Accountability and Business Rules ppt

Accountability and Business Rules
OBJECTIVES
§ Understanding the objectives of the UC Accounting Program and how they
are achieved through accounting and business rules in DaFIS
§ Understanding why certain requirements exist in policies and regulations
§ Knowledge of the features in DaFIS that provide accountability, and guidance
in using these features appropriately
CONTENTS
1. Objectives of the UC Accounting Program, p. 3
2. Stewardship Responsibilities, p. 4
§ Ethical Decision-making, p. 4
§ Strategic Direction for UC Business Administration & Operations, p. 5
§ UC Davis Principles of Community, p. 6
§ Policy Examples – Stewardship Responsibilities, p. 7
3. Accountability, p. 10
§ Authority / Responsibility / Accountability, p. 10
§ Policy Example – Accountability, p. 10
§ Internal Controls, p. 11
§ Establishing an Accountability Structure, p. 11
§ Routing, p. 14
§ Policy Examples – Internal Controls, p. 17
4. Laws, Regulations and Policies, p. 20
§ References, p. 20
§ Generally Accepted Accounting Principles, p. 20
§ Information Access, p. 21
5. Discussion Scenarios, p 23
6.
Workflow Diagrams, Appendix A, p 26
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OBJECTIVES OF THE UC ACCOUNTING PROGRAM
DaFIS is an electronic accounting system designed to achieve the objectives of the
University Accounting Program. Specific procedures in DaFIS ensure proper
accountability and compliance with university policies, and state and federal laws and
regulations.
The following passage from the University of California Accounting Manual (University
Accounting Program, Section A-000-4) describes the purpose of the accounting
program:
“The University of California maintains and operates a comprehensive accounting
program in order to meet its stewardship responsibilities and to provide
management information to all levels of the university’s administration, as well as
to state and federal officials.
The complete
Accounting
manual can be
viewed online at:
p.e
du/ucophome/poli
cies/acctman/.
The university, as a public institution, has a special stewardship obligation to
process properly and accurately all receipts and disbursements of funds; to account
for all financial resources received and used; to ensure that all financial transactions
conform to legal requirements and administrative policies, and are recorded in
accordance with generally accepted accounting principles for colleges and
universities; and to provide reports that present to university administrators and
the public a complete picture of the university’s funds and their uses.
In addition to these stewardship responsibilities, the university’s comprehensive
accounting program must provide financial information to all levels of university

administration for use in planning, budgeting, evaluating the uses of funds, making
comparative studies, and other purposes.”
In this class we will discuss these responsibilities, and how DaFIS can properly be used
to meet them.
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STEWARDSHIP RESPONSIBILITIES
Remember the first part of the Accounting Program Objectives: “The University of
California maintains and operates a comprehensive accounting program in order to
meet its stewardship responsibilities. . . .”
Our Public Trust
“The University of California shall constitute a public trust …”
California Constitution, Article 9, Education
“We recognize that each of us has an obligation to the community of which we
have chosen to be a part.”
UC Davis Principles of Community
“We succeed by earning the respect and trust of those who govern us, support us,
and do business with us.”
Mission of UC Business Administration and Operations
Ethical Decision-making
Making ethical decisions, collectively and individually, is at the core of ensuring that we
meet our stewardship responsibilities.
What are Ethics?
Moral principles of duty and virtue that prescribe how we should behave.
Principles provide a means of evaluating and deciding among competing options.
© 2000 Josephson Institute of Ethics – Reprinted with Permission
What are Values?
Values are important beliefs and desires that shape attitudes and motivate actions.
© 2000 Josephson Institute of Ethics – Reprinted with Permission
Are Values Different from Ethics?

§ “Values” are inner judgments about how a person actually
behaves.“Ethics is concerned about how a person should
behave.Values concern ethics when they pertain to beliefs about what
is right or wrong.
© 2000 Josephson Institute of Ethics – Reprinted with Permission
Perception is Reality
§ When it comes to trust, perception is reality.
§ It’s not enough that we do no wrong, we must also try to assure that others believe
we have done no wrong.
© 2000 Josephson Institute of Ethics – Reprinted with Permission
Classical Fallacies About Ethics
It’s not unethical if:
1. It’s for a good cause.
2. I’ve got it coming.
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3. It’s legal.
4. Everyone does it.
5. Others are a lot worse.
6. I don’t get caught.
7. It’s not for me.
8. It benefits my family.
9. It’s necessary / It’s the only way I can win
10. I’m just following orders.
11. My job is on the line.
12. I’m just fighting fire with fire.
13. No one is really hurt
© 2000 Josephson Institute of Ethics – Reprinted with Permission
The Rat Race
The problem with the rat race is that, even if you win you are still a rat. – Lilly Tomlin

© 2000 Josephson Institute of Ethics – Reprinted with Permission
Bell, Book and Candle Test
§ Listen for the bells warning you of an ethical issue.
§ Check to see if there are any laws, regulations or rules restricting your choice.
§ How would your decision look in the light? Could a reasonable, fair-minded
person conclude you acted improperly?
© 2000 Josephson Institute of Ethics – Reprinted with Permission

Strategic Direction for UC Business Administration and
Operations
The following are defined by the Office of the President (the full text can be seen at
/> ):
Vision
Building the world's best university in partnership with our faculty and academic
leadership
Mission
UC’s business administration and operations foster and support the academic mission
by employing sound business practices, simple and cost effective operating processes,
proven technologies, ethical business relationships, and a trained and service-
oriented workforce. We succeed by earning the satisfaction of our customers; the
respect and trust of those who govern us, support us, and do business with us; and the
pride of our employees.
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Values and Principles
§ We strive for excellence in everything we do.
§ We foster the UC values of honesty, integrity, collegiality, and respect for
diversity.
§ We work collaboratively to support the UC’s interests while respecting individual
campus needs and approaches.

§ We provide the means to help all members of the UC community fulfill their
business objectives in a responsible, ethical, and cost effective manner.
§ We balance the needs of our customers with the need to safeguard and grow
university resources for the future.
§ We localize decision-making authority whenever possible and link localized
authority with responsibility and accountability.
UC Davis Principles of Community
The campus adopted the following principles of community over a decade ago.
Everything we do as an institution, and as individuals, should be done with the
following in mind:
The University of California, Davis, is first and foremost an institution of learning and
teaching, committed to serving the needs of society. Our campus community reflects
and is a part of a society comprising all races, creeds and social circumstances. The
successful conduct of the university's affairs requires that every member of the
university community acknowledge and practice the following basic principles:
We affirm the inherent dignity in all of us, and we strive to maintain a climate of
justice marked by respect for each other. We acknowledge that our society carries
within it historical and deep-rooted misunderstandings and biases, and therefore we
will endeavor to foster mutual understanding among the many parts of our whole.
We affirm the right of freedom of expression within our community and also affirm
our commitment to the highest standards of civility and decency towards all. We
recognize the right of every individual to think and speak as dictated by personal belief,
to express any idea, and to disagree with or counter another's point of view, limited
only by university regulations governing time, place and manner. We promote open
expression of our individuality and our diversity within the bounds of courtesy,
sensitivity and respect.
We confront and reject all manifestations of discrimination, including those based on
race, ethnicity, gender, age, disability, sexual orientation, religious or political beliefs,
status within or outside the university, or any of the differences among people which
have been excuses for misunderstanding, dissension or hatred. We recognize and

cherish the richness contributed to our lives by our diversity. We take pride in our
various achievements, and we celebrate our differences.
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We recognize that each of us has an obligation to the community of which we have
chosen to be a part. We will strive to build a true community of spirit and purpose
based on mutual respect and caring.
(The Principles of Community can be found online at
/> )
Policy Examples — Stewardship Responsibilities
The following excerpts from the Policy & Procedure Manual (P&PM) illustrate how
policy is written to ensure that we meet our stewardship responsibilities. (The P&PM
is available online at /> ).
Acceptance or Offering of Gifts and Gratuities by University Employees (380-55)
As a public institution of higher education and a custodian of public funds, the
university is concerned that there be appropriate safeguards against any appearance of
favoritism in its relations with other entities, either public or private. To avoid any
such appearance of favoritism, no officer or employee should accept any gift or
gratuity from any source that is offered or reasonably appears to be offered because of
the university position held by the officer or employee, nor should an officer or
employee extend an offer of a gift on a similar basis.
Gift Reporting Procedures (260-25)
When a gift is received, it is recorded in DaFIS using the Statement of Cash
Collections document. If it is equipment, a DaFIS Add Asset or Multiple Add Asset
document also needs to be completed. University Relations’ Advancement
Information System (AIS) asks for both DaFIS account codes and legacy
Loc/Account/Fund/Sub numbers, but either can be entered. New gifts not yet
assigned an OP fund number should cite 90000 as the OP fund number. Extramural
Accounting will change this to the actual new OP fund and advise University
Relations.

Agency Account Services (330-09)
This section covers the creation and use of agency accounts maintained by campus
Accounting & Financial Services for funds held by the university as custodian or fiscal
agent on behalf of principals (i.e., individuals, faculty/staff/student organizations,
private organizations, and other sponsors).
Entertainment with University-Controlled Funds (330-80)
As with travel expenses, entertainment expenses require the handwritten signature of
the host, attesting to the necessity and appropriateness of the expense. Therefore,
Request for Issuance of Check - Entertainment Expense, Form D2853 is used, in
addition to the DaFIS Entertainment Expense Voucher (EEV). This paper form,
along with any additional documentation, should be routed concurrently with the
DaFIS electronic document, and be available to all additional reviewers. The paper
form should indicate the EEV document number. For entertainment expenses in
excess of $250, department heads must also obtain the approval of their dean or vice
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chancellor. This approval can be obtained via electronic routing. There are occasions
for which judicious extension of hospitality in connection with official university
business is in the best interest of the university.
A. CONDITIONS FOR APPROVAL
1. Expenses for entertainment must be directly related to, or associated with,
the active conduct of official university business. When a university
employee acts as an official host, the occasion must, in the best judgment
of the approving authority, serve a clear university business purpose, with
no personal benefit derived by the official host or other university
employees. In addition, the expenditure of funds for entertainment should
be cost effective and in accordance with the best use of public funds.
2. When determining whether an entertainment expense is appropriate, the
approving authority must evaluate the importance of the event in terms of
the costs that will be incurred, the benefits to be derived from such an

expense, the availability of funds, and any alternatives that would be
equally effective in accomplishing the desired objectives.
University Payment of Membership Fees (330-75)
It is the policy of the University to consider membership in organizations that would
promote the advancement of education and research, enhance the professional
standing of its administrative personnel, and facilitate favorable campus-community
relations.
It is often in the best interest of the university to consolidate payment of multiple
individual membership fees into a single institutional membership. The Chancellor
retains approval authority for memberships in organizations of universities and
colleges and community organizations. The approval of deans and vice chancellors is
required for other memberships. Authority to approve membership requests may not
be re-delegated. After initiation of the appropriate DaFIS purchasing document, ad
hoc or review hierarchy routing should be used to obtain these higher-level approvals.
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1. Costs in relation to benefits shall be considered.
2. Payments shall not be made to organizations that are primarily social (e.g.,
country clubs).
3. Payments shall not be made to support an organization's political action
committee or to any organization whose primary activities include carrying
on propaganda, or otherwise attempting to influence legislation, or
participating or intervening in any political campaign on behalf of any
candidate for public office.
4. Whenever possible, institutional rather than individual memberships shall
be obtained, as the former often allow participation by several or alternate
employees. Individual memberships shall be purchased only if particular
circumstances warrant an exception; the decision to grant an exception
shall be based on an evaluation of the benefits to the university. In no
case may more than one institutional membership in any organization be

purchased on the campus.
5. Memberships and employee participation in community organizations
should be held to the number necessary to achieve effective campus-
community relations within a reasonable expenditure of funds.
6. Departments may purchase a membership in an organization to secure its
periodicals if the periodicals cannot otherwise be secured. Such
periodicals will become the property of the university rather than of an
individual, and must be made available to all department faculty, staff, and
students.
7. University libraries may secure periodicals for their collections that cannot
be obtained except through membership.
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ACCOUNTABILITY
Remember the second paragraph in the of the Accounting Program Objectives?
“The University, as a public institution, has a special stewardship obligation to
process properly and accurately all receipts and disbursements of funds; to account for
all financial resources received and used; …”
This further defines our stewardship obligation, and brings in the issue of
accountability. So, just what is accountability?
Authority/Responsibility/Accountability
Authority is the power to direct (or delegate) that a task be done.
Responsibility is the obligation to do it.
Accountability is an obligation or willingness to accept responsibility or to furnish a
justifying analysis or explanation for one’s actions.
Merriam-Webster’s, Collegiate Dictionary
, Tenth Edition
True Accountability is:
§ How the human, financial and political resources are being used.
§ How well the leadership is carrying out the unit’s mission.

§ What risks legal, financial, and other are being incurred by the unit.
§ The quality of decisions being made.
Policy Example - Accountability:
The following policy excerpt illustrates the issue of accountability:
Travel Policies & Regulations (300-10)
It is the policy of the university that all official travel shall be properly authorized,
reported, and reimbursed in accordance with university travel regulations. Under no
circumstances shall travel expenses for personal travel be charged to, or temporarily
funded by, the university. When a university employee travels under the sponsorship
of a non-university entity, the travel expenses shall not be charged to a university
account; travel advances and tickets should be obtained from the sponsor. University
employees traveling on official business shall observe normally accepted standards of
propriety in the type and manner of expenses to incur. It is the responsibility of the
traveler to plan university travel in such a manner as to minimize the cost to the
university.
The paper Travel Expense Form, along with all receipts and other documentation,
should be routed concurrently with the DaFIS electronic document, and be available
to all additional reviewers. The paper form should indicate the DaFIS TEV document
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number. Ultimately, the paper Travel Expense Form will route to, and be maintained
in, the Accounts Payable office.
Internal Controls
… are processes, effected by the Regents, administration, faculty and staff, designed to
provide reasonable assurance regarding the achievement of the university’s objectives
in the following categories:
- Effectiveness and efficiency of operations.
- Reliability of financial reporting.
- Compliance with applicable laws & regulations
Internal Control - Integrated Framework, July 1994

Five Components of Internal Control — COSO*
Control Environment - Tone at the top, integrity, ethics, competence
Risk Assessment - Process of identifying and evaluating risks (threats) to achieving
objectives
Controls Activities - Actions that help management mitigate identified risks and achieve
objectives
Information and Communication - Capture and analysis of relevant operational, financial
and compliance information, and communication of such information to stakeholders
Monitoring - Assessing the quality of the internal control system over time
* COSO is the Committee Of Sponsoring Organizations of the Treadway Commission.
Establishing an Accountability Structure
It is the responsibility of departments, deans’ offices and vice chancellors’ offices to use
the functionality of DaFIS to ensure appropriate accountability.
Core Principles
Setting the appropriate accountability delegations begins with the core principles listed
below:
§ Heads of all campus organizational units, by virtue of their
appointments, have been delegated authority to approve departmental
transactions. In most cases, this authority may be re-delegated to
departmental representatives. (330-10)
§ Individuals delegating accountability can only do so to the extent that
this same accountability has been delegated to them.
§ Individuals delegating accountability are responsible for ensuring the
qualifications of the individuals to whom they delegate, as well as the
proper fulfillment of their responsibilities.
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§ Qualified individuals are those who:
ú Manage the activities being conducted;
ú Possess a working knowledge of the budget, an adequate level of

technical skills required to use DaFIS, and an awareness of
policies, rules, laws, regulations or other restrictions on the use of
the funds sufficient to either ascertain compliance or seek
additional assistance; and,
ú Have been provided sufficient authority to fulfill their
responsibilities so they can disallow a transaction without being
overruled or subject to disciplinary action.
§ Department heads must sign all authorization or cancellation forms.
(Forms are available online at
.)
1. A DaFIS Approval Authorization or Cancellation form is required
to document delegations of authority by the department head for
financial business transacted in DaFIS.
2. A Payroll Signature Authorization or Cancellation form is required
to document delegations of authority by the department head for
payroll and personnel transactions.
3. An approval or signature authorization cancellation form must be
promptly processed to cancel authorizations upon separation of an
employee or transfer of an employee to a position not involving
approval responsibility previously delegated.
DaFIS Roles & Responsibilities
Everyone active in conducting the business of the university has a role to play in
accountability, whether or not they are DaFIS users.
Document Initiators – DaFIS document initiators are expected to prepare transactions
accurately and appropriately, in compliance with policies and procedures. Document
initiators (like all users) are accountable for transactions processed under their user ID.
Account Managers/Approvers – Documents route to account managers and/or other
approvers (e.g. delegates), by one of the routing mechanisms in DaFIS. It is the
responsibility of account managers and other approvers to review documents for
compliance with university policies and procedures, then approve or disapprove them.

Transaction Listing Reviewers – These reviewers are responsible for performing the
monthly review of the Transaction Listing (2) (a.k.a. the ledger) in Decision Support,
and certifying the validity of the charges and credits.
Department Heads – By virtue of their appointments, department heads have the
authority to approve departmental transactions. They can delegate to departmental
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representatives, provided the delegation is within the policy (see
/>). Departmental
financial transactions must be fully approved in DaFIS. However, in the event the
department head is not a DaFIS user, a hard copy approval provided to both the
Document Initiator and the Account Manager/Approver will suffice.
Delegates
Account managers may wish to establish delegates for one or more accounts, to ensure
that business continues in a timely manner. Delegates can be created for each account,
and can be based on dollar amount and/or document type. There are two types of
delegates: – primary and non-primary.
Primary - documents will route to this person instead of to the account manager. The
account manager can still access the documents via the In Box choice called Alternate:
Search as Acct Mgr
.
Non-primary - documents will continue to route to the account manager, but the non-
primary delegates could access them via the In Box choice called Alternate: Search as non-
primary
. This delegate type is generally used for approvals in the account manager’s
absence.
For more on delegates, please review the Using Account Delegates tutorial, at
/>.
Review Hierarchies
Review hierarchies allow additional levels of approval, beyond account manager

routing. Review hierarchies can be established based on dollar amount and/or
document type. Use of Review Hierarchies is at the departments discretion. Review
hierarchies can be for approval or for review. To create or revise a review hierarchy,
use the Review Hierarchy document.
The following Decision Support queries allow you to review your organization’s
accountability structure within DaFIS:
§ Access Manager Delegation Information (149)
§ Account Delegate Lookup (167)
§ FIS User Lookup (86)
§ DaFIS User Responsibility (214)
§ Organization Hierarchy (50)
§ Review Hierarchy Lookup (166)
To ensure that an appropriate structure is in place, the Department Head should
review these reports quarterly.
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Routing
While departments remain responsible for ensuring that their transactions receive
appropriate approvals, with DaFIS, much of the processing is automated. DaFIS
provides many tools to allow you to design workflow to comply with policy. Routing
is one such tool.
Routing Types
Ad Hoc Routing – Allows initiators and/or approvers to route documents on an as-
needed basis to any other user in the system, either for approval or FYI. Ad hoc
routing is used to acquire approvals not otherwise possible.
Account Manager Routing – The system automatically routes most documents to the
account manager for each account cited in the document. The exceptions are below.
Review Hierarchy Routing – Allows additional approvals to be required at the
organizational level, after account manager routing. This could be used to route
documents that otherwise wouldn’t route to the account manager.

Special Conditions Routing – Allows central administrative offices to work with
Financial Services to build into the system much of the routing required to comply
with policy. For instance, Special Conditions Routing is used to obtain required
administrative approvals (Facilities Services, Fleet Services, EH&S, etc.) for some
purchases before they are processed in the Purchasing department.
Documents created by departments, that bypass account manager routing
The following documents do not have Account Manager Routing, however Review
Hierarchy can be established where necessary:
§ Cancel/Close Departmental Purchase Order
§ Statement of Cash Collections (does not have review hierarchy routing)
§ Sub Object
§ Most of the Accounts Receivable maintenance documents
§ Any document that does not have an account field on it (i.e. FIS User,
Organization, Project, Review Hierarchy, Workgroup, etc.)
§ Any document initiated by the account manager, that contains only accounts
for which the initiator is the account manager
Documents initiated by Account Managers are automatically approved at the Account
Manager level. However, if a document contains one or more accounts for which that
individual is not the account manager, the document will route to the other account
managers for approval.
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Documents created by Accounting and Financial Services or other departments,
that bypass account manager routing
Most of the documents that bypass account manager routing are generated in Financial
Services or other central administrative offices, as illustrated in the table below.
DOCUMENT NAME DEPARTMENT THAT CREATES IT
Cancel Check Accounts Payable
Cancel Non-check Accounts Payable
Change Order Purchasing

Closed Payment Adjustment Accounts Payable
Fund Balance Adjustment Financial Services
Fund Balance Adjustment Year End Financial Services
Hold Payment Accounts Payable
Journal Voucher Financial Services
Journal Voucher Year End Financial Services
Manual/Rush Check Accounts Payable
Non-Check Disbursement Accounts Payable
Non-Purchasing Agreement Accounts Payable
Purchase Order Purchasing
Restricted Account Financial Services
Restricted Base Budget Adjustment Resource Planning and Management
Restricted Current Budget Adjustment Resource Planning and Management
Stale Dated Check Accounts Payable and Internal Control
State Tax Remittance Accounts Payable

To keep Account Managers fully apprised of all activity in their accounts, Accounting
& Financial Services has committed to routing FYI copies of these documents to the
managers of any affected accounts. We encourage service departments and others to
adopt a similar policy.
Routing Logs
Each document processed in DaFIS has a routing log to record the approvals,
cancellations, and reviews made on the document. These logs provide a record of
accountability for the transaction. During routing, the log reflects the current level of
routing. Once all approvals have been made or the document is canceled, the log will
show the entire history of approvals, cancellations, and reviews.
The following routing logs illustrate different types of routing, and reflect the history of
accountability that each provides:
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ACCOUNT MANAGER & ACCOUNT REVIEWER ROUTING

The routing log above illustrates the standard routing for a document requiring only
account manager approval. The first entry reflects the initiator of the document, and
the date it was completed. The next routing is to the account manager. In this case,
the account manager (JIMBOB) received the document on 5/16/02 and approved it
the same day. In addition to the account manager, this account has an account
reviewer (FOZZY). The log shows that the reviewer received the document on
5/16/02. FYI routing is only accomplished once all approvals are received. FOZZY
reviewed this document on 5/16/02, after the account manager approved it.
REVIEW HIERARCHY ROUTING USING A WORKGROUP

In addition to account manager approval, this document had to be approved by
someone in a review hierarchy workgroup. The log reflects the fact that all four
workgroup members had the document in their In Box. Any member of the
workgroup had the ability to approve the document. In this case, the user JOBFREE
approved the document on 5/21/02. That user ID now appears on the Action side
for all four workgroup members. JOBFREE becomes accountable for the transaction,
since he approved for all members of the workgroup.
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CANCELED DOCUMENTS

This routing log shows that the document was approved by the initiator (FOZZY) and
the account manager (JIMBOB), but was then cancelled by JOBFREE, on behalf of
the review hierarchy workgroup. The system then automatically routed the document
back to those in the routing process. Neither JIMBOB nor FOZZY have reviewed
the document since the cancellation.
Policy Examples — Internal Controls
The following policy excerpts illustrate the importance of establishing proper internal

controls.
Approval Authorization (330-10)
The DaFIS Approval Authorization form allows department heads to delegate
approvals for their organization to a DaFIS Account Manager (or delegate),
authorizing that individual to approve some or all of the department’s financial
business directly in DaFIS.
This delegation is not required department heads may choose to retain some or all of
their approval authority. However, all financial transactions must be entered and
approved in DaFIS. Therefore, should a department head choose to retain this
approval authority, it will be the department’s responsibility to design and maintain
departmental internal control procedures that make this possible.
The delegation of Category II approvals requires concurrence of a higher-level
authority.
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Administrative Controls and Segregation of Duties (330-11)
This section discusses the review of monthly reports, equipment and supply
inventories, and segregation of financial administrative duties. In reviewing reports,
the reviewer shall sign a departmental reviewer's certification log (which should include
the account numbers, transaction month, reviewer's signature, and the date received)
for the DaFIS transactions and the departmental reviewer's certification section printed
on the last page of payroll reports. Regarding equipment, departments shall take a
physical inventory of their inventorial equipment at least once every two years.
Regarding supplies, inventory records need to be kept if the supplies are for the
purpose of resale or for recharge within the university, and if the supply inventory
exceeds $50,000. Segregation of duties means that no one person has complete
control of a financial transaction. For example, someone approving DaFIS documents
should be different than the person reviewing the Ledger.
Disbursements and Documents Supporting Financial Transactions (330-15 and
330-40)

Documents listed in section 330-15 must be retained for review by internal, external,
and governmental auditors for the periods specified in the records disposition
schedules (see Section 320-15). Other documentation developed during the course of
financial transactions is considered informational material leading to required
certification or documentation otherwise required and need not be retained. The
Accounting Office, heads of departments, and Senior Vice President Administration
are responsible for retaining the documents cited in this section.
Section 330-40 outlines the procedure for issuing a payment for a vendor invoice and
describes the use of the UC Davis Financial Information System (DaFIS) Direct
Charge document, but briefly, here is the procedure:
§ A DaFIS document is created, and approvals obtained in DaFIS;
§ The DaFIS document number is written on all invoices and/or other
documentation;
§ The original invoice (or, if no invoice is available, an Accounts Payable
Request for Document Action, Appendix A.14.VII) is forwarded to Accounts
Payable for processing.
The campus Accounts Payable Division of Accounting & Financial Services is the
office of record for documentation supporting non-payroll disbursements.
Departmental Cashiering Operations (330-55)
Tasks unrelated to cashiering (e.g., collection follow-up of accounts receivable,
distribution of payroll or other checks) shall not be performed by cashiers. Individual
accountability for cash shall be maintained throughout all cashiering operations. The
DaFIS document that is used is the Statement of Cash Collections.
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Cost Transfers (330-63)
It is University policy that expenses be charged directly to the account to which they
pertain. It is recognized, however, that expenditure adjustments are occasionally
necessary to correct bookkeeping or clerical errors in the original charges. It is also
recognized that closely related work may be supported by more than one funding

source and that in such cases an expenditure adjustment of costs from one funding
source to another may be proper. This section details the conditions under which
expenditure adjustments are appropriate.
Procurement Authority (350-10)
This section covers authority to purchase university goods and services and procedures
for administrative review of unauthorized purchases. In general, the Director, Materiel
Management or his designee is authorized to commit university funds for procurement
of goods and services by issuance of a purchase order. This section addresses the
university’s commitment to small businesses and covers procurement processes as they
relate to federal contracts and grants.
Departmental Purchase Delegation (350-21)
This section addresses key concepts pertaining to departmental purchase transactions.
These include the department head’s responsibilities, things to consider when
purchasing, avoiding conflict of interest (or the appearance of), and rebates.
Because a valid DaFIS DPO or DRO must be created and approved before an invoice
can be paid, it is essential that a valid DaFIS DPO or DRO number be obtained prior
to placing a telephone order. That DaFIS number should be given to the vendor and
cited on the external vendor invoice.
Procurement Through the Purchasing Department (350-25)
It is university policy to meet its need for goods and services at the lowest overall cost
while affording the maximum opportunity practicable to those who wish to become
suppliers to the university. State law subjects the university to competitive bidding
rules. The Purchasing departments are responsible for assuring that each procurement
action meets the mandates applicable by these and other policies, laws, or statutes.
If a department needs to forward any samples, sketches, or other necessary documents
that would aid the buyer in ordering the product, the department should use the Cover
Sheet for Purchasing Requisition Attachments (Exhibit A). When this form is used,
the initiator should alert the Purchasing department of the pending arrival of these
attachments, using the “Document Notes” screen on the purchase requisition.
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DAFIS USER’S GUIDE
Laws, Regulations and Policies
“The university, as a public institution, has a special stewardship obligation to …
ensure that all financial transactions conform to legal requirements and administrative
policies, and are recorded in accordance with generally accepted accounting principles
for colleges and universities; and to provide reports that present to university
administrators and the public a complete picture of the university’s funds and their
uses.”
References
The following references provide the guidelines in the area of “legal requirements and
administrative policies” that we must meet.
Government Regulations:
§ Federal and State Regulations, Guidelines and Laws:

UC Systemwide Policies & Manuals:
§ Systemwide policies:
§ Accounting Manual:

§ Business & Finance Bulletins:

§ Contract and Grant Manual:

§ Conflict of Interest Code:

§ Records Management Disposition Schedule:

UC Davis Policies:
§ UC Davis Policy & Procedure Manual:

§ UC Davis Sponsored Research Manual

Generally Accepted Accounting Principles
Aside from the laws and regulations, we have to meet the standards for colleges and
universities. Keep these basic principles in mind when creating DaFIS transactions:
§ Consistency – Handle similar transactions the same from year to year.
§ Charge expenditures to appropriate funds and accounts.
§ Recognize revenues and expenditures in the accounting period in
which they become available or incurred, and measurable.
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ACCOUNTABILITY & BUSINESS RULES
Information Access
“The university supports the principle that access to information concerning the
conduct of business in a public university is a right of every citizen. It further supports
the principle of securing to individuals their fundamental right of privacy.”
UC Davis P&PM 320-20.III (
State and Federal Mandates
The University of California is a public university. As such, it is bound by the legal
requirements governing privacy of, and access to, information specified in the
following three documents:
1. California Information Practices Act – This act guarantees individuals access
to personal files maintained on them, with certain limitations, and sets
forth provisions to govern the collection, maintenance, accuracy,
dissemination, and disclosure of information about them. Special
procedures for providing access to, and protecting the privacy of,
university records containing personal data are required by the
Information Practices Act.
2. California Public Records Act – This act provides that access to information
concerning the conduct of the people’s business is a fundamental and
necessary right of every person in this State; that upon request public
records must be available to public inspection within a reasonable time;

and that every citizen has the right to inspect any public records except as
provided in the Act.
3. Federal Privacy Act of 1974 – This is designed to safeguard the rights and
privacy of individuals from the encroachments of federal agencies in
maintaining records on individuals. Among other things, the Federal
Privacy Act of 1974 governs the collection, protection and use of social
security numbers.
University Policy
Data in university databases are an increasingly important university resource. To
allow the university to fulfill its mission of teaching, research and public service,
systems must be in place that contain and generate reliable information. Data
generated in the course of university business is the property of the Regents of the
University of California, and as such is an asset of the university.
UC Davis PPM, Section 200-45, Administrative Information Systems – As noted in this
section, “Timely and efficient access to records, files, or databases shall be provided to
those university officers and employees whose work requires it.”
UC Davis PPM, Section 320-23, Disclosure of Information From Public Records – “A
university employee may not use university records for purposes other than those that are
relevant and necessary to the performance of his/her official duties. This includes records
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DAFIS USER’S GUIDE
generated by the employee in his/her capacity as an employee or agent of the
university. Any other use of such records must be requested pursuant to this policy by
the employee acting in his/her capacity as a member of the public.”
UC Davis PPM, Section 310-16, Electronic Communications Policy – This policy governs
the user of computers and networks on the UC Davis campus. Among other things,
this policy addresses who is allowed to use the system, what the system can be used
for, policy violations, and records management. All UCD employees who utilize
computer applications should become familiar with this policy.
In summary, the university is committed to providing access to information that

employees need to perform their official functions; however, it is not appropriate for
employees to access information other than that which is necessary to carry out those
functions. Procedures are in place and can be utilized if employees, in their capacity as
private citizens, wish to access such information.
DaFIS Access, Access Types, and Access Levels
Generally, anyone with a university financial business need can have access to DaFIS.
Even student employees may be granted access to the system, provided there is a
business need, they have had appropriate training and will be closely supervised. (See
/> for information on DaFIS access.)
It is not
appropriate
for employees
to access
information
other than
what is
necessary for
them to carry
out their
official
functions
The types of DaFIS users are: FIS user (meaning access to both TP and DS), DS Only
user, and DS Direct Database user. Most users have FIS user access.
FIS user access is further divided into levels (e.g., Deans, etc.) based on the user’s role.
You can view the list of access types that comprise FIS user access in the FIS Update
Ability Codes table in Transaction Processing (under Inquiries/Reference Tables).
DS Only access is generally for faculty and staff without a daily business need for
DaFIS. Someone with this access can’t create documents, but can view reports. For
more information on DS Only access, see

Someone with DS direct database access can design their own queries and extract data.
For more information on this, go to

The following Decision Support queries allow you to review the names of those in
your organization that have access to DaFIS, and what their access/responsibilities are
within the system:
§ FIS User Lookup (86)
§ DaFIS User Responsibility (214)
To ensure that only appropriate users have access, the Department Head should
review these reports quarterly. Prompt action should be taken to revoke the access of
anyone who should not have access or who has left the university.
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ACCOUNTABILITY & BUSINESS RULES
DISCUSSION SCENARIOS
A. Last year your department made considerable use of temporary employees from
one particular firm in your city. You know that your decision is based on both cost-
effective criteria and because it is the best agency in the area. In December, you
receive a case of wine and a card with holiday greetings from the agency. Do you:
1) Accept the gift for the university and give it to the Chancellor’s wine
collection for entertaining donors?
2) Accept the gift, drink the wine quickly and throw away the bottles?
3) Politely decline the gift telling the vendor that accepting it would not be
appropriate?
B. Your department set up an agency account to pay for the costs of a workshop.
After the workshop, the account had a remaining balance of $100. Your Chair
announced that a long time employee will retire next month. The Chair then asked
you to plan a retirement party and collect money from department personnel. Do you:
1) Use the existing agency account and the remaining $100 to collect money
and pay expenses?
2) Refund the $100 to the Principal and use the agency account to collect

money for the retirement party?
3) Close the agency account, refund $100 to the Principal and open a new
agency account for the retirement party?
4) Close the agency account, refund $100 to the Principal and store the
money collected for the retirement party in a locked box?
C. Your department receives significant federal funding for research. When
entertaining personal friends or relatives socially who work for NIH or NSF, you
should:
1) Refrain from any business discussions and the use of any alcoholic
beverages.
2) Submit an Entertainment Expense Voucher claiming reimbursement.
3) Pay the costs yourself.
4) 1&2 above.
D. The employee that does the accounting in your department is a CPA and has asked
permission to join the American Institute of Certified Accountants (AICPA). In
support of that employee’s professional development, you agree to pay the costs of
membership. The person turns in the membership application that shows the
enrollment fee of $65, the membership dues of $120, and a contribution to the AICPA
Political Action Committee of $10. The AICPA PAC monitors federal legislation and
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DAFIS USER’S GUIDE
regulations to ensure that accounting and auditing matters are technically correct and
do not adversely affect the accounting profession. Do you:
1) Approve payment since the contribution is small?
2) Ask the employee for a check to pay the $10 contribution?
3) Ask the employee to remove the contribution and resubmit the
application for payment?
4) Change your mind and refuse to pay the membership?
E. You travel on an overnight business trip. You stay at a relative's house instead of a
hotel and eat your dinner meals at your relative's home. You would like to submit a

Travel Expense Voucher, be paid for meals on the road and then pay your relatives for
their hospitality. Would you submit the TEV?
1) Yes
2) No
F. A valued employee has worked for you for years and is the kind of worker you can
depend upon to put in extra time and effort when it is needed. This employee has
stood by you several times during crises. Recently, this employee came to you and
admitted to "borrowing" money from the petty cash fund for some time, and writing
false receipts to cover it. It was never much; usually $20 to $50, and was always repaid.
But the employee has felt so guilty recently and needed to confess. Do you:
1) Take disciplinary action with a goal of terminating the employee?
2) Counsel and give the employee a second chance?
3) Report the employee’s actions as an allegation of misuse under PPM
Section 330-95?
G. Since the fully executed award document has not been received from NIH, you
have been directed by your supervisor to charge your time to another contract’s
account and later transfer the costs. Do you:
1) Explain to your supervisor that mis-charging intentionally on a
government contract is fraud?
2) Refuse to charge your time to the other contract?
3) Charge your time as directed by your supervisor?
4) Ask your supervisor to follow Sponsored Research Manual procedures for
the expenditure of funds in advance of receipt of the award document?
5) Ask for an overhead account to charge your time to?
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ACCOUNTABILITY & BUSINESS RULES
H. Are you acting ethically in accepting a luncheon invitation and “free
demonstration” of a personal software package from a firm that wants to sell you their
product?
1) Yes

2) No
I. You happen to see the Assistant Vice Chancellor to whom you report being wined
and dined after hours by the head sales representative of a large, established company
that is competing for a contract with your department for $500,000. Based on sound
analysis, your personal favorite to be awarded the contract is a young company, with a
short, but equally excellent record of achievement. You suggest that the money be
awarded to the newer, smaller company. If the Assistant Vice Chancellor awards the
contract to the larger company anyway, is it right for you to disclose to the Vice
Chancellor that your supervisor may have been influenced by the actions of the larger
company?
1) Yes
2) No
J. Your organization receives significant funding from the Federal government by
winning competitive bids for various scientific and technical projects. In essence, the
Federal government is your client or customer. It is a very common practice for your
organization to hire persons retiring from the Small Business Administration to work
on your projects because of their technical expertise and their "contacts" within the
government (your major customer) and the business community. Is this an ethical
hiring practice?
1) Yes
2) No
K. Your supervisor asks you to transfer costs and draft a financial report that reflects a
positive bottom line, when in fact there is a deficit. This report is to be used by others
in evaluating your supervisor's management of allocated funds. Do you draft the
report?
1) Yes
2) No
Sources: Azzaretto, John, Are You an Ethical Business Officer, UC BOTC, Dec 1997 (Questions A, E, F, H, I, K,)
© Martin Marietta Corp., Gray Matters –The Ethics Game
, 1992 (Questions C, G & J with modifications)

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