What is DelegationMatrix ?
DelegationMatrix is an application to enforce a financial delegation of authority framework. A financial delegation of authority framework establishes who is empowered to make decisions and to take action on behalf of the organisation. Typical examples of activities that would rely on delegated authority are signing contracts and approving capital or operational expenditure.
The DelegationMatrix clarifies who has the responsibility to make decisions, commit expenditure and sign legal undertakings, so there is no confusion about responsibility.
The DelegationMatrix is usually approved at the highest level of an organisation – by the Board. All delegates working in an organisation need to understand the delegated authority rules.
Who needs a DelegationMatrix ?
DelegationMatrix cascades through an entire organisation, from the Board to the executive team; from the executive team to senior managers; and from senior managers to the teams they manage.
The responsibility for day-to-day financial management tasks is delegated down through the line management structure. At the same time, the accountability process moves back up through the hierarchical structure as people report back on progress.
The Board is ultimately accountable in law for the financial management of an organisation. Everyone in an organisation operates within the rules set by their level of delegated authority.
How does DelegationMatrix work ?
Authorised delegation limits are assigned to delegates.
These limits are continuously monitored, tracked and reported to ensure compliance with the DelegationMatrix.
Delegates and their teams should be familiar with the rules of the DelegationMatrix because they impact every financial and legal transaction related to an organisation. Everyone in a team needs to understand the limits that each of their roles is given for authorising financial transactions and commitments. The DelegationMatrix usually covers all situations we find in normal operations.
Why do you need a DelegationMatrix ?
Done well, a good DelegationMatrix should:
- empower delegates to perform at their best by eliminating confusion about what delegations actually exist so that delegates and everyone who deals with them know the extent of their authority;
- allow only as much discretion as is needed to perform the delegated responsibilities;
- attach accountability controls to delegated authority;
- include a review mechanism to check the use of the delegated authority over time; while
- maximising productivity and improving risk management at an organisational level.
Can you answer these questions ?
- Does your organisation have a DelegationMatrix?
- Can your DelegationMatrix prevent an employee using delegated authority to make a decision for corrupt purposes?
- Does your organisation have policy and procedures covering the use of a DelegationMatrix?
- Does your organisation periodically review the DelegationMatrix policy?
- Does your organisation train all employees on the use of the DelegationMatrix?
- Does your DelegationMatrix include a requirement for records to be kept of all decisions taken under delegated authority?
- Is your DelegationMatrix clear about what delegations actually exist so that delegates and everyone who deals with them know the extent of their authority?
- How easy is it to maintain your DelegationMatrix?
- How often do you report on your DelegationMatrix?
- Does your DelegationMatrix contain alerts?
- How is your DelegationMatrix distributed?
- Do your managers know how much they are allowed to approve?
- Do your managers know how much they have approved?
- Do your managers know how much approval head-room they have?
If you have difficulty in answering any of these questions then ……….