Clear signature and financial approval authority policies are a key component of the university’s internal controls framework, with the goal of ensuring:
- Management of university financial, legal and compliance-related risks.
- Compliance with applicable laws, regulations and university policies.
- Appropriate execution of transactions.
This page and the video below describe the difference between financial approval authority and signature authority.
Signature authority is a formal delegation that allows an individual to sign or otherwise enter into an agreement that legally binds the university to terms and conditions. This includes written or oral contracts that bind or obligate the university to a financial or a non-financial commitment. Agreements signed by unauthorized employees or agents are not valid and do not bind the university.
Common agreements requiring signature authority include:
Signature authority for certain types of agreements is reserved for specific university business units because of the expertise required. Examples include:
- Acceptance of gifts on behalf of the university
- Construction or remodeling
- Establishment of bank and/or other financial accounts
Cognizant business units may sub-delegate these responsibilities, with limited scope, to other business units. For example, gift acceptance within a certain dollar limit has been sub-delegated to specific Schools and departments.
Ordinary and Necessary Business Expenses
Some types of transactions are considered "ordinary and necessary." The phrase “ordinary and necessary expenses” is a tax term relating to what is allowable as a tax deductible business expense. This includes expenses that are required for the day-to-day operations of the university (e.g., wages, employee benefits, utilities, communication and data charges, insurance premiums, food services, taxes, regulatory feeds). These ordinary and necessary expenses, once recognized as such, do not require ongoing transaction-level approval by the Board of Trustees. However, significant conceptual and/or budgetary changes to the nature of the expense must be raised to the cognizant officer, or to the Board of Trustees, for approval. For a listing of approved ordinary and necessary expenses, refer to Ordinary and Necessary Expense Library.
Administrative Guide 1.9.1: Signature and Financial Approval Authority contains policy details, including:
- Scope of signature and approval authority delegated to the university president.
- Delegation from university president to university officers, deans and directors.
- Sub-delegation of signature and/or financial approval authority.
- Authority reserved for specific offices within the university (e.g., purchasing, bank accounts, debt issuance, legal entities, gifts, research, constructions and employment terms).
- Special circumstances and exclusions.
Financial approval authority is a formal delegation that allows an individual to spend or approve the commitment of university funds within the scope of their management responsibility, such as a school, department or administrative unit. Financial approval authority does not include signature authority as described above. For more information, refer to Topic Overview: Financial Transaction Approval.
Authority Manager is a web application that serves as a central location for Stanford managers to grant system privileges to employees to perform administrative tasks in university systems. For those individuals who do not receive a formal financial approval authority delegation via a delegation letter, Authority Manager provides a resource to understand approval and spend limits.
The dollar limit to delegated authority, to the extent that it relates to financial approval authority, is documented in the university's Authority Manager system. Refer to Authority Manager How Tos for more information.
In the example below, the Limits and Conditions section displays the dollar limit for an individual’s Financial Approval Authority to approve expenditures for a specified scope of PTAs
Individual officers' specific scope of responsibility and limits of specific reserved delegations are documented in the form of delegation letters and retained on file at the university.
For more information, refer to Signature Authority Delegation Letter Repository.
For further assistance, contact the appropriate university department / office included in the table below:
|Department / Office||Role and Responsibility|
|Procurement Services||Signature authority for agreements unless otherwise delegated by the Board of Trustees; responsible for agreements related to the purchase of goods and services.|
|Office of Sponsored Research (OSR)||Reviews and endorses sponsored projects proposals, negotiates and accepts awards, and issues sub awards on behalf of Stanford.|
|Industrial Contracts Office (ICO)||Assists with agreements related to research that will involve interactions with, or funding from, industry, or if research materials are needed from labs outside Stanford.|
|Office of International Affairs (OIA)||Drafts agreements and coordinates approvals for international partnerships related to research.|
|Office of General Counsel (OGC)||Addresses legal issues arising out of the activities of Stanford University, Stanford Health Care and Lucile Salter Packard Children's Hospital at Stanford.|
|University Privacy Office||Assists with agreements related to data collected, created, transmitted, released and stored by Stanford affiliates and entities.|