Session 10: Delegations of Authority
Presented by:
• Andrew Cooke
PricewaterhouseCoopers
whatwouldyouliketogrow.com.au
Delegations of Authority
ANZUIAG Conference
2010
What would you like to grow?
Setting the scene
GFC
Growth through better business decisions
Risk culture
Empowerment of staff
Cut through the red tape
Make people more accountable
PwC
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What would you like to grow?
Agenda
Delegation of Authority
What benefits can it bring
A delegation decision model
What are some common problems
Key insights
The USQ experience
Questions
PwC
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What would you like to grow?
Delegation of Authority
• Authority to make business
decision
Successful organisations exhibit characteristics of
structural clarity through formal and informal accountabilities
Informational accountabilities
(Underpinned by leadership style,
culture, trust, operating principle/values etc)
• Support accountability and
governance
Formal accountabilities
• Responsibility / accountability /
authority
Assigned to expertise
with ability to act
Congruent across
multiple dimensions
• Forms the basis of your
decision escalation process
Open and robust
communication
Constant learning and
educating from failure
• Single source of truth or
guiding principles
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Clearly defined
and documented
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What would you like to grow?
What benefits can it bring
• Empowers employees
• Provides or builds on your internal structure
• Protects your assets from undue risks or liabilities
• Provides alignment of resources to decision making
• Embeds risk appetite and tolerance throughout your
organisation
• Provides greater clarity on what is truly important to your
organisation
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What would you like to grow?
A delegation decision model
Descriptor
Term
Definition
A
Accountable
Person or role who is ultimately
accountable for the decision, who owns
the outcome from the decision.
An Accountable must signoff (Approve)
on work that a Responsible provides
R
Responsible
Person or role responsible for ensuring
that an item is completed / a decision is
made. There is typically one role with a
participation type of Responsible
I
Informed
Person or role that needs to kept
informed of the status of the decision
making process – usually one way
communication on completion
C
Consulted
Person or role whose subject matter
expertise, knowledge, information or
other input is required in order to make
the decision
Key
decisions
Decision models
Governance
structures
Governance
processes
Policies
and
standards
Processes and procedure
Organisation structure
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Job description
Skills and competencies
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What would you like to grow?
What are some common problems
• Complexity of DoA and business processes
• Misalignment of DoA and business processes
• DoA not aligned with organisational structure / decision making
• Ineffective decision making structures
• Lack of staff awareness and inappropriate training
• Failure to enforce (e.g. code of conduct breach)
• Poorly managed when staff in temporary roles
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What would you like to grow?
Key insights
Guiding Principle vs Single Source of Truth
• Guiding Principle – high trust environment where levels of
delegation are linked to accountabilities, tend to set parameters
and are less prescriptive than a ‘single source of truth’3
• Single Source of Truth – the DoA is a single (central)
prescriptive document for decision making and operational
action
• Areas typically cover
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-
Budgeted vs non-budgeted
-
Capital and operating expenditure
-
HR
-
Pricing
-
Contracts and supplier arrangements
-
Marketing
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What would you like to grow?
Key insights
Guiding Principles
Single Source of
Truth
Length and structure
Single overarching
policy, 10 – 25 pages
in length, more
descriptive than
numbers and tables
Central repository
linked to board and
sub-delegation,
highly detailed can
exceed 100 pages.
Hierarchy
System of levels,
stratums supported
by decision analysis
Solely based on role
or position
Ownership
Finance or risk
Finance or HR
Other observation
More prescriptive
information in other
policies
DoA tends to have
necessary detail and
is the primary tool
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What would you like to grow?
The USQ experience
Strategy
Selection
Key
decisions
Risk /
Fraud
RACI
Model
Decision models
IT
Council
and Mgt
Cmttee’s
Governance
structures
ORMP Budget
Governance
processes
Policies
and
standards
Facilities
Code of
Conduct
Processes and procedure
Access
System
workflow
Organisation structure
Align for
reportin
g
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Job description
Contract
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Skills and competencies
Perf
System
What would you like to grow?
The USQ experience
Type
Limit
Position
Comments
g
USQ: $5,000,000
Unlimited
h
Others: Unlimited
Vice Chancellor
$0
Deputy Vice Chancellor
$0
Deans of Faculties
$0
g
USQ: $100,000
h h
Others: $200,000 - $250,000
Unlimited
Chief Financial Officer
$0
g
USQ: $100,000
h
Others: $250,000
Unlimited
h
Others: Unlimited
Chief Operating Officer
$0
Directors
$0
g
USQ: $40,000
Managers
$0
h g
USQ: $40,000
Vice Chancellor
$0
Chief Operating Officer
$0
h
Others: $100,000
Executive/Group Manager
$0
h g
USQ: $100,000
Managers
$0
g
USQ: $250,000
Expenditure
h
Others: $500,000
Unlimited
h
Others: Unlimited
Others: $100,000
h
Others: $100,000
h g
USQ: $250,000
h
Others: $500,000
Unlimited
Others: $200,000
h h
Others: $100,000
Unlimited Unlimited expenditure limits relate to
h
appropriate cohort directors only
Others: Unlimited
Others: $50,000
Others: $20,000
Capex
h
Unlimited Expenditure limits dependant on
appropriateness of manager.
Others: $50,000
g
USQ: $5,000,000
h g
USQ: $250,000
h
Others: $500,000
Unlimited
h
Others: Unlimited
Unlimited
Others: $200,000
h
Others: $200,000
Others: $50,000
h g
USQ: $40,000
Others: $20,000
PwC
h
Unlimited Half of universites under analysis did
not delegate authority to Managers
for Capex
Unlimited Half of universites under analysis did
not delegate authority to Managers
for Capex
Others: $50,000
12
What would you like to grow?
The USQ experience
Type
Limit
Position
Comments
g
USQ: $5,000,000
Vice Chancellor
$0
Deputy Vice Chancellor
$0
g
USQ: $250,000
h
Others: $500,000
Chief Operating Officer
$0
h g
USQ:$250,000
h
Others: $500,000
Contracts
Unlimited Generally included in regular
h
expenditure delegations
Others: Unlimited
Unlimited Unlimited expenditure limits relate to
h
appropriate cohorts only
Others: Unlimited
Unlimited Generally included in regular
expenditure delegations
Others: $200,000
Group Manager
$0 g h
USQ: $15,000
Directors
$0 g h
USQ: $15,000
h
Others: $50,000
Unlimited Unlimited expenditure limits relate to
h
appropriate cohorts only
Others: Unlimited
h
Others: $50,000
Unlimited Unlimited expenditure limits relate to
h
appropriate cohorts only
Others: Unlimited
Others: $20,000
Others: $20,000
Managers
$0
Vice Chancellor
$0
Chief Operating Officer
$0
Orders
h
Others: $20,000
g
USQ: $50,000
Unlimited
Others: $50,000
g
USQ: $6,000,000
h
Unlimited
Others: Unlimited
Investments, Salaries,
Leases, Overheads Chief Financial Officer
h
Others: $100,000
h
Others: $250,000
$0
Directors/Group Managers
$0
Chief Financial Officer
$0
Directors
$0
h h
Others: $100,000
Unlimited Other University delegations relate to
Board & Office Directors
g
USQ: $6,000,000
Unlimited
g
USQ: $6,000,000
Others: $50,000
General Journals
g
USQ: $6,000,000
h
Unlimited Unlimited expenditure limit is w ithin
select group only
Others: Unlimited
g
USQ: Unlimited
Unlimited Generally included in regular
expenditure limits
Others: Unlimited
g
USQ: Unlimited
Unlimited Generally included in regular
expenditure limits
Others: Unlimited
PwC
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What would you like to grow?
The USQ experience
Type
Limit
Position
General Journals
Comments
Unlimited Generally included in regular
g
expenditure limits
USQ: Unlimited
Chief Financial Officer
$0
Directors
$0
Chief Financial Officer
$0 g
USQ: $5,000
h
Others: $100,000
Unlimited Tw o signatories required in all
circumstances for all universities
under analysis
Directors (Finance)
$0 g
USQ: $5,000
h
Others: $100,000
Unlimited Tw o signatories required in all
circumstances for all universities
under analysis
Vice Chancellor
$0
h
Others: $25,000
g
USQ: $5,000,000
Unlimited Large w rite-offs generally chanelled
h
through Vice Chancellor
Others: Unlimited
Chief Operating Officer
$0 h h
Others: $20,000
g
USQ: $5,000,000
Unlimited Write-offs split into categories. Large
w rite-offs chanelled through Vice
Chancellor
g
USQ: $5,000,000
Unlimited Write-offs split into categories. Large
w rite-offs chanelled through Vice
Chancellor
Others: Unlimited
Unlimited Generally included in regular
g
expenditure limits
USQ: Unlimited
Others: Unlimited
Cheques
Others: $5,000
Write-offs
Chief Financial Officer
Executive Director
$0
h
Others: $25,000
$0 h
Others: $5,000
h
Others: $50,000
g h
USQ: $50,000
Unlimited Write-offs split into categories. Large
w rite-offs chanelled through Vice
Chancellor. No authority given to
directors at some universities.
Others: $100,000
Purchasing Card
Chief Financial Officer
$0
h
Others: $100,000
h
Others: $250,000
g
USQ: $6,000,000
h
Unlimited Generally included in regular
expenditure limits
Others: Unlimited
PwC
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What would you like to grow?
Questions
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to PricewaterhouseCoopers, which is a member firm of PricewaterhouseCoopers
International Limited, each member firm of which is a separate legal entity
What would you like to grow?