and Electronic Funds Transfers (EFT)
- Payroll, statutory deductions and other similar payments shall be paid by EFT. The department managing the activities shall be the initiator of the EFT.
- All wire and EFTs require two signatures.
- The Accounts Payable department shall manage all wire and EFTs.
5. Payment Authority
5.1The signing authority levels for payment of goods and/or services received are equivalent to those stated in Appendix A. Should an amount exceed an employee’s signing authority, the request must be approved by an employee with adequate signing authority.
5.2 The Accounts Payable department shall process invoices with approved POs for payment. POs must be generated prior to the delivery of the related goods and/or services.
5.3 Payroll, statutory deductions and other similar payments shall be paid by EFT. The department managing the activities shall be the initiator of the EFT.
5.4 Prior to preparing an invoice or other payable for payment, the Accounts Payable department must conduct controls that ensure:
- The legitimacy of the receiver of the payment, including their business and tax status
- Information found on the invoice corresponds to the related PO
- An approved receipt of goods and/or services is attached to the related PO
- The invoice is paid based on due date, Seneca’s standard terms or as negotiated with the vendor
- A pre-payment register (cheque, wire or EFT) is prepared for and approved by the Manager, Accounts Payable prior to printing the cheque or preparing the wire or EFT file
- Approval by the Senior Accounting Manager or Director, Finance for payments greater than $100,000 is received prior to releasing the payment
- Details of payroll, statutory deductions and other similar payments that are paid by EFT are available to the signing authorities prior to payment.
Related Seneca Policies
Appendix A: Commitment Authority
|Purchase Requisitions – Goods and Services With Budget||Purchase Requisitions – Goods and Services Without Budget||Contracts and Other Agreements||Legal Services||Lease Agreements||Sale and Transfer of Securities|
|• Vice President, Finance and Administration||$1,000,000||$500,000||$1,000,000||$200,000||$500,000||Authorized|
|• Vice President, External
• Vice President, Academic
|• Executive Directors
• Associate Vice Presidents
|$200,000||Unauthorized||$200,000||Executive Director, Human Resources - $100,000||Unauthorized||Unauthorized|
• Director, Finance
|$100,000||Unauthorized||Unauthorized||Director, Finance - $100,000||Unauthorized||Director, Finance – Authorized|
|• Directors (reporting to the above listed authority levels)||$50,000||Unauthorized||Unauthorized||Unauthorized||Unauthorized||Unauthorized|
• Associate Directors