FINANCIAL POLICIES AND PROCEDURES...FINANCIAL POLICIES AND PROCEDURES Module: Authorization Policy Issue Date: 02/02/10 Page: 1 authorization_policy.doc Table of Contents TABLE OF

FINANCIAL POLICIES AND PROCEDURES

Module: Authorization Policy Issue Date: 02/02/10 Page: 1

authorization_policy.doc

Table of Contents

TABLE OF CONTENTS ............................................................................................................................................1

OVERVIEW ................................................................................................................................................................3 PURPOSE....................................................................................................................................................................3 PRIOR PRACTICES REPLACED .....................................................................................................................................3 APPLICABILITY ..........................................................................................................................................................3 QUESTIONS ................................................................................................................................................................3

GENERAL ...................................................................................................................................................................4 PURPOSE....................................................................................................................................................................4 AUTHORIZATION POLICY ...........................................................................................................................................4 BASIS OF AUTHORITY.................................................................................................................................................4 DELEGATION .............................................................................................................................................................4 MANUAL APPROVAL ..................................................................................................................................................4 SEPARATING EXPENSES PROHIBITED ..........................................................................................................................4 BALANCE SHEET AND REVENUE GENERAL LEDGER ACCOUNTS ..................................................................................5 CONFLICT OF INTEREST..............................................................................................................................................5 WIRE TRANSFERS ......................................................................................................................................................6

RESPONSIBILITY AND ENFORCEMENT ...........................................................................................................7 POLICY RESPONSIBILITY ............................................................................................................................................7 AUTHORIZATION RESPONSIBILITY .............................................................................................................................7 COST CENTER OWNER RESPONSIBILITY ......................................................................................................................7 ENFORCEMENT ..........................................................................................................................................................7 NON-COMPLIANCE.....................................................................................................................................................7

AUTHORIZATION LEVELS AND MONETARY LIMITS..................................................................................8 PURPOSE....................................................................................................................................................................8 AUTHORIZATION LEVELS AND MONETARY LIMITS .....................................................................................................8 LEVELS 6 - 9 ..............................................................................................................................................................9 LEVELS 4 AND 5.......................................................................................................................................................11 LEVELS 1 - 3 ............................................................................................................................................................11 TEMPORARY ASSIGNMENTS .....................................................................................................................................12 MONETARY LIMIT EXCEPTIONS................................................................................................................................12

AUTHORIZATION FORM .....................................................................................................................................16 AUTHORIZED SIGNATURE FORM ..............................................................................................................................16 PROCESS FOR INITIAL ASSIGNMENT OF AUTHORIZATION..........................................................................................16 PROCESS FOR EMPLOYEES WITH EXISTING PROFILE..................................................................................................17

OPERATING EXPENSES .......................................................................................................................................18 PURPOSE..................................................................................................................................................................18 PURCHASING POLICY ...............................................................................................................................................18 AUTHORIZATION LIMITS ..........................................................................................................................................20 CAPITAL EXPENDITURES ..........................................................................................................................................20 NON-PO EXPENDITURES ..........................................................................................................................................20




INVOICE APPROVAL .................................................................................................................................................20 CONTRACTS............................................................................................................................................................21

PURPOSE..................................................................................................................................................................21 POLICY ....................................................................................................................................................................21 POLICY DETAILS......................................................................................................................................................21

ACCOUNTING .........................................................................................................................................................22 PURPOSE..................................................................................................................................................................22 GENERAL LEDGER JOURNAL ENTRY TYPES...............................................................................................................22 RECURRING ENTRIES................................................................................................................................................23 NON- RECURRING ENTRIES ......................................................................................................................................24

OTHER EXPENSES.................................................................................................................................................25 PURPOSE..................................................................................................................................................................25 EXPENSE REPORTS ...................................................................................................................................................25 PROCUREMENT CARD PURCHASES ...........................................................................................................................25 COMPANY CONTRIBUTIONS......................................................................................................................................26 DISPOSAL OF PLANT ASSETS ....................................................................................................................................26 LEGAL SETTLEMENTS ..............................................................................................................................................27




Overview

Purpose The purpose of this document is to establish policies for all Frontier

companies including Mohave Cellular for authorization of business-related operating expenses and other commitments of company funds. These policies are intended to ensure all employees have a clear and consistent understanding of guidelines for making financial agreements on behalf of the company and the correct level of authorization for such.

Prior practices replaced

This policy replaces any previous authorization policies and procedures issued by any Frontier Communications, Frontier, Electric Lightwave or Mohave Cellular.

Applicability This policy is applicable to all employees of:

• Frontier • Mohave Cellular.

Questions Any questions or concerns regarding this authorization policy and procedures

should be addressed to Rosanne Szymanski, Manager Accounts Payable 570-631-6232.




General

Purpose The purpose of this section is to define the general policy, basis and

responsibility for authorizing commitment of company funds by Frontier employees.

Authorization policy

It is the policy of Frontier that all expenditures of company funds will have the appropriate level of authorization prior to commitment of resources. There will be no distinction between budgeted and non-budgeted expenses. The cost center owner is accountable for the final approved budget number from Senior Management. NOTE: Cost center owners are authorization levels 4 (Directors-career band

E) and 5 (Vice Presidents-career band F).

Basis of authority

Monetary authorization levels for Frontier employees are assigned based on career bands and job responsibilities.

Delegation It is Frontier’s policy that, when authority responsibilities must be delegated,

delegation of authority must be made upward.

Manual approval

When approving a source document manually, the employee must indicate approval by signing appropriate source document with at least, his or her first initial and last name. The approver must also print his or her name below the written signature.

Separating expenses prohibited

Employees are prohibited from separating expenses in order to circumvent the authorization process. This will be considered non-compliance with this policy and the non-compliance clause will be invoked, which states that non-compliance may result in employee disciplinary action up to and including termination.

Continued on next page




General, Continued

Balance sheet and revenue general ledger accounts

Balance sheet and revenue general ledger accounts are not listed in RAP, but expenditures to these accounts require the same approval levels as in place for expenses as noted on pages 7-11.

Conflict of interest

An “interest” arises when an employee, any person(s) residing in an employee’s household or a member of an employee’s family is an owner, partner, director, officer, or employee of an enterprise doing business with Frontier. A Frontier employee should avoid having any business, financial, or other relationship with suppliers that might impair or even appear to impair the independence of any decision made on behalf of Frontier. If a situation should arise in which a business relationship between Frontier and an enterprise may constitute a conflict of interest or may be questionable, the following steps must be taken: • Business relationship must comply with Frontier’s code of Ethics and

Business Conduct. • Frontier employee having interest in a supplier will be responsible for

notifying the Chief Financial Officer and Vice President of the cost center of their interest in supplier and proposed transition with Frontier.

• Chief Financial Officer will be responsible for evaluation of proposed business relation to ensure arms length transaction and to determine that business relationship brings best value to Frontier.

• Approval must be obtained from Vice President of the cost center and Chief Financial Officer before business transaction is allowed to proceed.





General, Continued

Wire Transfers No additional approval from Don Shassian (EVP & Chief Financial Officer)

is required for recurring wire transfers regardless of dollar amount. All non-recurring wire transfer requests, not listed, greater than $100,000 require approval from Don Shassian before transaction can be completed. The Authorization Policy and RAP should be followed for proper approval otherwise. Recurring, as noted: • Insurances (Aetna, Anthem, CIGNA, Excellus, Marsh, MVP, Preferred

Care, Prudential, Sentry/Lockton, United Concordia) • Interest Payments • PARS & Settlements • Union Dues • 401k • Flex Spending • Legal Fees • Postage • Relay Surcharges • Private Jet • Door to Door Sales • Kiosk Management Fees • Regulatory (State of Nebraska) • Targeted Accessibility Fund • Split Dollar Life Insurance • Citibank (fleet and one card)




Responsibility and Enforcement

Policy responsibility

This policy is issued and maintained by the Chief Financial Officer of Frontier Communications, who is responsible for its interpretation and revision.

Authorization responsibility

It is the responsibility of the employee approving the expenditure to ensure he or she has appropriate level of authorization.

Cost center owner responsibility

Each cost center owner is responsible for determining authorization privileges granted to employees under that cost center, if any, and approving the Authorized Signature form for the appropriate level of authorization based on the employee’s job responsibilities. If an employee’s profile already exists in the Authorized Signature Database (RAP) an email notification to corporate accounting by the cost center owner is acceptable. The email should indicate the cost center and appropriate level of authorization to be assigned to the employee. NOTE: A copy of the Authorized Signature form can be found on the

Budgets and Reporting web site http://home.fcinternal.net/budgets_and_reporting/applications/documentlibrary/authform.xls.

Enforcement Purchasing, Accounting, and Internal Audit departments are responsible for

reviewing transactions for compliance with this policy.

Non-compliance

Non-compliance may result in employee disciplinary action up to and including termination.

http://home.fcinternal.net/budgets_and_reporting/applications/documentlibrary/authform.xls

http://home.fcinternal.net/budgets_and_reporting/applications/documentlibrary/authform.xls




Authorization Levels and Monetary Limits

Purpose The purpose of this section is to provide an explanation of authorization

levels, authorization (monetary) limits, and process for approval of authorization privileges.

Authorization levels and monetary limits

There are nine levels of authority set by this policy.





Authorization Levels and Monetary Limits, Continued

Levels 6 - 9 These levels of authorization for any expenditure is limited to:

Career Band: G, H Process Managed by: Corporate Accounting Monetary limit: • Level 9 – over $5,000,000 Maggie Wilderotter, Chairman, President and Chief Executive Officer Authority at this level is not cost center restricted and is valid for all accounting strings. NOTE: Dual signature is required for amounts in excess of $250k by another authorized signer to the Cost Center/Operating Area as noted in RAP. • Level 8 – up to $5,000,000 Donald Shassian, EVP & Chief Financial Officer Authority at this level is not cost center restricted and is valid for all accounting strings. NOTE: Dual signature is required for amounts in excess of $250k by another

Authorized signer who has authority to the Cost Center/Operating Area as reflected in RAP. In the event that Don Shassian is the only Authorized signer to a Cost Center/Operating Area combination, Maggie Wilderotter must be the second signer.






Levels 6 - 9 (continued) • Level 7 – up to $1,000,000

Daniel McCarthy, Executive Vice President and COO NOTE: Dual signature is required for amounts in excess of $250k by another Authorized signer who has authority to the Cost Center/Operating Area as noted in RAP. In the event that there is only one Authorized signer to a Cost Center/Operating Area combination, Donald Shassian must be one of the signers. • Level 6 –up to $500,000 Cecilia K. McKenney, EVP, HR & Call Center Sales & Service Pete Hayes, Executive Vice President – Sales, Marketing & Business Development Hilary Glassman, Senior Vice President - General Counsel & Secretary Melinda White, Executive Vice President, General Manager, New Business

Operations

NOTE: Amounts in excess of $250,000 by another Authorized signer who has authority to the Cost Center/Operating Area as reflected in RAP. For Cost Center/Operating Areas that have only one Authorized signer, the second signature must be Donald Shassian’s.






Levels 4 and 5 These levels of authorization are limited to cost center owners:

• Cost Center Director (Level 4), and • Cost Center Vice President (Level 5), and • Cost Center Sr. Vice President (Level 5). ). See exceptions noted under

Levels 6-9. Career Band: E, F, G Process Managed by: Corporate Accounting Monetary limit: • Level 5, Lynda Willis, AVP Procurement – up to $250,000 • Level 4 - up to $100,000

Levels 1 - 3 Cost center owners (Levels 4 and 5) can assign levels 1-3 to the Career Band

D employee based on the individual’s job responsibilities. Career Band: D Delegation of authority must be made upward. Authorization or Assignment by: These levels are optional to cost center owners. Process Managed by: Cost center owners and Corporate Accounting Monetary limit: • Level 3 – up to $50,000 • Level 2 – up to $10,000 • Level 1 - up to $ 2,500






Temporary assignments

Donald Shassian (Chief Financial Officer) must approve temporary assignment of signing authority.

Monetary limit exceptions

This table provides monetary limit exceptions.

Type of Expenditure Exception

Benefit Carrier Payments

Over $500,000 requires approval from Don Shassian (EVP & Chief Financial Officer) or Dan McCarthy (EVP & Chief Operating Officer).

Board approved requests for payment

The minutes from board meeting must be submitted with request for payment as appropriate documentation to note board’s approval. In addition, one signature of an Executive officer (level 6) must be provided.

Cell phones and pagers Debbie Hampel (Travel Manager) is authorized signature up to $50,000 and Lynda Willis (AVP Procurement) for $250,000 on cell phone and pagers that cross multiple cost center owners' accounts.

Cost of access payments Joseph DeMasi, Director, Regulatory, or Kathy Caminiti, VP Corporate Accounting are authorized approvers for COA payments. Individual Cost of Access invoice approval levels are contained within the COA system and administered by the COA Accounting Manager of the Corporate Accounting Group.

Customer refunds Customer refunds up to $199 can be approved by Kelly Morgan, Director, Business Operations. Customer refunds over $199 can be approved by Cecilia McKinney, EVP, HR & Call Center Sales & Service. Rick Burson, SVP Customer Operations, can approve collections and remittance processing refunds. West Region Customer Credit Balance Refund Requests can be approved by Chris Camarena, Mgr Regional Sales






Monetary limit exceptions (continued)

Type of Expenditure Exception ESPN 360 payments Chris Rittler, VP Business Development can sign

for up to $100,000 and Pete Hayes, EVP Sales, Marketing and Business Development can sign up to $250,000.

Direct Sales, Carrier Sales & Agent Commissions

R. Perley McBride, VP, Financial Planning and Analysis is the authorized approver for commission submissions.

DSL Purchases and Ancillary Equipment (Power cords, collateral CPI fulfillment charges, Suttle filters, and Siemens modems

Lynda Willis (AVP Procurement) is authorized up to $500,000. Over $500,000 also requires approval from Don Shassian (EVP & Chief Financial Officer).

PARS & Settlements Virginia O'Hanlon, Manager Accounting, can sign up to $50,000, Karen Passaro, Director, Accounting can sign up to $100,000. Kalindi Bhatt VP, Corporate Accounting up to $250,000. Rob Larson up to $500,000. Don Shassian up to $5,000,000..

Payroll taxes and deductions

Gabrielle DiGregorio (Senior Manager, Payroll Administration) may approve up to $1,000,000. Rob Larson, SVP & Chief Accounting Officer must approve after $1,000,000.

Pay station Commissions

VP of Field Operations can approve for their assigned territory. Commission payments that cross multiple territories must be approved by the respective Regional Vice President.

ProCard payments to Bank of America, Citibank payments for fleet and one card

Gabrielle DiGregorio (Sr. Manager, Payroll Administration) is authorized to approve payments to Bank of America for ProCard expenses and Citibank for fleet and one card payments.

Freight Ed Smith, Manager, Fleet & Network Material Services, can approve up to $10,000. Lynda Willis, AVP Procurement, can approve over $10,000.







Type of Expenditure Exception Public Services LXM payments up to $250,000 require approval from

David Whitehouse (SVP and Treasurer) and over $250,000 must be approved by Donald Shassian (Chief Financial Officer). All other expenses up to $50,000 must be approved by Kathy Caminiti (VP, Corporate Accounting) and Daniel McCarthy (EVP & COO) must sign up to $250,000. Donald Shassian (Chief Financial Officer) must sign for any expenses over $250,000.

Regulatory Uploads and ERATE

• Joseph Demasi (Director, Regulatory) and Jessica Matushek (Senior. Manager, Regulatory) can approve up to $50,000 for regulatory upload items.

• Katherine Caminiti (VP, Corporate Accounting) can approve up to $500,000 for regulatory upload items.

Scheduled principal and interest payments

Vice President of Finance and Treasurer can sign up to $500,000. Over $500,000 requires a dual signature of Donald Shassian (Chief Financial Officer) or Rob Larson (SVP, Chief Accounting Officer).

State qualification fees Stefan Pelechuk can sign up to $50,000.







Type of Expenditure Exception Stock Repurchase Program

David Whitehouse (SVP and Treasurer) has authority to approve Stock Repurchase payments under the guidelines approved by the Board of Directors' resolution on February 23, 2006.

Taxes • Stefan Peleschuk or Bob Elliott or Mario Alvarez can approve up to $50,000 for tax upload items and up to $250,000 for customer pass through tax upload items.

• Rob Larson (SVP & Chief Accounting Officer) or Alan Kelsey (Vice President Tax) can approve up to $500,000 for tax upload items and up to $1,000,000 for customer pass through tax upload items.

• Any tax upload items greater than $500,000 or customer pass through tax upload items greater than $1,000,000 require a dual signature of both Rob Larson (SVP & Chief Accounting Officer) and Donald Shassian (CFO).

UPS Consolidated Billing and Materials transportation for Non-PO related items

Ed Smith, Sr. Manager, Fleet and Network Materials Service, can approve up to $50,000. Lynda Willis (AVP Procurement) is authorized up to $250,000. Over $250,000 also requires approval from Don Shassian (EVP & Chief Financial Officer).

Employee Uniform Program

Lynda Willis (AVP Procurement) is authorized up to $250,000. Over $250,000 also requires approval from Dan Shassian (EVP & Chief Financial Officer).

Take the Lead Cecilia McKenney, EVP, HR & Call Ctr Sales & Svc can approve all Take the Leads request.




Authorization Form

Authorized Signature form

Each cost center owner is responsible for initiating the process to obtain assignment of levels 1-3 for his or her employees. An Authorized Signature form must be completed for each employee who is to be given authorization privileges upon initial entry into the Authorized Signature database (RAP). NOTE: If an approved form is not on file with the Corporate Accounting

office, authorization privileges will not be granted to employee.

Process for initial assignment of authorization

Following are the steps to be followed for initial assignment of authorization privileges.

Step Action

1 Cost center owner (level 4) identifies employee requiring level 1-3 of authorization based on job responsibilities.

2 Employee completes Authorized Signature form and submits to cost center owners (levels 4 and 5) for approval.

3 Cost center owners approve form and forward to Corporate Accounting.

4 Corporate Accounting scans Authorized Signature form into Authorized Signature database (RAP) to verify approval signatures on source documents.

5 Corporate Accounting files and maintains copy of Authorized Signature form.





Authorization Form, Continued

Process for employees with existing profile

Following are the steps to be followed for employees with an existing profile in the Authorized Signature database (RAP), including signature.

Step Action

1 Cost center owner (level 4) identifies employee requiring level 1-3 of authorization based on job responsibilities.

2 Cost center owner sends an email to Corporate Accounting indicating the cost center and authorization level to be added to the employee’s profile.

3 Corporate Accounting validates the employee’s level before making the requested change in the Authorized Signature database (RAP).

4 Corporate Accounting files and maintains copy of email authorization.




Operating Expenses

Purpose The purpose of this section is to provide guidelines for authorization of

purchase orders and invoices.

Purchasing policy

All purchases over $2,500 (including tax & freight) will require a valid purchase order. A purchase requisition is not a valid purchase order. A purchase order must be created in the Infinium module by procurement for all operating expenses in advance of committing company funds. All purchase requisitions are reviewed by procurement for best use of company funds. Procurement will review all requisitions for price, availability from supplier, and vendor selection prior to creating a valid purchase order. All blanket requisitions requests are reviewed and approved by the AVP, Procurement. All blankets requisitions greater than $100k are reviewed and approved by the EVP, Chief Financial Officer.. The following are exceptions to the $2,500 rule: • Airborne/Federal Express/UPS • Advance Refunds (Public Services) • Benefit carrier claims/payments • Carbonite, providing online data backup services (Peace of Mind) • Charitable contributions • Collection agency fees • Customer refunds • Directory producers, distribution and commission vendors • Emergency Maintenance (appropriate documentation must be included

with the invoice sent to AP that resulted in the emergency service). • Fleet fuel, maintenance, licensing and registration fees • Legal fee payments • Mohave Wireless Inventory Handsets • Pole attachment payments, including revenue remittances • Postmaster payments • Private jet services for Senior Management • Property Acquisition/Sale Costs





Operating Expenses, Continued

Purchasing policy (continued)

• Real estate • Recruitment vendor fees • Regulatory agency required payments • Relocation expenses (SIRVA)Repair & Return Items • Right of way payments including permit fees • Tax payments • Sales agent/payphone commissions • Treasury Bank fees • Uniform Program Invoices (i.e., Aramark Invoices) • Utility bills (includes telephone, cable, and satellite) • Xerox billing





Operating Expenses, Continued

Authorization limits

Purchase orders are based on established authorization levels and monetary limits (see Authorization Levels and Monetary Limits section).

Capital expenditures

Capital expenditures are approved based on established authorization levels and monetary limits identified in the Capital Project Approval Policy. NOTE: See Fixed Assets web site for a copy of the Capital Project Approval

Policy.

Non-PO expenditures

Invoices for goods or service purchased outside of the purchase order process (less than $2,500 or on PO Exception listing) are approved based on established authorization levels and monetary limits (see Authorization Levels and Monetary Limits section).

Invoice approval

No additional authorization is required for invoices that are covered by a purchase order. Verification of receipt and successful completion of services is required to pay purchase-related invoice. Invoices received that were not, and should have been, covered by a purchase order will be routed back to requisitioner to complete the process (set up purchase order).




Contracts

Purpose The purpose of this section is to define authority and guidelines for entering

into agreements on behalf of Frontier.

Policy It is Frontier’s policy that all agreements involving Frontier must be supported by

written contract or agreement.

Policy Details Operational Support and Strategic Contracts are addressed through the

Business Support Services organization. The BSS Contract Management policies and procedures include:

• Non-Disclosure Agreement Policy • Intake Request Process including:

o Request for Proposal o New Contract Creation o Statements of Work o Contract Renewals o Contract Amendments o Contract Assignments

• Financial Stability Review Policy • Contract Review Process • Signature Authorization Policy • Executed Contract Management Process

o Receipt of Executed Contract o Contract Compliance o Multiple Bid Policy

A copy of the policies and procedures outlined above can be found on the Purchasing website. http://home.fcinternal.net/corp_purchasing/default.asp?ID=2

http://home.fcinternal.net/corp_purchasing/default.asp?ID=2




Accounting

Purpose The purpose of this section is to identify the necessary approval levels for

general ledger journal entries and identify who has posting authority.

General ledger journal entry types

General ledger journal entries are divided into two types: • Recurring • Non-Recurring





Accounting, Continued

Recurring entries

Recurring entries that are prepared and posted to the general ledger on a routine basis are divided into three types. NOTE: Recurring entries a & b listed below do not require manual sign-offs.

a) Auto-Posting recurring entries: are systematically prepared by feeder systems

and sub-ledgers for posting directly to the general ledger and no manual intervention is necessary. e.g. Accounts Payable, Payroll, Purchasing, Fixed Assets etc. Such entries are automatically posted to the general ledger as part of month-end processing.

b) System-generated recurring entries: are based on automated data files generated by sub-systems, sub-ledgers or the general ledger that are manually uploaded to the general ledger. e.g. Revenue and Cash Feeds from Billing Systems, Cost of Access system accruals, Month-end Allocations (corporate, sector, territory, etc.), Inter-company settlements, Loadings, Depreciation, etc. All system-generated recurring entries must be posted by the General Ledger organization.

c) Manual recurring entries: are prepared by individuals for routine transactions, because automation is not available. They are manually prepared and uploaded to the general ledger. e.g. Expense accruals for property and franchise taxes, Statutory Income tax provision entries, Directory revenue and expense amortization entries, Elimination entries for affiliate transactions, etc. Manual recurring entries must comply with the following policy.

• Preparer must sign all manual recurring journal entries, regardless of

dollar amount. • All journal entries must include proper supporting documentation, or in

the case of business sensitive matters, reference to where appropriate supporting documentation may be obtained.

• All manual recurring journal entries require at a minimum the signature of a Supervisor in the General Ledger organization.

• Reviewer must review the journal entry for completeness, balancing, proper account coding and agreement of amounts to supporting documentation.

• All manual recurring journal entries must be posted by the General Ledger organization.





Accounting, Continued

Non- Recurring entries

Non-Recurring - entries prepared for posting to the ledger, which are not routine in nature or are necessary to reflect unusual business transactions. Also includes entries that are corrections or reclassifications of posted entries. Non-recurring entries must comply with the following policy. NOTE: This section only covers Non-recurring entries. For additional guidance on

determining if an entry is covered by this policy, consult the Accounting group.

• Preparer must sign all Non-recurring journal entries, regardless of dollar amount. • All journal entries must include proper supporting documentation, or in the case

of business sensitive matters, reference to where appropriate supporting documentation may be obtained.

• All Non-recurring journal entries require the signature of an authorized reviewer. The reviewer must be someone within the General Ledger organization with the requisite approval authority as identified below.

• Reviewer must review the journal entry for completeness, balancing, proper account coding and agreement of amounts to supporting documentation.

• All Non-recurring journal entries must be posted by the General Ledger organization.

Type of Entry Total Dollar Value of Entry Approval Level Required

Less than $50,000

Accounting Supervisor

$50,000 - $250,000 Accounting Manager $250,000 - $1,000,000 Controller, AVP or VP Accounting

Non-recurring entries – Income Statement

Greater than $1,000,000 Chief Accounting Officer or Chief Financial Officer

Less than $50,000

Accounting Supervisor

$50,000 - $1,000,000 Accounting Manager $1,000,000 - $5,000,000 Controller, AVP or VP Accounting

Non-recurring entries – Balance Sheet Only

Greater than $5,000,000 Chief Accounting Officer or Chief Financial Officer

NOTE: For all Non-recurring entries over $1,000,000 the Chief Financial Officer must be notified

of the entry. It is not necessary to obtain written approval except as noted above, however the CFO must be aware of the entry.




Other Expenses

Purpose The purpose of this section is to provide guidelines for authorization of

miscellaneous items not covered elsewhere in this policy.

Expense reports

All expense reports are paid through payroll. The non-taxable reimbursement (EXPR) will appear on pay stub as separate line item. Employee’s immediate supervisor or next higher person in employee’s organizational hierarchy must approve all expense reports submitted for out-of-pocket business travel and entertainment expenses not covered by a procurement card. Administrative Assistants cannot approve expense reports on behalf of their supervisor or for anyone in the department(s) that they support. NOTE: No employee is allowed to approve his or her own, a peer’s or a

supervisor’s expense report.

Procurement card purchases

Authorization for procurement card purchases is based on the cardholder’s user profile as established by the cost center owner with the credit card provider. No prior or additional authorization is required to make a procurement card purchase. Refer to Frontier’s Procurement Card Policy for additional information on the review and approval process for procurement card statements.





Other Expenses, Continued

Company contributions

Company contributions are allowed under this policy but require the proper level of authorization based on this table.

Contribution Authorization Required Career Band Up to $1,000 Only VP of Field Operations if funds

available in budget. E

Up to $2,500 Regional Vice Presidents (Denise Baumbach, John Lass, Steve LeVan and Ann Burr)

F

$2,500 to $7,500 Dan McCarthy, executive Vice President and COO.

H

$7,500 to $25,000

Contributions of up to $25,000 made to a single recipient in a calendar year require approval from Donald Shassian (Chief Financial Officer).

H

Over $25,000 Single contributions of more than $25,000 or a contribution to one recipient that exceeds $25,000 for the current calendar year requires approval from Donald Shassian (CFO) and Maggie Wilderotter, Chairman and CEO.

H

Disposal of plant assets

Approval for disposal of plant assets must follow authorization limits: • for projects (see Capital Project Approval Policy) based on net book

value of asset, or • listed in the capital approval document based on net book value of asset.





Other Expenses, Continued

Legal settlements

The following table provides Legal Settlements guidelines.

Legal

Settlement Amount Authorization Required

Employees (termed/active)

Up to $50k • Local HR Director • SVP Human Resources • FTR Associate General Counsel • RVP if their CC/OA is being

charged >$50k and

<$250k • All approvals as above for $50k,

and • Hilary Glassman, Sr. VP -

General Counsel & Secretary >=$250k • All approvals as above for >$50k

and <$250k, and • Don Shassian, CFO or Maggie

Wilderotter, Chairman and CEO Non-Employees Up to $50k • FTR Associate General Counsel

• RVP if their CC/OA is being charged

>$50k and <$250k

• All approvals as above for $50k, and

• Hilary Glassman, Sr. VP - General Counsel & Secretary

>=$250k • All approvals as above for >$50k and <$250k, and

• Don Shassian, CFO or Maggie Wilderotter, Chairman and CEO

Documents

FINANCIAL POLICIES AND PROCEDURES...FINANCIAL POLICIES AND PROCEDURES Module: Authorization Policy Issue Date: 02/02/10 Page: 1 authorization_policy.doc Table of Contents TABLE OF