Purpose of Publication - Business Management Guide

Note: Throughout this guide, the term Department Head refers to any position that functions as the administrative head of a department or program, including the principal investigator of a grant or contract.

Just as a house needs a strong foundation to remain standing in the best and worst of conditions, a university needs a foundation of well-managed financial operations to remain strong over time. The key organizational unit in the foundation of most universities is the department.

This unit is the cornerstone of the University of Tennessee System, with the department head acting as the key administrator in each department. Along with pursuing actions consistent with the University’s mission and goals, the department head is responsible for managing financial operations such as budgeting departmental funds, maintaining appropriate controls to safeguard assets, and approving expenditures.

The Departmental Business Management Guide has been written especially for you, the department head, to familiarize you with UT’s financial operations and fiscal responsibilities involved in running your department. Throughout this guide, department head refers to any position that functions as the administrative head of a department or program, including the principal investigator of a grant or contract.

Note: The Departmental Business Management Guide presents the minimum requirements in managing your department. Individual campuses and institutes may have procedures that supplement those in this guide.

Policies, Laws, and Regulations Governing the University

The University is governed by numerous policies, laws, and regulations. Because this guide primarily addresses financial practices, the University’s fiscal policies are cited often in the following sections. As a state-supported institution, UT bases its policies on state laws and regulations; on other regulations and restrictions, including those imposed by the federal government, private donors, and outside sponsors of research; and on sound business practices to safeguard University resources.

In addition, individual campuses and institutes may develop procedures to supplement the general University-wide policies. As department head, you must understand how these policies, laws, and regulations affect your decisions and actions.

Your Department and the University System

The statewide University System consists of individual campuses and institutes and a centralized administration located in Knoxville. The campuses are University of Tennessee, Knoxville (UTK), University of Tennessee at Chattanooga (UTC), University of Tennessee Southern (UTS), University of Tennessee at Martin (UTM), and the University of Tennessee Health Science Center (UTHSC). The institutes are the Institute of Agriculture, Institute for Public Service, and Space Institute.

The UT System is administered by a president, with a staff of vice presidents who head the institutes and major functional areas and chancellors who head each campus. Each campus and institute has a chief business officer who oversees its financial operations.

Your Role and Responsibilities as Department Head

With your guidance and knowledge of good business practices, important functions are accomplished at the departmental level, such as financial decision making and compliance with internal and external policies and regulations. As department head, you are not only responsible for overseeing your department’s activities, but you are ultimately accountable for them as well.

Because many of the University’s financial functions are performed by departmental staff, implementing internal controls, or safeguards, is essential to protecting University assets. Therefore, you should ensure that your employees receive adequate training regarding fiscal and human resources policies and procedures.

The University’s financial systems exist to help support activities in your department as you plan and accomplish your goals. The better you understand how these systems work, the more you, your employees, and your department will benefit.

The Departmental Business Management Guide is designed for both new and experienced department heads. You may delegate many of the duties discussed in this guide to an exempt or non-exempt employee, as specified in policy. It is recommended, however, that you periodically perform the delegated duties yourself or verify that your designee is performing the duties as directed. You should occasionally perform functions for which you are accountable, such as reviewing requisitions for proper approvals, reviewing payroll records and items purchased for accuracy, and reconciling the departmental ledgers, etc.

Because the guide generally presents a conceptual overview rather than detailed procedures, you should consult other resources when you have specific questions and should ensure that employees in your department are aware of these resources and how to access them. Many resources are available, including the University’s fiscal and human resources policies, individual campus/institute procedures, your campus/institute business office, and the Treasurer’s Office.

University Policies

University Policy GE0001 describes the process for development, approval, communication, and maintenance of system-wide administrative policies. A Responsible Official is designated for revising, issuing, and maintaining University policies. The Responsible Officials for existing system-wide administrative policies are as follows:

Fiscal Policies: Treasurer
General Policies: Executive Vice President
Human Resources Policies: Vice President for Human Resources
Information Technology Policies: System Chief Information Officer
Research Policies: Vice President for Research, Outreach, and Economic Development
Safety Policies: System Safety Officer

Conflict of Interests

All employees should be knowledgeable of the University’s policies on conflict of interests and be aware of the responsibility to disclose outside interests that may or may not represent such conflicts. (See University Policy GE0002 {formerly FI0125} for details.)

UT’s Financial Operations

The University’s financial operations are highly decentralized, with many accounting, disbursement, and reporting functions residing in individual departments. This decentralization places a great fiduciary responsibility on departmental staff, requiring them to be familiar with University policies and the financial and human resources system, IRIS.

Forms and IRIS Reports Discussed in This Guide

The forms and IRIS reports referenced in this guide are used in activities such as reimbursing travel expenses, prepaying conference fees, and revising the budget. These forms and reports and their uses are discussed in the Appendix.