01.03.01 – Baseline Standards
Section: General Information
Area: University-wide Business Management
I. PURPOSE AND SCOPE
Baseline standards are necessary to ensure sound business practices within an organization. This document sets forth the requirements for these basic internal controls to minimize the risks of misappropriation of assets and of material errors in financial statements. This document applies to all University of Houston operations.
II. POLICY STATEMENT
Each operating unit within the University of Houston will establish and adhere to baseline standards for its financial processes. These standards, once established, will be reviewed, altered as necessary, approved, and reported annually to the Accounting Services department.
III. DEFINITIONS
A. Baseline standards: A collection of operating objectives and techniques that establishes standards for financial processes across an organization, including accountability and responsibility.
B. Centralized structure: Operating structure in which the college or division business administrator has primary responsibility for both the management and processing of financial transactions.
C. Decentralized structure: Operating structure in which the college or division business administrator has primary responsibility for management and oversight of the financial processes, while the department or unit business manager has primary responsibility of the execution of the financial processes.
IV. ORGANIZATIONAL STRUCTURES
Basic internal control objectives do not vary between centralized and decentralized business operations. However, the techniques for ensuring that internal controls exist and are operating effectively do differ between organizational types.
A. Centralized structure: Under this operating structure, the college or division business administrator has primary responsibility for both the management and processing of financial transactions, although some processing may occur in the departments. The college or division business administrator will make recommendations regarding administrative issues and/or interpretations of university policies to the appropriate dean or vice president or to the Senior Vice President for Administration and Finance. Any questions regarding policy application or processing of transactions are directed to the college or division business administrator. They also review and authorizes all financial documents leaving the college or division. Any variations in standard university policy and procedures must be approved by the college or division business administrator. Department business managers report to the department chair and to the college or division business administrator.
B. Decentralized structure: Under this operating structure, the college or division business administrator has primary responsibility for management and oversight of the financial processes, while the department or unit business manager has primary responsibility for the execution of the financial processes. The college or division business administrator will make recommendations regarding administrative issues and/or interpretations of university policies to the appropriate dean or vice president or to the Senior Vice President for Administration and Finance. The college or division business administrator is responsible for communicating policy and procedure changes to the departments and units, ensuring that departments and units have adequate support to fulfill their responsibilities, and for ensuring that each department and unit has appropriate procedures in place to comply with minimum processing standards as defined below. The college or division business administrator is ultimately responsible for the control procedures in place at each department and unit. The department or unit business managers retain processing authority and direct responsibility for all financial documents leaving their areas. Department business managers report to the department chair and to the college or division business administrator.
V. PROCEDURES
A. The college or division business administrator should draft baseline standards for their operating unit. Centralized colleges/divisions may have one baseline standards document for the college/division, while decentralized colleges/divisions may have one document for each business department/unit within the college/division. Model baseline standards are provided at http://www.uh.edu/finance/Forms/Baseline_Standards_Form.xls .
B. The college or division business administrator should submit draft baseline standards to the dean or vice president for approval.
C. Current baseline standards documents should be sent to Accounting Services, who will submit them for publication in the A&F Survival Guide .
D. Prior to each fiscal year, the college or division business administrator should review existing baseline standards and amend if necessary. Updated baseline standards should be uploaded to the designated Accounting Services’ SharePoint folder in accordance with the stated annual deadline.
E. Baseline standards should be updated and resubmitted when departmental responsibilities change.
Issued: 12/09/1999
Last Reviewed/Revised: 04/30/2024
Responsible Office(s): Finance