Amended September 13, 2022
California State law vests the authority of management of the Institute in the Board of Trustees. Accordingly, the Board of Trustees provides that:
a. The President, or their designee, shall have the authority to sign contracts and documents in the name of the Institute, except to the extent such authorization is restricted by the Board of
Trustees.
b. The Vice Presidents shall be administrative officers of the Institute with such powers and duties as are delegated to them by the President.
Agreements between the Institute and external entities in which the Institute provides goods, services, or other deliverables in return for consideration are commitments that bind the Institute. In general, they must be executed by an Officer of the Institute. Corporate officers are appointed annually by the Board of Trustees. This is designed to ensure that external engagements are consistent with the goals and objectives of the Institute, are priced adequately and correctly and do not expose the Institute to unacceptable financial or legal risks.
The authority granted by the Board of Trustees has been refined by specific limitations of authority as set forth in this policy.
This policy:
- Defines the monetary thresholds for approval authority for transactions which commit or expend Institute funds.
- Sets forth principles for guidance to operating units in implementing approval authority practices and procedures.
- Specifies those decisions requiring Board and/or institutional approval.
- Approval authority for transactions is based on dollar value. A transaction is any act which binds or commits the Institute. The size of a transaction is its collective amount over the entire period of commitment. Irrespective of spending authority, any contract amount greater than $250,000 requires legal counsel review.
Purchases/Capital Projects, consistent with the Institute’s budget plan and objectives (the construction of new buildings and additions, alterations or renovations to existing buildings as well as to site services and landscaping):
Up to $10,000 - requires approval by a dean or department head. The dean or department head may delegate this authority to an authorized signer(s) within the school or department. Deans and department heads will submit an authorized signer form to accounts payable annually to define this authority.
Between $10,000 and $50,000 - requires approval by a dean or department head and the Vice President or the AVP of Facilities or the AVP of Capital Facilities Planning for Capital expenditures, and the Vice President for Information Technology for technology expenditures, and the Associate Vice President for Finance and Administration for operating expenditures or the Treasurer/CFO. The dean or department head may delegate this authority to an authorized signer(s) within the school or department.
$50,001 to $750,000 - requires approval by the President, Provost, Treasurer/CFO, or the Associate Vice President of Finance and Administration/Assistant Treasurer
$750,001 to $1,500,000 requires approval by both the President and the Treasurer/CFO. All transactions must be approved by an authorized person other than the one who initiated the purchase or project. Upon final approval of a transaction at this level, either the President or the Treasurer/CFO will inform the Executive Committee of the transaction(s)
$1,500,001 to $3,000,000 requires approval by the Executive Committee. At the next meeting, the Board of Trustees will be informed of the approval of these transactions. Specific identification of planned expenditures in the operating or capital budgets that are approved by the Board of Trustees does not require separate approval.
Over $3,000,000 - requires approval by the Board of Trustees. Specific identification of planned expenditures in the operating or capital budgets that are approved by the Board of Trustees does not require separate approval.
Use of Bond Proceeds requires approval by the Treasurer/CFO.
Contracts for Services/Equipment Leases consistent with the Institute’s budget plan and objectives and Settlement Agreements:
Up to $10,000 - requires approval by a dean or department head. The dean or department head may delegate this authority to an authorized signer(s) within the school or department. Deans and department heads will submit an authorized signer form to accounts payable annually to define this authority.
Between $10,000 and $50,000 - requires approval by a dean or department head and the Vice President of Facilities or the Associate Vice President of Capital Facilities Planning for Capital expenditures, and the Vice President for Information Technology for technology expenditures, and the Associate Vice President for Finance and Administration/Assistant Treasurer for operating expenditures or the Treasurer/CFO.
$50,001 to $750,000 - requires approval by the President, Provost, Treasurer/CFO, or the Associate Vice President of Finance and Administration/Assistant Treasurer.
$750,001 to $1,500,000 requires approval by both the President and Treasurer/CFO. All transactions must be approved by an authorized person other than the one who initiated the purchase or project. Upon final approval of a transaction at this level, either the President or the Treasurer/CFO will inform the Executive Committee of the transaction(s)
$1,500,001 to $3,000,000 requires approval by the Executive Committee. At the next meeting, the Board of Trustees will be informed of the approval of these transactions. Specific identification of planned expenditures in the operating or capital budgets that are approved by the Board of Trustees does not require separate approval.
Over $3,000,000 - requires approval by the Board of Trustees Specific identification of planned expenditures in the operating or capital budgets that are approved by the Board of Trustees does not require separate approval.
Use of Bond Proceeds requires approval by the Treasurer/CFO.
Contractual Obligations to Provide Goods or Services (new business opportunities), consistent with the Institute’s budget plan and objectives - commitments require review by the CFO/Treasurer. The CFO/Treasurer will submit a recommendation to the President or Provost for final approval and signature. At the next meeting, the Finance Committee will be informed of the execution of these transactions.
Approval Authority for Specific Transactions, consistent with the Institute’s budget plan and objectives:
Borrowing Resolutions:
a. Borrowing resolutions require approval of the Finance Committee or the Executive Committee.
b. Lines of credit require approval of the Finance or the Executive Committee.
c. Letters of credit require approval of the Finance or the Executive Committee.
d. Extensions of approved lines of credit or letters of credit require approval by the President or the Treasurer/CFO.
Any new borrowing will be reported to the Board of Trustees at the next regular meeting.
Banking Relationships (new) - requires approval by the Finance or the Executive Committee.
Banking - new bank accounts require approval by the President or Treasurer/CFO. At the next meeting, the Finance, Investment and Audit Committee will be informed of the execution of these transactions.
Investment Policy and Contracts - The Board of Trustees has delegated the responsibility for investment activity to the Investment Subcommittee of the Finance, Investment and Audit Committee. Please refer to the CalArts’ Investment Portfolio Policy for details.
Retirement Plan Consultants and Service Providers - requires approval by the Finance, Investment and Audit Committee or the Executive Committee.
Audit Services - The full Board of Trustees will select the independent outside audit firm of the Institute, following recommendations from the Finance, Investment and Audit Committee. Once the audit firm has been approved by the Board of Trustees, the Finance, Investment and Audit Committee of the Board will approve the annual audit engagement.
Real Estate Transactions (including acquisitions, sales, leases etc.) - require approval by the Board of Trustees
Compensation - the President’s contract and related compensation decisions require approval of the Executive Committee acting as the Compensation Committee. Compensation for officers of the Institute requires approval by the President.
Payroll Services (new vendor) - requires approval by the Finance, Investment and Audit Committee or the Executive Committee.
Gift Policy - requires approval by the Gift Review Subcommittee of the Board of Trustees.
Retention of Legal Counsel - requires approval by Treasurer/CFO, in-house legal counsel or the President.
Insurance Contracts - requires approval by the President, Treasurer/CFO or the Associate Vice President of Finance and Administration/Assistant Treasurer
Fundraising Campaigns - requires approval by the Board of Trustees.
Trademark - requires approval by the President and the Chair of the board.
Institute Seal - is to be used by either the Board Secretary or Assistant Secretary.
Non-monetary Documents/Contracts - require signature by an officer of the Institute.
Check Signing (refers to any disbursement method, including but not limited to wire transfer and payments via the internet):
Persons holding the following positions will have check signing authority: President, Treasurer/CFO, Provost, Controller, and Associate Vice President of Finance and Administration/Assistant Treasurer.
All disbursements require proper departmental /budget approval and appropriate review by the accounting office based on internal control procedures for the cash disbursements cycle.
Any of the above authorized persons may sign a check up to $5,000. A facsimile or mechanical signature may be used in lieu of a manual signature for checks up to $5,000. Proper approval and review must have been completed prior to the signature of any check.
Changes to this document require approval by the Executive Committee and the Board of Trustees.
Adopted Date: Mar 2012
Revised Date: Sep 2022