Excellence in Financial Stewardship


Issue 5 | Spring-Summer 2022

A Focus on Approvers

While all individuals involved in financial transactions play an important role in stewarding university funds, financial approvers play a critical role in ensuring that the university’s funds are spent appropriately. Before approving a transaction, each approver is responsible for verifying that the transaction is properly documented, and that it is:
  1. Reasonable and necessary.
  2. Consistent with established university policies and practices applicable to the work of the university.
  3. Consistent with sponsor or donor expenditure restrictions.
This role is similar to one we all play in our everyday lives – that of the “approver” of our personal finances. For instance, before paying a credit card bill, we make sure the charges are correct and the vendors are valid. When using a mobile payment app, we take time to confirm that it’s going to the appropriate person for the intended reason, such as reimbursing a friend or paying a vendor. If another level of review is required, you might ask your partner to confirm that the amount is correct or that the correct account is being charged. You do this proactively, before transactions are processed, and understand that there could be negative personal consequences if appropriate care is not taken. This is the same level of care, or stewardship, that our university financial approvers must take when fulfilling the responsibilities associated with their role.

FMS appreciates the significance of the financial approver responsibility as well as some of the inherent challenges, including the complex compliance rules and the difficult conversations that may arise. In this issue, we highlight a few real scenarios to inspire approvers across our ecosystem and share recently refreshed and simplified tools. Thank you for all that you do to support excellence in financial stewardship at Stanford!
Anne Sweeney-Hoy
Senior Associate Vice President of Finance
Real Stories From Real Approvers
Approvers can make significant impacts in their business units.  Next, we share real situations as we recognize these staff who used their role to make improvements.
Monitoring trends and identifying potential issues
While reviewing uncleared PCard transactions, an approver observed some unusual trends spanning multiple months, including several gas charges, cell phone charges, and numerous meal charges, some even multiple times on the same day. 
The approver was unsuccessful in obtaining sufficient information from the PCard verifier, which led them to reach out directly to the faculty member about the charges. The approver reviewed the facts with the faculty member and asked from a place of curiosity (rather than accusation) if they recognized the expenses. The faculty member indicated that these were not their expenses. The approver then reached out to the Office of the Chief Risk Officer (OCRO) to investigate the situation. OCRO found that the person was intentionally using the card for personal expenses and appropriate action was taken.

Key takeaway: By performing post-transaction monitoring and oversight in alignment with PCard policy, including spotting unusual trends, verifying the information with an alternate source, and reaching out to OCRO, the approver was able to help identify instances of fraud, waste, and abuse.
Engaging in conversation and raising awareness in the organization
To enhance understanding and awareness of financial transactions, one unit anonymized several expense reports and discussed them with different audiences focusing on whether these transactions should be “approved as is,” “rejected because...” or “need more information.” 
The groups included various constituents involved in the process, including senior leadership, faculty, and department administrators.

Key takeaway: Using real examples (that are anonymized) facilitated impactful conversations and shared understanding. The outcomes may surprise you with the lively engagement and enlightening discoveries of where misunderstandings occur!
Taking a closer look at the supplier selection process
A financial approver received a requisition with a sole source justification (SSJ) for the routine printing of a quarterly brochure. The SSJ indicated that the supplier was selected because they were used previously.
However, the approver questioned why this service required this particular supplier’s expertise as it appeared to be a standard, straightforward service. The approver discussed this with the department and then asked the department to obtain additional bids from other vendors, which the department did. While the department ultimately selected their preferred vendor, the preferred vendor submitted a lower price once they knew there was competition for the service!

Key takeaway: By questioning the transaction and asking the department to follow best practices in supplier selection, the approver was able to help the department save funds.
Support for Approvers
As shown by the above stories, sometimes a transaction isn’t straightforward and approvers might be unsure as to whether to approve it. Financial approvers have several options available if they need additional support to navigate or vet a transaction or are unsure of how to handle a sensitive situation. These resources are guided by the knowledge that university leadership values and supports acting with integrity and accountability.
  • Financial Support Center (FSC): The FSC is available to answer questions about financial transactions, including purchasing policies and procedures.
  • Escalation to Dean’s office (or designee): Transactions that seem excessive or outside of university policy should be escalated within a unit for dean-level review.
  • Ethics and Compliance Helpline: Anyone that has concerns or suspects financial irregularities should confidentially contact the Ethics & Compliance Helpline for support. You can also contact the Ethics and Compliance Helpline anonymously. Administrative Guide Memo 3.5.1: Financial Irregularities contains additional guidance.
  • Ethics and Compliance Discussion Training: The Office of Ethics and Compliance offers a training for staff, focused on starting an ongoing dialogue about the importance of integrity and trust to the team and its work. The training highlights the Code of Conduct, the Ethics and Compliance Helpline, the importance of speaking up with questions or concerns, and explores how to handle difficult ethics and compliance situations through scenario discussion. If you are interested in learning more about this training or how to schedule a training for your team, please reach out to integrity@stanford.edu.
New Toolkit to Support Financial Approvers
In early May, FMS released a new set of resources to support financial approvers. In addition to an updated training, the resources include checklists and simplified Fingate content and highlight approver support.

Updated Training
FIN-PROG-0103: Approving Financial Transactions has been updated to support approvers. Please note that this course, among others, is required for new requisition and expense journal approvers and new labor distribution approvers.
Refreshed Checklists
To support the approver in assessing transactions, FMS has created two checklists that guide you through questions and relevant policies to consider: Fingate Guidance
Fingate content that is focused on financial approvers was recently streamlined to help approvers find relevant topics more easily: 
  • Financial Transaction Approval contains information on the roles and responsibilities of approvers as well as the types of financial transaction approval authority.
  • Proper Use of Funds addresses approver responsibilities and discusses new expenditure transactions and cost transfers.
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Financial Management Services (FMS) provides this quarterly newsletter as a part of its vision to inspire and enable excellence in financial stewardship.
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