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 describes 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 examples requiring signature authority
| Agreement Type | Examples |
|---|---|
| Pre-Contract |
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| Research |
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| Software |
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Reserved authority
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
- Investments
- Purchasing
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.
Administrative Guide Memo 1.9.1: Signature and Financial Approval Authority defines the scope of signature and financial approval authority at the university, including authority vested in the university president and the delegation and sub-delegation of that authority to university officers, deans, and directors. It also identifies authorities reserved for specific offices, such as purchasing, bank accounts, debt issuance, legal entities, gifts, research, construction, and employment terms.
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.
Delegation letters document each officer’s specific scope of responsibility and any limits on reserved delegations, and are retained on file at the university. Stanford Financial Management Services maintains a central repository where delegation letters are organized by budget unit.
Access
To access the repository, individuals must first have a valid Stanford ID (SUNet ID).
Requesting updates
Updates to signature authority delegation letters should be initiated by the dean, director, or vice president’s office for the budget unit. To reduce risk and complexity, limit delegation letters, where possible, to the dean, director, or vice president of the budget unit and their next level of direct reports. To obtain delegation templates or support updating delegations for an organization, contact Kelly Wright, Executive Director of Financial Compliance and Operations.
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
Authority Manager is the system used by the university to grant and manage privileges to employees to perform tasks in university systems. When formal financial approval authority has not been delegated to an individual via a delegation letter, Authority Manager provides the capability to delegate authority and assign dollar limits.
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.
For further assistance, contact the appropriate university department / office 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. |