Transcript Brandeis University Consultant Policy

Brandeis University
Consultant Policy
Office of the Controller
Training Seminar
March/April 2005
www.brandeis.edu/controller
Agenda
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Introduction
Why are we doing this?
What’s changed?
When is it effective?
Consultant/Honorarium Approvals and Other Requirements
What is an Independent Contractor?
What is a Consultant?
What is an Employee?
What is a Honorarium?
Independent Contractor v Employee
AP v Procurement Examples
Process Flow
Forms
Paying foreign consultants
Questions
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Introduction
Loretta Bemis – Associate Controller
Ofer Ben-Gai – Assistant Controller
Debbie McQuaid – AP Manager
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Why are we doing this?
 Internal Factors
 In synch with University Procurement Policy.
 Encumber services.
 Use of approved contract template.
 New forms to standardize hiring and payment of consultants.
 External Factors
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IRS regulations on employment classification.
Federal grantor requirements for standard policy regardless of funding
source.
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What’s Changed?
 Contractual Agreement
 Approval Amount
 Forms
 Independent Contractor Status
 Other
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When is it effective?
 Effective July 1, 2005.
 Transition period; now through end of fiscal year.
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Evaluate forms and process.
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Review existing long-term consulting arrangements.
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Prepare contracts and encumbrances for next fiscal year.
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Consultant/Honorarium Approvals and Other Requirements
Total Amount
Budget Availability and
Approval
Contract Review
Controller
Determination of
Independent
Contractor Status
Bid
Requirements
(Contact
Procurement
Office)
1,500 or less
Unit Budget Manager or
designee, or Dept Head, PI
for grant funded
University Treasurer
if template contract
not used (not
required for
honorarium)
Not required
Not required
More than $1,500 but less
than $10,000
Unit Budget Manager or
designee, or Dept Head, PI
for grant funded
University Treasurer
if template contract
not used
Yes
Not required
$10,000 to $100,000
Unit Budget Manager or
designee, or Dept Head, PI
for grant funded
Dean, or Assoc VP
University Treasurer
if template contract
not used
Yes
Yes if > $25,000
Over $100,000
Same as above AND
Executive Vice President
University Treasurer
Yes
Yes
$5,000 or less all Honoraria
regardless of funding
source and Research
Consultation charged to a
grant
Unit Budget Manager or
designee, or Dept Head, PI
for grant funded
Contract Not
required
Not required
Not required
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What is an Independent Contractor?
 An entity or individual not employed by the university who performs the
required task or tasks according to the contractor’s own manner and
method, outside the control of the university.
 University has the “right to control or direct only the result of the work
and not the means and methods of accomplishing the result.” (I.R.S.)
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What is a consultant?
 An entity or individual who provides expert or professional analysis,
services or advice on a short term basis. In virtually all cases, a
consultant is a form of independent contractor and consulting services
are performed by independent contractors.
 Normally possess specialized skills, knowledge or credentials not
readily available among university faculty and staff.
 An individual or firm that is retained to provide professional advice or
services for a fee, but not an employee of the organization. (from NIH
Grants Policy Statement 10/98 Part II: Terms and Conditions of NIH
Grant Awards)
 Federal, state and FICA taxes are not withheld.
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What is an employee?
 Every individual that performs services subject to the will and control of
an employer, both as to what will be done and how it will be done is an
employee. (I.R.S.)
 An employee depends on an employer for income on a continuing
basis and is subject in the assigned work to the supervision and control
of the employer.
 In most cases, cannot be a current or former employee and consultant
in same calendar year even if independent contractor status is
applicable.
 A regular employee is hired by the University for an unspecified time
period while a temporary employee is hired for sporadic or casual
employment.
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What is an Honorarium?
 Academic term; form of independent contractor.
 A one time payment to confer distinction or to symbolize respect,
esteem or admiration for the recipient.
 Given in addition to or in lieu of reimbursing for expenses.
 Not contractual in nature. Not a legally required payment. Paid at the
discretion of the University.
 If payment has been negotiated with the recipient and is given in return
for services provided, it should be considered a speaking fee or
consultant payment under the guidelines of this policy if payment
exceeds $5,000.
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Independent Contractor v Employee
 The “20 Common Law Factors”
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Right to control what work will be done and how work will be done =
employer-employee relationship = common law employee
 “Categories of Evidence” created by IRS in 1996 to update factors that
clearly indicate the degree of control or independence in the
relationship of the worker and the business
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Behavioral Controls
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Financial Controls
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Relationship of the Parties
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AP v Procurement Examples
 Procurement Services
 Accounts Payable
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P.O. or PCard
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Normal operational goods and
related services
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Maintenance contracts
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Mail houses
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Printing services
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Individual or firm engaged to:
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Design mailing, website, forms
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Prepare a special report or
offer professional advice
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Implement a new computer
system
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Assist management with a new
business initiative
Process Flow Overview
 Identify firm/individual to provide services.
 Department completes Consultant Requisition Form and obtains W-9 (
W-8BEN if non-resident alien) from vendor. Sends both forms to
Accounts Payable.
 Accounts Payable reviews classification if applicable, encumbers
amount using a “C” number and notifies department.
 University approved contract is signed.
 Work is done; consultant invoices department.
 Department prepares Non-Employee Payment Form, and attaches
signed template contract and invoice.
 Send to AP for payment.
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Forms
 Consultant Requisition Form
 University Approved Contract
 Non-Employee Payment Form
 Tax Forms
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W-9 (U.S. citizen, or permanent resident)
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W-8BEN (all non-resident aliens)
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9-5-6 Rule Certification Form if here on B-1, B-2, WB or WT visa
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Consultant Requisition Form
Accounts Payable
Consultant Requisition
Form
SEAL
Contact Person:
Department:
Date:
Determine Consultant Status
Extension:
Vendor Name:
DRAFT VERSION 18 Mar 2005
This form is required to request consultant services, confirm funding availability and encumber the contract amount in the
university accounting system for all contracts of $1,500 or more and for honoraria or research consultation payments in
excess of $5,000.
State:
#
Zip:
DRAFT VERSION 18 Mar 2005
00000
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Visa Status
Address:
City:
State:
US Citizen
B2 / VWT
F-1
Green card
B-1 / VWB
J-1
Other
W-8BEN Required
(also, may be subject to 30% withholding)
W-9 Required
Zip:
Country:
Work was done
Outside the US
In the US
Requisition
Scope of work and summary of services provided
Contract Dates
Funding Source
Start:
University Funded
End:
Service Costs may not exceed:
Grant Funded
Expense reimbursements may not exceed:
Total contract amount may not exceed:
Total number of payments
Account
-
Country:
Tax ID - SSN \ ITIN \ EIN:
Tax ID - SSN \ ITIN \ EIN:
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City:
Vendor Name:
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Address:
(4)
Fund
(2)
(5)
Program
(5)
Yes
No
2. Do they provide similar services to other clients and or business outside the
university? Please attach a copy of their business card, copy of their
advertisement, or letterhead to this form.
Yes
No
3. Do they engage in entrepreneurial activities in an established business, at
risk for profit or loss?
Yes
No
4. Will they receive any training, supervision, or instruction from Brandeis
University other than conveying the scope of services desired?
Yes
No
5. Will they be responsible for determining means and methods to use to
perform services?
Yes
No
6. Will they provide their own supplies, equipment, forms, etc. necessary to
perform services?
Yes
No
7. Do they maintain sufficient insurance to protect against work related
injuries and damage to University property?
Yes
No
8. Will they set their own priorities on time, amount of effort, and hours of
work to accomplish services within stated time frame?
Yes
No
9. How will they be paid?
to be charged to:
DeptID
1. Is the proposed consultant a former Brandeis employee or student?
Project/Grant
(6,9)
Total:
University Approval
Amount
Hourly Rate
Set Fee
10. Will they have control over hiring or supervising Brandeis University
employees?
Yes
No
11. Is this the first time they will perform services for Brandeis University?
Yes
No
12. If “no” to #11, what other department(s) at Brandeis have used this
consultant?
0.00
I certify that the above information is accurate and complete to he best of my knowledge.
I have reviewed the scope of the work and estimated cost of the requested consultant services and approve
this request. I understand that no work may begin until Accounts Payable approves independent contractor
status and a contract is signed.
Department Head/P.I.
Date
Budget Manager or Dept Head.
Date
Dean or Assoc. VP if >$10k
Date
Executive VP if > $100K
Date
Grant Funded for Consultant \ honorarium in excess of $5,000: By signing, P.I also certifies that the
consultant is needed, a selection process was employed, fee is appropriate, and funds to pay are
both uncommitted and approved by sponsor.
Signature of requestor:
Date:
AP use only
[C] Agreement Number
Encumbered amount
Date:
Name:
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18 Mar 2005
18 Mar 2005
Independent Consultant Agreement
g. Consultant hereby certifies that it is an Equal Employment Opportunity employer and that it
complies with the provisions set forth in Executive Order 11246, as amended, and with all other
applicable state and federal statutes and regulations that prohibit discrimination in the workplace,
including but not limited to Department of Labor regulations and The Rehabilitation Act of 1973,
as amended. The contract clauses set forth at 41 CFR sec. 60-1.4 (a) and (b), 41 CFR sec. 60-1.7,
41 CFR sec. 60-250.4 and 41 CFR sec. 60-741.4 are hereby made a part of this agreement.
Brandeis University
Independent Consultant Agreement
1.
Name of Consultant:
2.
Description of consulting services and payment terms (attach additional information as
needed):
3.
Maximum Dollar Amount of Contract: _______
4.
Term of Agreement: ___________
5.
Consultant’s Social Security Number/Individual Tax Identification Number ____________
6.
Mailing Address of payee: __________________________________________________
Street
Country
7.
Apt. No.
City
State
Zip Code
Telephone Number (with area code)
By signing below, Consultant agrees to the following:
a. The relationship between Consultant and Brandeis shall be that of independent Consultant and
client, and nothing in this Agreement shall be construed as creating the relationship of employer
and employee between Brandeis and Consultant.
b. Brandeis does not provide insurance coverage or benefits to consultants, and does not withhold
federal, state or FICA taxes from payments to consultants.
c. All Brandeis information of which Consultant shall become aware as a result of performing
services for Brandeis, including its operations, policies or any other aspect of its business, shall be
deemed to be confidential information, and shall not be disclosed by Consultant to any other
person, company or other entity not involved in this project, without the express written
permission of Brandeis.
d. Consultant agrees to deliver to Brandeis at the termination of its relationship with Brandeis all
documents made, compiled by or delivered to Consultant in connection with the services provided
under this Agreement. Such documents shall at all times be the property of Brandeis.
h. Consultant agrees not to use Brandeis’s name or any other identifying characteristic in connection
with any advertising or promotion related or pertaining to the work performed under this
Agreement without the prior express written permission of Brandeis.
i.
Consultant agrees to indemnify, defend and hold harmless Brandeis, its Trustees, officers, agents,
employees, and Consultants from any liability, cost or expense in connection with or growing out
of any claims whatsoever by Brandeis for loss or damage to Brandeis or Brandeis property arising
from or in any way related to the activities of Consultant.
j.
Each party may terminate this agreement upon written notice to the other, provided that no such
termination shall relieve either party from any obligation incurred prior to the date of termination.
k. This contract is subject to the provisions of the Anti-Kickback Enforcement Act of 1986, Public
Law 99-634 (41 U.S.C. sec. 51-58). By agreeing to this binding Agreement, the transacting
parties (1) certify that they have not paid kickbacks directly or indirectly to any employee of
Brandeis University for the purpose of obtaining this or any other agreement, purchase order or
contract from Brandeis University and (2) agree to cooperate fully with any federal Agency
investigating a possible violation of the Act. Copies of the statute and the pertinent regulations
may be obtained from Brandeis University upon request of the Office of Affirmative Action and
Government Regulation Compliance.
l. Consultant represents that it maintains and is covered by the following insurance:
a. Personal automobile liability insurance.
b. Corporate automobile liability insurance, if applicable.
c. Worker’s compensation and employers’ liability insurance, consistent with all
statutory regulations of the Commonwealth of Massachusetts, if applicable.
m. Consultant must provide a certificate of insurance upon request.
n. This Agreement shall be governed by and construed under the laws of the Commonwealth of
Massachusetts.
Signature of Consultant: _______________________
Date: ________________
e. Any work performed under this contract is considered a work for hire, and Brandeis shall have and
retain copyright and all other intellectual property rights in any and all documents, works, products By Brandeis University: [Treasurer’s Signature Stamp]*
or other materials produced by Consultant in the course of the performance of this Agreement.
f.
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*Any changes to items 7(a) –(n) of this contract requires actual signature by an authorized signatory of
This Agreement is not assignable. Consultant represents that it has no agreements with, or
the University before the work may be commenced.
obligations to, others which are inconsistent with its availability to act as a Consultant to Brandeis.
Non-Employee Payment Form
* This form is for payments to non employees only.
* Prizes and awards for faculty and staff must be processed through HR/Payroll.
* The Brandeis University Consultant and Requisition Form must be processed prior to
payment for all contracts of $1,500 or more and honoraria or research consultation payments
in excess of $5,000.
Brandeis University
Nonemployee
Payment Request
DRAFT VERSION
Mar 2 2005
Vendor Name
Remit to address
Address line 2
Address line 3
Invoice number/description
City
Invoice date
State
Tax ID #
Country
Encumbrance #
C
Visa Status
US Citizen
Zip
Green card
B-1 / VWB
W-9 required if not previously
provided
Payment Sequence
Original Payment
B2 / VWT
F-1
J-1
Other
W-8BEN required if not previously provided
Work was done
Subsequent Payment
Type
Account
(4)
In the US
Fund
(2)
Outside the US
DeptID
(5)
Program
(5)
Project/Grant
(9 - Project)
(6 - Grant)
A/P Code \
Required Backup
Amount
Consultant
7205
07 \ Invoice
Consultant Expenses
7207
None \ Orig. Receipts
Honoraria
7219
07 \ Announcement
Athletic Officials
7221
07 \
Students Prizes/Awards
7237
P\
1042 Tax %
3302
11
72400
-
11000
Total
Indicate handling instructions
if not mailed to payee
T \ AP USE ONLY
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Send to:
Mail stop:
P = Pick up
Date needed:
Voucher
D = Department
Remarks
Prepared by:
Phone:
Individual authorizing
payment:
Date:
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AP USE ONLY:
Income Code: _______
Treaty Benefits Date: ____/____/________
Treaty Country: _____________
Paying non-resident aliens for work done in
the U.S.. Consider regulatory constraints.
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Automatic withholding of 30% for compensation unless claiming treaty benefits.
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Permanent residents (green card holder) must have US tax ID and complete W9. No withholding required.
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Identify the employment eligibility of the person in the US by inquiring about their
entry visa. Most common visa’s are:
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J-1, J-2, B-1, B-2, W-B, W-T (requires additional forms/authorizations)
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H-1B and F-1 not eligible for consultant or honorarium payments but may receive
expense reimbursements. H-1B is employer specific.
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Form W-8BEN is required for all non-resident aliens. Identifies the person as a
non-resident alien.
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Must have a valid social security number or ITIN to claim treaty benefits.
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Form 8233 must be completed to claim treaty benefits and must be confirmed
by the I.R.S. before AP can grant a treaty benefit. May delay payment to
individual.
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Examples
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Scorpio Sound
Tom Stone
Robert Campbell
David Walker
Lisa Bartoloni
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Questions?
Loretta Bemis – Associate Controller
x6-8686 [email protected]
Ofer Ben-Gai – Assistant Controller
x6-4471 [email protected]
Debbie McQuaid – AP Manager
x6-4484 [email protected]
www.brandeis.edu/controller