Policy. Purpose. Procedure SIGNING AUTHORITY

Transcription

1 POLICY NAME: SIGNING AUTHORITY APPROVING BODY: Board of Directors NUMBER: GOV VERSION: 5.0 EFFECTIVE DATE: September 2005 MANUAL: Governance LAST REVIEW DATE: May 28, 2015 SECTION: Financial Viability REVISION DATE: June 11, 2015 PAGES: 1 of 7 NEXT REVIEW DATE: May 2018 COMMITTEE OVERSIGHT: Resources Table of Contents Policy 1 Purpose 1 Procedure 1 Day-To-Day Operations 2 Information Technology Purchases 2 Unbudgeted Expenditures 2 Capital Equipment 2 Approval of Capital Equipment Requisitions2 Contracts 2 Storage of Contracts 3 Construction / Renovation Projects 3 Pharmaceuticals 3 Food 3 Leases 3 Memoranda of Understanding 4 Time Sheet Approval 4 Labour Dispute Settlements 4 Bank Signing Authorities 4 Credit / Financing 4 Documentation of Authorized Signatures 4 Policy The Chief Executive Officer shall ensure appropriate controls are in place to protect the Hospital from unauthorized purchase(s) or commitment(s) which are not in keeping with an overall financial plan. Purpose To define the levels of signing and approval authority required for all situations that result in a commitment being made on behalf of the hospital. This includes both monetary and non-monetary commitments. To set out guidelines to ensure that all aspects of the procurement process are centrally managed through Purchasing and the Materials Management Department. Procedure The overall framework for the authorization of expenditures is the annual Operating Plan and Capital Equipment Budgets approved by the Board of Directors. Once the Operating Plan and Capital Equipment File Location: O:\ADMIN Mgmt\Board\Policy & Procedure\Manual\4.0 - Financial Viability\Signing Authority GOV v5.0.doc

2 Budgets have been approved by the Board of Directors, expenditures and commitments may be approved by the appropriate level of authority as per Schedule A for expenditures that remain within the limits of the overall Operating Plan and Capital Equipment Budgets. When authorization limits are exceeded, approval must be obtained from the next highest level of management within the line of authority. Unbudgeted Expenditures Where the operating or other expenditures, including capital equipment purchases, are not within the approved budget of the department, signing authority shall be in accordance with Schedule A. Unbudgeted expenditures over $100,000 shall be presented to the Board of Directors for approval. In the case of an Acting CEO, the CEO signing authority related to unbudgeted expenditures shall not be delegated, any unbudgeted expense over $50,000 would require Board approval. Day-To-Day Operations Expenditures for the day-to-day operations of the hospital may be authorized as per attached Schedule A Information Technology Purchases Consultation and input from the Director of Information Technology or designate is required prior to all information technology and telecommunication purchases. Information technology purchases include, but are not limited to, hardware, software, maintenance and consulting related to information technology regardless of whether they are specifically within the IT department or not. Capital Equipment Capital equipment is defined as equipment that has a cost of more than $2,000 and has a life expectancy of greater than one year. Capital equipment expenditures do not include repairs to equipment. Purchases of $25,000 or more must have a Request for Quotation (RFQ) or Request for Proposal (RFP) issued, utilizing the services of the Materials Management Department. As well, at the discretion of the Director of Materials Management a RFQ/RFP can be issued for equipment less than $25,000. A Capital Equipment Needs List is developed annually as per the Capital Equipment Acquisition Manual. Equipment on the approved Capital Equipment Needs List must be purchased or be in progress by March 31 st of the budgeted year. Specific approval is required if equipment is to be carried forward into the next fiscal year. Approval of Capital Equipment Requisitions Departmental Managers may authorize a Capital Equipment Requisition if the equipment is listed on the approved Capital Equipment List and the total expenditure, including taxes, does not exceed the budget amount. The signature of the Director Materials Management is also required. Service related to capital equipment is generally separate from the purchase of the equipment and signing authority for such service related contracts falls within the Contracts section. Contracts A contract is a written agreement between two parties that will result in a legal obligation. Policy Number: GOV Version: 5.0 Page 2 of 7

3 All contracts, with the exception of employment, physician, construction, and Ministry of Health and Long-Term Care contracts and other funding agencies, must be reviewed, and approved with respect to language, by the Director Materials Management prior to signing. Departmental Managers remain responsible for economic terms and operational contents of contracts. Once these reviews have been completed all contracts may be authorized as per attached Schedule A. Contracts include pricing agreements and commitments to exclusively use a supplier s services. Contracts with a value of greater than $25,000 will have a Request for Quotation (RFQ) or Request for Proposal (RFP) issued, utilizing the services of the Materials Management Department. Exceptions to this may include vendor specific service contracts on specialized equipment. Contract values are calculated based on the total value of the contract over the full term of the contract including any option years. No contract, or extension of existing contracts, shall exceed a period of five (5) years. Automatic renewals (evergreen clauses) are not acceptable. Exception to this would be considered in the case of long term capital, real estate and land leases. Signing authorities for contracts are as per Schedule A. In addition, the Director Materials Management will be required to initial each contract for purchases of goods and services. If the contract has cross-departmental impact, all affected programs/departments must be consulted. Storage of Contracts All contracts shall be stored and retained as per the Record Retention and Destruction Policy #ADM-V- 034 Construction / Renovation Projects Renovations less than $3,000 are considered operational renovations and must follow the signing authorities outlined in the Construction/Renovation section in Schedule A. Capital renovations must meet the following criteria: must increase the original useful life of the building; must reduce original operating costs; or must substantially change the nature of the building. If these criteria are not met, renovation projects greater than $3,000 could still be deemed to be operating renovations. This would be at the discretion of the CFO. Pharmaceuticals Food All pharmaceutical purchases are authorized by the Director of Pharmacy and other signing authorities as per Schedule A. All food purchases are authorized by the Manager of Support Services and other signing authorities as per Schedule A. For outside catering and functions outside the hospital, refer to the contracts section of this policy. Leases Any lease (operating or capital) entered into in the normal course of business must be properly approved based on the total gross (principal and interest) cost of the lease as per Schedule A. All leases must be co-signed by the CFO to ensure leasing is the best financing option for the hospital and to ensure it meets the banking covenants. Policy Number: GOV Version: 5.0 Page 3 of 7

4 Leasing agreements can cover operational equipment as well as real estate and land. Memoranda of Understanding A Memorandum of Understanding (MOU) is a written agreement between the hospital and a supplier, person, or corporation that involves a commitment to enter into a business transaction that may or may not have a monetary value. Examples may include but are not limited to: corporate agreements e.g. for professional or other services where no money is exchanged with the hospital or an agreement that allows a business or individual to use the hospital facilities; Some educational agreements may also qualify, e.g. affiliation agreements with schools for training their students with the hospital; Joint hospital projects; Participation agreements. Nonetheless, there are issues of responsibility and/or liability either specified or implied in the understanding. MOU s must be reviewed and approved with respect to language prior to both verbal agreement and signing of the agreement. Memoranda of Understanding (MOU) are authorized by the Departmental Manager and Senior Leader responsible for the agreement. Legal counsel may review MOU as required. The signing of the MOU should be in accordance with Schedule A. Labour Dispute Settlements All Labour dispute settlements are case dependant and settlement estimates will be pre determined on a case by case basis. The Senior Leader for Human Resources has authority to negotiate and approve settlements up to $10,000, with further approval by the CEO thereafter. Time Sheet Approval Departmental Managers normally approve departmental time sheets. It is acceptable to designate an alternate in the event of extended absenteeism but in no cases should individuals be approving their own time sheets. Bank Signing Authorities As per the Signing Authority, Bank Cheques Policy #GOV All bank accounts holding hospital funds must be opened in the name of Muskoka Algonquin Healthcare. Documentation for all new and existing accounts requires signatures of two of the designated signing officers of the Corporation. Credit / Financing Board of Directors approval is required for the following types of transactions: credit arrangement and agreements (lines of credit and other borrowings); bond issues; selling, mortgaging or pledging real property and other similar credit or financing arrangements. Documentation of Authorized Signatures A list of authorized personnel and sample signatures will be maintained by the Finance Department. Policy Number: GOV Version: 5.0 Page 4 of 7

5 CROSS REFERENCES Capital Equipment Acquisition Manual Signing Authority, Bank Cheques Policy #GOV Record Retention and Destruction Policy #ADM-V-034 Travel Reimbursement Policy #ADM-II-027 Succession Policy, Chief Executive Officer #GOV-2-50 Policy Number: GOV Version: 5.0 Page 5 of 7

6 Schedule A Schedule of Signing Authority Limits *All signing authorities outlined below are based on expenditures that remain within the limits of the approved budget (operating and capital). Dept Clerk Manager Senior Leader CFO CEO Board of Directors Additional Review / Approval Required Documents UNBUDGETED EXPENSE Any expense not within the approved budget of the department. Budgeted Day To Day Operations Requisition from Stock Up to $250 Up to $10,000 Up to $1,000 $1,000 to $5,000 $5,000 to $50,000 $50,000 - $100,000 Over $100,000 This authority shall not be delegated to an Acting CEO Non Stock Requisition / PO Stock Requisition / SAP List $10,000 to $25,000 Over $25,000 Non Stock Requisition Up to $250 Up to $ 10,000 $ 10,000 to Over $50,000 Non Stock Requisition / PO $50,000 Employee expense claims Up to $1,000 $1,000 to $5,000 Over $5,000 Expense report / receipts IT Purchases All IT / Telecommunication Purchases Up to $25,000 $25,000 to $50,000 Over $50,000 CFO Non Stock Requisition / PO Capital Equipment All pre-approved capital equipment All within approved budget All not included in approved budget Construction / Renovation Projects Renovations Up to $3,000 $3,000 to $100,000 $100,000 - $500,000 $500,000 to $1 Million Contracts All contracts such as equipment service, purchased service, consultant, ect. Up to a max of $20,000 per year, but not to exceed total contract value of $100,000 $100,000 to $500,000 $500,000 to $1 Million Director Materials Management CFO Over $1 Million Facilities Manager Senior Team Over $1 Million Director Materials Management Legal - as required Memoranda of Understanding Departmental operational agreements All Director Materials Management Legal - as required Joint Hospital projects All Director Materials Management Legal - as required Educational and affiliation agreements All Director Materials Management Legal - as required Pharmaceuticals All pharmaceutical purchases see budgeted day to day All - Manager Pharmacy PO expenses. All Capital Requisition & PO Over $25,000 requires RFQ / RFP All Contracts: PO, RFQ, RFP documentation as required MOU Agreement MOU Agreement MOU Agreement Food All food purchases see budgeted day to day expenses All - Manager Food & Nutrition PO Catering Contracts see Contract section above Contract / PO Leases All Capital or Operating Leases All Director Materials Management Lease / PO Legal - as required Employee Time Sheets Employee payroll time sheets Bank Signing Authorities Two designated signatures are required. Credit / Financing All credit arrangements All or as designated by Manager CEO or CFO & Board Chair or Vice-Chair or Treasurer CEO or CFO & Board Chair or Vice-Chair or Treasurer Labour Dispute Settlements Settlement negotiations on case by case basis Up to $10,000 Over $10,000 Human Resources Senior Leader Legal - as required Time cards / schedule Policy Number: GOV-IV-029 Version: 4.0 Page 6 of 6