Authorisation levels by maintaining bodies

The resource perspective on fi nancial autonomy on the basis of the regulations that concerned the case study AMKs is considered below. The regulations are reviewed and authorisation levels related to annual budget, procurement, borrowing, leases / contracts, capital programmes, staff appointments and establishment of vacancies are shown in Appendix 6.

1) Case study institution P1

The foundation board and the CEO / rector of the foundation wielded the major fi nancial authority. The budget was prepared and approved in the form of a line-item budget for the entire institution. However, the binding level was the institution i.e.

in the budget implementation; items need not be identical to the specifi cations in the line-item budget. Borrowing and capital programmes were the responsibility of the foundation board. The CEO / rector was authorised to make fi nancial decisions up to the sum of 100,000 Euros. The rector appointed staff and created new positions except for senior management.

2) Case study institution P2

The company board decided on the strategic development of the AMK, budget and fi nancial plans approved target agreements with the Ministry, appointed the CEO / rector, approved signifi cant agreements and capital programmes and decided on bor-rowing. The appointment of staff to existing vacant positions and the creation of new

senior management positions were also decided by the company board. The CEO / rector’s authorised limit for procurement was 80,000 Euros. Procurement decisions for sums above this had to be decided by the company board. Thus, the company board and the CEO / rector of the company had the major fi nancial authority. The AMK board prepared proposals on the budget and fi nancial plan to the company board, decided on internal allocations of appropriations, and decided how to use surpluses in the department of research and development in accordance with the guidance of the company board. The CEO / rector was authorised by the fi nancial regulations to ar-range budget transfers between units or between different operating cost items within units. The AMK board was authorised to create new positions for principal lecturers and senior lecturers.

3) Case study institution M1

Financial authority was divided between the council, the board of management and the rector. The council approved the budget for the entire institution. The board of management was authorised to borrow money within the limits of the budget and it decided on capital programmes. The rector had procurement authority within the agreed budget. S/he also was authorised to make all staff appointments. Offi cial posts within the agreed budget were created by the board of management. The rector was authorised to establish all other vacancies.

4) Case study institution M2

Major fi nancial authority rested with the joint council, the joint board and the fi nancial director of the maintaining organisation. The budget was a line-item budget approved for responsibility centres by the council. Procurement decisions for goods or services under 100,000 Euros were made by the fi nancial director within limits of the budget.

Staff appointments were decided by the maintaining body and the executive rector of the joint local authority. The rector of the AMK was authorised to make staff appointments other than senior management. The creation of new posts was the responsibility of the council. According to the charter of the maintaining body, any budget surplus resulting from the fi nancial year was transferred to the maintaining body’s own capital.

5) Case study institution M3

Financial authority was divided between the council, the board, the committee, the AMK board and the rector. The council approved the budget at the institution level.

Capital programmes were decided by the council. Regarding investments, the maintainer agreement also referred to joint decision-making between the partners. Borrowing was decided by the board of the local authority within the limits of the budget. The

committee, specifi c for this case study institution, appointed senior management staff and established new positions for the AMK. The maintaining body also delegated its authority to the AMK on staff issues.¹⁴ Procurement decisions were the responsibility of the AMK board (for sums over 85,000 Euros) and by the rector (for sums up to 85,000 Euros). Leases and contracts were decided on by the Rector unless otherwise stipulated.

The maintaining agreement defi ned how the maintaining body allocates unit price funds between the operating units of the AMK. Possible budget surpluses or losses were transferred to the unit’s funds at the end of the fi scal year.

The operating units had the right to divert income other than unit price funds for their own purposes. In addition, it is stated in the maintaining agreement that the maintaining partners can allocate additional funds to operating units to cover costs that exceed the unit price. However, there were detailed instructions for the use of the funds in the maintaining agreement.

6) Case study institution M4

Financial authority was divided between the council, the board, the AMK board and the rector. The council approved the budget at the level of the AMK’s responsibility centres and decided on borrowing and capital programmes. The AMK board decided on the AMK’s purchases over 50,000 Euros. All new AMK positions were created by the AMK board within an agreed budget. The rector’s procurement authority was limited to 50,000 Euros. The AMK board appointed senior management staff and the rector appointed all other staff.

The funding agreement (M4) between the maintaining body and the regional partners ensured funding in case of negative operative outputs and outcomes.

The purpose of the funding agreement was to specify how the maintaining body and its other partners cover AMK operating costs in situations where those costs could be covered by unit price funding. The maintaining body prepared cost calculations after each fi nancial year. The partners shared the uncovered operating costs of the institution in proportion to their student numbers. In addition, the funding agreement required that the partners rent facilities for the AMK.

14. The AMK, in addition to the tasks prescribed in the legislation has the right unless otherwise prescribed, defi ned or determined: 1. to decide on the employment and dismissal of employ-ees, to allow resignations to the extent that such authority is not vested in other organs; 2.

to determine the conditions upon which personal are employed, likewise salaries and other personnel matters; 3. to determine matters of fi nances and general administration. Executive power in these matters has been transferred to the AMK from the maintaining body (Local Government Act 365/1995).

15. Possible budget losses or surpluses are as such transferred to the operating unit to increase or decrease its appropriation. If there is a budget loss and the unit is not able to cover it with the funds, the unit has to make a proposal to the Board on how it will cover the loss. The proposal has to be made right after the preparation of the fi nancial statements and before opening the books for the next accounting period.