Handbook of Business Procedures
Aug. 31, 2010
February 2, 2012
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 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 NRA-VID@austin.utexas.edu.
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 and Agreements
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. 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 cleaning and pest control
- Services resulting in a tangible deliverable such as artwork, printing, or film processing