Handbook of Business Procedures
Aug. 31, 2010
January 26, 2015
A. Authorization for Professional Services Performed by Individuals
1. General Guidelines
In general, the APS (paper document) or *DEFINE, PBS (electronic document) is used to authorize unique, low risk services provided by an individual or sole proprietor. Here are some additional guidelines:
- Authorization should be obtained prior to the services being performed.
- Services are provided by an individual or sole proprietor whose vendor ID starts with a "2".
- The amount authorized for payment in any fiscal year should be $25,000 or less.
- Services should be one-time, short-term, or sporadic.
- Full-time university personnel may not receive additional salary payments from state funds.
- The authorization only covers one fiscal year period at a time.
- An Employee/Independent Contractor Classification Checklist (EICCC) is required to accompany every payment voucher for individual services authorized by the APS, PBS, or a contract. Note: If the EICCC determines the individual should be paid as an employee, process the payment as a *DEFINE, OV7 document through Payroll Services. Normally, services provided continuously over a period of two weeks or longer should be handled using Human Resource Services procedures.
- Examples of services to be authorized using an Authorization for Individual Services include:
- Guest speakers at lectures, seminars, and conferences
- Visiting researchers
- Other individuals providing unique services, such as professional editors, research subjects, mentors, professional musicians, and conference participants
- The APS or PBS may not be used to procure services, which result in the creation of original literary, dramatic, musical, or artistic works (including photographic services, technical writing services, and songwriting services). Contact Business Contracts for assistance.
- The APS or PBS may not be used to procure services from an independent contractor for computer programming, website design or editing, software development, creating a database or other information technology services (IT Services). Instead, the department must contact the designated buyer to determine whether a purchase order can be used. If a purchase order cannot be used, the Purchasing Office will refer the department to Business Contracts for assistance.
- The APS or PBS may be used to authorize IT services to be provided by employees of the university. The employee must have a "Position of Special Trust" form on file, or must complete the form and provide the department with a PDF copy of the form before the employee will be authorized to provide the service.
Note: An individual who is not a U.S. citizen may be paid as an independent contractor with certain restrictions. More information about those restrictions is available in section 12.5. International Nonemployees. For additional information, contact firstname.lastname@example.org.
The PBS document is used to electronically authorize unique services provided by an individual or sole proprietor. However, there are a few instances where a PBS cannot be used. In these situations, departments should continue to use paper APS forms:
- When a 26-account must be used.
- When authorizing multiple individuals to receive fees and/or travel reimbursements during a specific event. (This is referred to as a blanket APS and must include a list of all participants.)
- When authorizing direct-billed travel expenses for a group.
- When authorizing direct-billed travel expenses for an individual without a vendor record if no reimbursement will be made to the traveler directly. When no fee for services is authorized, a *DEFINE VE5/RTA should be used to authorize travel expenses for an individual who has a vendor record.
- When authorizing taxable travel that includes nonemployee travel reimbursement without required receipts, spouse or family members' travel, moving expenses, or house-hunting trips.
B. Business Contracts and Agreements
If payment to an individual is anticipated to be in excess of $25,000 or if special terms and conditions are required, regardless of the dollar amount, a contract must be executed.
An Employee/Independent Contractor Classification Checklist is required to accompany every payment voucher for individual services authorized by the APS, PBS, or a contract.
For more information, please contact Business Contracts.
C. Purchasing Procedures
A purchase order is required when an individual or company performs general services that are widely available and subject to bidding requirements as shown in Part 7.4 Purchasing Process. Examples include:
- Repetitive services such as monthly preventative maintenance and services of equipment (e.g., Xerox, IBM)
- General services such as design or advertising services
- Emergency maintenance services such as one-time cleaning due to unexpected event and one-time pest control or removal
- Services resulting in a tangible deliverable such as printing or film processing