Personal Services Contract - Processes
Personal Services Contract - Processes
Personal Services Contract Processes
Written, Bilateral Contract Process
The Personal Services Contract process requires a minimum of 20 working days from start to finish -- assuming no delays in the process. The following synopsis illustrates the minimum process timeline.
- Department negotiates with contractor for services to be performed
- Department creates Encumbrance document FGAENCB (ENC) in Banner
- Completed ENC moves to all required approval queues (approx 24 hours depending on number and availability of approvers)
- Reviewed by WSCU Human Resources for compliance (if disapproved, returned to department for correction)
- Electronic approval of ENC is entered in Banner by Human Resources
- ENC information moves to Finance & Administration for contract generation (minimum of 24 hours - depending upon workload and complexity of negotiated terms)
- Contract & certification sent to affected agency for approval (except services with pre-approved waivers)
- Contract mailed to contractor for signature (up to 4 days for regular mail PLUS whatever additional time for the contractor to review & approve, PLUS up to 4 days for return by regular mail)
- If no corrections & required W-9 is complete and received, then contract is forwarded for President’s signature (up to 2 days) Only applies to contracts over $5000.00.
- Signed contract along with completed W-9, certification approval, and any required insurance certificates to WSCU State Controller delegate for signature (minimum 24 hours if all is in order)
- One original of contract is mailed to contractor, one original goes to Accounts Payable, and a photocopy is sent to the originating Department to be used as a payment voucher.
Only after all signatures are obtained shall the contractor begin work or perform services.
Additional Process Requirements and Information:
- Description of Service - Provide a full description of services in the ENC FOATEXT screen or send the description in a separate document to Finance and Administration. (See "How to Describe Services" below.) Send all documents that are provided by the contractor to Finance and Administration.
- Insurance - Written Personal Services Contracts shall require independent contractors and their subcontractors to provide, at their own expense, and maintain for the duration of the contract, insurance coverage required by the State. Certificates of Insurance shall be provided to the University prior to commencement of work. Contact WSCU Finance and Administration or WSCU Contract Administrator for current required coverage.
- Overnight Mailing - Contracts generated from ENCs received in Finance and Administration with fewer than three weeks before the scheduled start of services may be mailed to the contractor by Federal Express mail at the expense of the department that entered the encumbrance.
- Receipt of Signed Contracts - Most contractors return signed contracts within 12-20 days from WSCU’s mailed date; out-of-state contractors usually require an additional week.
- Payment - Accounts Payable will process payment on the Tuesday following advice of the completion of services for check processing the next day.
- PERA Retiree - If the requestor is aware that an independent contractor is a PERA retiree or is otherwise affiliated with a PERA retiree, include that information in the ENC text information. Once verified that employer PERA contributions are due, they will be deducted from the funds encumbered on the ENC.
- Non-Resident Aliens – Contracts for non-resident alien contractors require additional IRS forms and time to process a contract. Contact WSCU Human Resources for assistance.
Paperless Process (services under $5,000)
An expedited process may be used for certain Personal Services Contracts under $5,000. The same State Fiscal Rule that allows a simplified process for certain prepayments under $5,000 without the use of a requisition/purchase order allows some flexibility in processing small dollar contracts for services. The requirement to generate a multi-page, hard-copy contract, in duplicate for mailing and obtaining signatures is eliminated. The simplified paperless process greatly reduces the processing timeline and costs. Services initiated under the paperless process remain subject to Human Resources review and approval. The WSCU Contract Administrator reserves the right to require a written, bilateral contract for any service, regardless of the dollar amount, if deemed necessary to protect the interests of the University.
The following services will be processed as paperless contracts:
- Cooperating student teacher supervisors
- Athletic officials, referees
- Accompanists, choreographers, musical directors, costumers, art models
- Animal welfare consultant
- Most honorariums
The following services will be processed as paperless contracts UNLESS the requestor or responsible WSCU employee specifically requests a written, bilateral contract to bind the contractor to complete the services as negotiated:
- Guest lecturers or guest speakers
- Laboratory services or other technical analysis
- Academic program review consultant
- Photographic service
- Some local performers
Services under $5000 that will REQUIRE a written, bilateral contract include:
- Extended Studies instructors
- Performers and entertainers using an agent
- Consultants hired as result of a formal written proposal
- Contractors that require inclusion of additional terms and condition
- Services which pose a risk to employees, students, or the public
- Services for which no waiver has been granted from the State Department of Personnel
Paperless Processing Steps:
- Requestor creates and completes an Encumbrance document FGAENCB (ENC) in Banner.
- Provide a full description of services in the ENC FOATEXT screen or send the description in a separate document to Finance and Administration. (See "How to Describe Services" below.) Send all documents provided by the contractor to Finance and Administration.
- PERA Retiree - If the requestor is aware that an independent contractor is a PERA retiree or is otherwise affiliated with a PERA retiree, provide that information in the ENC text information. Once verified that employer PERA contributions are due, they will be deducted from the funds encumbered on the ENC.
- Non-Resident Aliens – Use of the paperless process for services performed by non-resident aliens will be determined on a case-by-case basis. Contracts for non-resident alien contractors require additional IRS forms and time to process a contract. Contact WSCU Human Resources for assistance.
- On the last line of FOATEXT, type “PAPERLESS”.
- If a written contract is preferred in any instance when a paperless process normally would be used, type “WRITTEN REQUESTED” on the last line of FOATEXT to override the paperless process. Otherwise, the above "paperless" guidelines will be followed.
- After all Banner approvals have posted, Finance and Administration generates and sends the contractor a transmittal letter which briefly identifies the services being provided and explains that payment will be generated without a written contract. The contractor is given the option to request a written contract. A Form W-9 and Indepent Contractor certification (IC letter), required from the contractor before payment will be made, is included with the transmittal letter if the contractor’s W-9 and IC letter are not already on file in WSCU Accounting.
- When the W-9 and IC letter is received, a hardcopy “receiving” document is sent to the requestor. The receiving document has a printout of the requestor’s encumbrance text (FOATEXT screen) and a section for approving and “receiving” satisfactory completion of the services. Finance and Administration will have signed off on the W-9.
- Services may commence upon receipt of the W-9 and other applicable required forms or on the date the transmittal letter is signed if the W-9 is on file and all applicable forms are received by that date.
- Upon satisfactory completion of the services, the responsible WSCU employee must sign, date, and send the receiving document directly to Accounts Payable (WSCU Accounting). Any invoices received in the department or by the responsible WSCU employee should be attached to the receiving document.
How to Describe Services
- WHO - The full, legal name of the company, entity or individual with whom the University is contracting; provide the name to whom the check will be paid, including complete address. If the contractor currently works or recently worked for the University, any other Colorado state agency, local government or school district, provide the employer and employment dates. If contractor is a PERA retiree, provide that information and retiree's SSN.
- WHAT - Detailed description of service to be provided; required results; what the contractor is expected to do; what are the deliverables? What does the fee include; what expenses are to be reimbursed? What is the University expected to provide, if anything (e.g. make arrangements for lodging via University PCard or purchase order; reimburse contractor upon submission of an invoice for meal expenses according to the State’s per diem, etc.)?
- WHEN - What is the term or duration of the contract (starting and ending dates)? When is service to be performed and completed? Are there required milestones and deadlines?
- WHERE - Location where service is to be performed, if a location is required by the University.
- WHY - Why are the services being contracted? What is the benefit to the University?
- HOW - “How” is not always an essential element, but if how services are to be performed is an essential part of the agreement, it must be stated in the contract.
- HOW OFTEN - Frequency of service to be performed.
- HOW MUCH - Payment - how much, at what rate, when is payment to be made? Give special handling instructions of payment.
Tracking Uncompleted/Unapproved Encumbrances
The Banner system generates automatic reminder emails weekly to those requestors who have incomplete or unapproved Encumbrances. It is the requestor’s responsibility to follow up on these unfinished ENCs.
- Contact the Budget Analyst in Finance & Administration if the listed ENC is “NSF” and make arrangements for a budget adjustment or an NSF override.
- If there is no “Complete” indicator by the listed ENC and the requestor is finished with the ENC, the requestor needs to go back into FGAENCB and complete the document.
- If the listed ENC shows a “Complete” indicator, then either:
- The budget approver for the ENC budget(s) has not yet approved the document in Banner;
~ Requestor contacts and follows up with budget approver(s) to get the ENC approval in Banner (FOAUAPP).
~ See FOAAINP to view pending approvals.
- Human Resources has not approved the document (E000 Human Resources queue).
~ Complete paperwork or information has not been provided by the department
See Banner link to forms instructions below for approving and checking the status of an ENC document.
Banner Forms Instructions for Encumbrances
See BANNER INSTRUCTIONS MANUAL For Requisitioners for the following Banner forms used for Encumbrance processing.
- Check Funds Availability - FGIBDST
- Create an Encumbrance - FGAENCB
- Delete/Cancel an Encumbrance - FGAENCB
- Approve a Document - FOAUAPP
- Check Unapproved Document Queue - FOAAINP
- Check Encumbrance Status & Payments - FGIENCD
- Vendor Search - FTIIDEN (Remember – you must enter the vendor name & address in FOATEXT even if you pull in the vendor into the ENC vendor field on the first page as the information does not show during the approval process which will delay your contract.)
General Message – GUAMESG
If an ENC is denied or disapproved in Banner for any reason, a message in the General Message form (GUAMESG) will be sent to the person who created the original ENC. Banner will notify you when you have a message. A “DISAPPROVED” document will not affect future processing of the contract once the document is corrected and re-approved. Message records remain in GUAMESG until removed. To delete, select the message you wish to delete, click on “Record” on the top function bar, then click “Remove” in the drop-down window.
Changes to Encumbrance and Contract
- Encumbrance: The amount on an ENC document can be increased or decreased before the ENC is fully paid. Send an email with details for the adjustment to Finance and Administration.
- Contract: If significant changes need to be made to the scope of work of a written Personal Services Contract, a written amendment to the contract will be issued and signatures of the contractor and University will be obtained. Submit the details for contract amendment in an email to Finance and Administration.
Services Costing $5,000 and Above
Services which have commenced or have been completed without the full execution of a Personal Services Contract -i.e., signed by the contractor, WSCU President and WSCU State Controller delegate – are unauthorized or after-the-fact commitments (ATF) and are in violation of State statute when liabilities are incurred or payments made on the State’s behalf without prior approval of a purchase order or a State contract when required under Fiscal Rule 2-2. WSCU State Controller signing authority delegation does not include the authority to approve commitment vouchers when a disbursement has been made in violation of CRS 24-30-202(2) or an obligation incurred in violation of CRS 24-30-202(3). Entry of a Banner Encumbrance document alone is insufficient to meet the statutory requirements. Individuals who knowingly allow work to commence without a signed contract may be held personally liable.
State Controller Ratification Required: Complete details and full explanation of the circumstances of an ATF contract are required to be submitted by WSCU’s Vice President for Finance and Administration to the Deputy State Controller for ratification of a commitment that violates state statute according to the requirements of the State Controller’s Policy for “Processing Commitment Vouchers that Violate State Statute”. The approval of an ATF ENC and completion of the contract or payment process will be withheld until the University’s ratification request is approved by the Deputy State Controller.
ATF Process: If services have commenced or have been completed, the following items are required:
- Completed Banner ENC document
- “After-the-Fact (ATF) Report” form completed by the person responsible for the ATF and sent to WSCU Finance and Administration
- Receipt in WSCU Finance and Administration of a completed W-9 and IC letter, any required certificates of insurance, and any required supplemental IRS forms from the contractor
Services Costing Under $5,000
Services costing under $5,000 which have commenced or have been completed without the full execution of a Personal Services Contract or before a paperless transmittal letter is signed by the University are also unauthorized ATFs. The same ATF process above is required except that the Deputy State Controller’s approval is not required. After the Finance VP’s approval of the ATF Report and HR approval of the ATF ENC, the written or paperless contract and payment processes can be completed.