University of Michigan. Financial Operations.

Formerly the Accounting Office of the University of Michigan.

From the description of Financial Operations (University of Michigan) records, 1890-1976. (University of Michigan). WorldCat record id: 34420962

The financial records of the University have been maintained in a number of different offices. Prior to the Civil War, the Regents authorized two University officers to retain financial records, the Treasurer and the Regent's Secretary. While the lines of authority were indistinct, generally the Treasurer was responsible for the actual collection or disbursement of funds, while the Secretary kept duplicate but more detailed records of transactions which he used to carry out his informal responsibility to serve as auditor and business manager. This basic arrangement was maintained and proved adequate until the twentieth century.

In 1908, however, the laxness of the accounting procedures became apparent when the state attorney general sharply criticized the University for maintaining at least one special petty cash fund which did not appear in the regular University financial records. The criticism, along with other issues, led to the resignation of the Secretary. In 1909 Shirley W. Smith was appointed Secretary to the Regents, and was given a mandate to overhaul the University's accounting procedures and policies.

Smith concluded that proper financial control required the centralization of operations in one office, and began the slow process of making all University fiscal matters flow through either himself or his subordinates. A central purchasing office was created, and the care of the university's physical plant, a major item of expense, was centralized under the Superintendent of Buildings and Grounds. When the University began a massive construction program in 1921, it was determined that all financial transactions regarding the numerous projects were to be processed by the Secretary's office. By the late 1920's all University department accounting records flowed into the Secretary's office. Recognizing the increasing financial responsibilities that their Secretary bore, the Regents in 1927 changed Smith's title to Secretary and Business Manager.

When Alexander Grant Ruthven was appointed University President in 1929, he was determined to reorganize the University's administration along the lines of a private corporation. As part of that reorganization, Smith in 1930 was named Vice-President and Secretary in charge of Business and Finance. Along with the new title, came a new and expanded mandate for Smith and his subordinates. The Treasurer's Office was abolished in 1931. Smith's office became responsible for accounting, purchasing, investments, cash management, buildings and grounds, construction, and services such as printing, stores and housing, all this in addition to the responsibilities incumbent upon the office as Secretary to the Regents.

The day to day financial operations of the unit were controlled by John C. Christensen. Hired by Smith in 1914 with the title Assistant Secretary, Christensen became Controller and Assistant Secretary when Smith was made a Vice-President. Among his many responsibilities, Christensen oversaw four financial units: accounting, purchasing, cashier and investments. The accounting unit was led by the Chief Accountant.

The retirements of Christensen in 1944 and Smith in 1945 led to a restructuring of the positions they had held. Robert P. Briggs, who succeeded Smith as Vice-President, was responsible only for the financial aspects of Smith's position. Herbert G. Watkins, who replaced Christensen, was made responsible for Smith's Secretarial duties and was given the title Secretary to the University. Technically, Watkins still reported to Briggs, but their responsibilities were both distinct and generally unrelated. This fact was recognized by the Regents in 1959 when the Secretary's office was reassigned to report directly to the University President, rather than through the Vice-President for Business and Finance.

In response to the ever expanding volume of operations created by the University's post 1945 growth, the lines of authority running from the Vice-President for Business and Finance became increasingly distinct and departmentalized. The Controllers Office became responsible for overseeing several operations, including that of the Accounting Office. In 1966, a reorganization by the new University Controller, Howard Cottrell, moved the Payroll Office as a unit from under the Chief Accountant. In addition, the sponsored research grant and contract administration function moved into the Accounting Department from the Office of the Assistant Controller and Business Manager for Sponsored Research. The small staff remaining in that office became the Office of Contract Review reporting to an Assistant to the Controller. In 1966 the Vice-President for Business and Finance title was changed to Vice-President and Chief Financial Officer. In subsequent years, the separate accounting systems for the Institute for Social Research, Food Stores, Law Club, and University Hospital were also incorporated into the central systems of the Accounting Department.

During academic year 1980-1981 the Accounting Office's name was changed to Financial Operations. The Chief Accountant's title was changed to Director.

From the guide to the Financial Operations (University of Michigan) records, 1837-1982, (Bentley Historical Library, University of Michigan)