Liberty University Signature Authority Policy
Board of Trustees (the “Board”) of Liberty University (the “University”).
The President and Chief Financial Officer of the University, and the Executive Committee and the Budget and Finance Committee of the Board, together with all members of the University Community.
The Board powers of the University are exercised by or under the authority of, and the business and affairs of the University are managed under the direction of the Board of Trustees. The President is the chief executive officer of the University and, subject to limitations as may be imposed by the Bylaws of the University or the Board, is vested with all authority, powers, duties, and responsibilities incident to the management and control of the University and its properties in furtherance of the University’s interests, including the authority to execute bonds, mortgages and other contracts in the name of and under the seal of the University. The Chief Financial Officer of the University is also authorized to execute contracts in the name and on behalf of the University, subject to such limits as may be established from time to time by the Board.
This Policy establishes and clarifies appropriate limitations on the authority of the President and Chief Financial Officer to enter into contracts and agreements between the University and third parties and to take certain other actions, and identifies certain matters the Board has reserved exclusively to itself.
In adopting this Policy, the Board recognizes the importance of safeguarding University resources and the obligation of the Board and the University’s officers to be responsible stewards of those resources, including through establishing robust financial controls.
General Reservation of Authority for Significant Transactions
The Board reserves the authority to approve any commercial transaction or matter or any legal settlement not otherwise subject to Board approval if:
- the transaction or matter has the potential for significant negative impact on the University mission or reputation;
- it binds the University for a multi-year period greater than 5 years, except in the case of a commercial real estate lease, in this case the Board reserves authority when the commercial real estate lease is binding for greater than 20 years; or
- it will likely lead to a material violation of the University’s compliance with existing debt covenants or agreements with a financial institution.
Budgetary and Financial Matters
The Board reserves the authority to approve the annual operating and capital budgets, taking into account the recommendation of the Budget and Finance Committee. In addition, the Board reserves the authority to approve the following budgetary and financial matters:
- Cumulative changes to the University’s operating budget of greater than 5% of operating expenses.
- Cumulative changes to the University’s capital budget of greater than 5%.
- Issuance or retirement of bonds, credit agreements, and similar instruments representing material indebtedness for borrowed money.
- Individual purchase of goods or services with a single value greater than $5,000,000 or successive purchases from the same vendor with a cumulative value greater than $5,000,000 in any one fiscal year, provided that contracts with a value below $10,000,000 do not require separate Board approval to the extent their value was included in the University’s Board approved operating budget (either directly or in the workpapers supporting the budget). However, Board approval for any such contracts is not required for contract renewals or extensions where the existing contract was Board approved within the last seven years, where the renewal or extension was competitively bid and the related expenditures were included in the University’s Board approved operating budget (either directly or in the workpapers supporting the budget).
- All contracts involving the sale or purchase of real property (i.e., land and any buildings and other improvements attached to the land) held or used for educational or development purposes and capital projects, in each case with a value greater than $1,000,000, provided that if the amounts were included in a Board approved capital budget (either directly or in the workpapers supporting the budget), then Board approval may be replaced by approval of the Budget and Finance Committee, which in its discretion may seek the recommendation of the Facilities and Campus Development Committee prior to approval.
- All contracts involving the sale or purchase of real property for investment purposes.
The President and Chief Financial Officer may authorize contracts with third parties that are not specifically reserved to the Board pursuant to this Policy or otherwise (e.g., Bylaw provisions with respect to compensation arrangements), provided that such officers comply with the following:
- Regardless of whether the contracts are consistent with the University budgets, the Budget and Finance Committee must review and approve, prior to signing, any contractual arrangements or individual purchase of good or services with a value greater than $5,000,000, or successive purchase from the same vendor with a cumulative value greater than $10,000,000, unless such contracts are renewals or extensions of an existing contract that was Board approved within the last seven years, where the renewal or extension was competitively bid and the related expenditures were included in the University’s Board approved operating budget (either directly or in the workpapers supporting the budget).
- Regardless of whether the contracts are consistent with the University budgets, the President must review and approve, prior to signing, any contractual arrangements or individual purchase of good or services with a value greater than $1,000,000, or successive purchase from the same vendor with a cumulative value greater than $1,000,000.
- Regardless of whether the contracts are consistent with the University budgets, both the President and the Chief Financial Officer must review and approve, prior to signing, any contractual arrangements or individual purchase of good or services with a value greater than $2,000,000, or successive purchase from the same vendor with a cumulative value greater than $2,000,000.
- Authorizations are consistent with written procurement policies, as further described below under “Adoption of Policies.”
- Authorizations are consistent with other policies adopted by the Board, including, but not limited to, policies on conflicts of interest.
Investment Committee Matters
Each of the President and Chief Financial Officer have the authority to approve written arrangements, in consultation with the Chief Investment Officer, for the purchase and sale of investment securities (i.e., excluding hard assets) in accordance with the Board approved Investment Policy Statement and subject to the oversight of the Investment Committee without regard to any specific dollar limitations set forth in this Policy.
The Board reserves the authority to approve the naming, re-naming or de-naming of buildings or significant University infrastructure, such as sporting arenas, streets, landscape, places, walks and courtyards. This reservation does not apply to naming decisions for small space interior donor recognitions, employee/student recognition or memorials involving individual rooms, hallways, pieces of equipment and the like that are parts of a building or sports complex.
Executive Committee Actions
During the intervals between Board meetings, the Executive Committee is authorized by the University’s Articles of Incorporation and Bylaws (subject to the limitations set forth therein) to have the full and complete management and control of the University and its affairs, and on behalf of the University to undertake, authorize and empower all acts that the University may lawfully do. The Executive Committee may therefore act in the place of the full Board under this Policy where in the judgment of the Executive Committee it is appropriate to do so without full Board action. Notwithstanding the foregoing, the Executive Committee shall not approve operating or capital budget variances in excess of 10% of the Board approved budget or authorize any actions reserved for the Board set forth under General Reservation of Authority.
Adoption of Policies
The President and Chief Financial Officer are authorized by the Board to delegate their individual authority to approve and enter into contracts, provided that the delegations are in writing (including pursuant to a written policy), define the scope of the authority and are recorded in the records of the University. In furtherance of that authorization and consistent with the University’s expectation of robust internal controls, the President, in coordination with the Chief Financial Officer and the Chief Procurement Officer, is directed to cause the University, including its subsidiaries and affiliates, to adopt or update written procurement and signature authority policies (e.g., Contracts Policies and Procedures, Purchase Process Policy Procedures and Budget Policy Manual) no later than March 8, 2022. These policies should be presented to the Budget and Finance Committee for review within 10 months of any material enactment or change and no less frequently than every three years.
The Board, President and Chief Financial Officer are responsible for safeguarding University resources and to act as stewards of those resources. University officers and employees and third parties should have a clear understanding of the situations when the University is authorized to enter into contractual arrangements.
Violation of this Policy, or policies adopted pursuant to and in accordance this Policy, by any Senior Officer shall be reported to the Chairman of the Audit Committee by the President, Chief Financial Officer or Internal Auditor within fifteen days of discovery of the violation, and the Chairman of the Audit Committee will subsequently inform the full Audit Committee. For purposes of the prior sentence, Senior Officers include the President, Chancellor of Spiritual Affairs, Chief Operating Officer, General Counsel, Chief Financial Officer, Chief Investment Officer, Provost, Secretary, Assistant Secretary, Executive Vice Presidents, Senior Vice Presidents, any other Vice President employed by the University, the Director of Athletics, the President of Freedom Aviation, Inc., and any other officers or employees of the University or its subsidiaries as the President or the Board of Trustees may, from time to time, determine.
University employees who have questions about the application of this Policy to a particular situation should seek advice from the Chief Financial Officer or General Counsel. Nothing in this Policy is intended to limit the application of any other Policy of the University. Questions about the interactions of multiple policies should be directed to the General Counsel.
University employees, students and others are not authorized to enter into contracts in the name and on behalf of the University that are not consistent with this Policy. Violation of this Policy can lead to administrative action, up to and including termination.
Adopted as of April 16, 2021
Revised as of November 5, 2021
Revised as of August , 2022