FAQ Regarding: Freeze on Consulting / Independent Contractors and Temporary Agency Staff
Question 1
Do the requirements setforth in the memo continue for orders in FY 2009/2010?
Response 1
Yes. Until further notice, the requirement to obtain Senior Vice President approval applies for orders over $10,000 in 2009/2010.
Response 2
Use of the forms is strongly encouraged as they solicit the completion of critical questions that the Executive Vice President and Provost and Senior Vice President will need in order to consider your proposal. Use of a standardized form also expedites the approval process, as all involved will easily recognize the form and know its function.
Question 3
The policy addresses Unrestricted and Sponsored Projects but not Restricted accounts. Can you clarify the policy for those staff positions, consultants, temps… on restricted accounts?
Response 3
Restricted accounts are subject to the new approval requirements. Only engagements paid in full (100%) by a Sponsored Project Account are exempt from obtaining the approvals.
Question 4
For temps continuing under $10k not needing approval does that include the benefits that we pay the agency?
Response 4
The $10,000 threshold for temporary staffing orders is based on the total cost, including any benefits.
Question 5
The total payment of $10,000 being referred to in the approval for temps, is that total for each individual temp or a lump sum total for all temps?
Response 5
The $10,000 amount is per temporary agency staffing project. If the department has a need for multiple temporary staff to perform a single project, the request should be submitted for approval as a single request (if project exceeds $10,000). If the project includes only one temporary agency staff, the request for the individual would also need approval (if over $10,000).
Question 6
How does this freeze affect honorarium payments, if at all?
Response 6
Awards (honoraria) are not affected by this freeze.
Question 7
Can I continue to process payments for contractors for this past weekend’s event that are under $10,000? It’s a combination of check requests and purchase orders.
Response 7
If work has already been performed, we are obligated to pay the contractor - regardless of the amount. Therefore, invoices should be sent to Accounts Payable and Check Requests should be sent to Disbursement Control. All new engagements and all continuing engagements are subject to the new policy.
Question 8
Does the Senior VP and Executive Vice President/Provost need to see the Requisition/Check Request? Will the Senior VP and Executive Vice President/Provost return the approval to the department or to Business Sevices?
Response 8
The Senior Vice President and Executive Vice President and Provost do not need a copy of the Requisition or Check Request. They will return the approval form back to the department. The department needs to attach the approval to the Requisition / Check Request and return to Business Services for processing.
Question 9
Is there a way to tell whether or not a vendor is deemed to be a “consultant”?
Response 9
A consultant is an individual (or group of individuals) who provides professional or technical advice, opinions, or services to the university for a fee. Example consultants include, but are not limited to: experts, advisors, trainers, editor/writers, referees, judges, translators, interpreters, screenwriters, proposal writers, etc. A consultant can do business using either a SSN or Federal Tax ID. A consultant can use his or her name when conducting business or have a formal business name. If an engagement involves receiving service, advice, opinions, they should be considered consultants not vendors and, therefore, need approval.
Question 10
Does the new policy affect vendors who only have a SSN and not a TPIN? Currently when I pay these vendors I submit a Forms Req along with an Independent Contractor Agreement?
Response 10
Consultants/Independent Contractors can do business using either a SSN or Federal Tax ID. All Consultants/Independent Contractors, as defined in #8, will need approval, regardless of their tax identifier.
Question 11
We need to increase a PO or re-open a PO for a consultant who is working a project. The amount is going to be $15k for the rest of FY 2009. What do I do?
Response 11
Before you increase your PO, please obtain the necessary approval. Once approved, the increase can be accommodated.
Question 12
We have a fairly large group of independent contractors (instructors). Since we cover their travel expenses (including hotel and meals), are these expenses included in the $10,000.00 cap for approval or is it strictly for professional fees only?
Response 12
Business expenses, such as travel and meals, are not included in the $10,000 cap. The $10,000 cap applies only to the fee portion.
Question 13
Can we continue to use the current Blanket PO for each individual temp for department as long as the total amount does not exceed $10,000 at the end of the project or by 12/19/2008?
Response 13
Yes.
Question 14
Are deposits included in the $10K total?
Response 14
Yes. Approvals are necessary if the total payment (deposits + future payments) for forthcoming or current services exceed $10,000 between 11/06/2008 and 06/30/2009.
Question 15
There no place on the form for senior business officer approval. Will the documents be accepted at the provost/todd level without input from senior business officer?
Response 15
All normally-required expenditures/purchasing approvals should be on the Check Request or Requisition. The provided forms are only used to capture approvals from the Executive Vice President and Provost or Senior Vice President. It is expected that only those engagements supported by approvers within the department would be sent to the Executive Vice President and Provost or Senior Vice President for approval.
Question 16
With whom should we follow up to check on the status of the approval?
Response 16
Business Services will not know the status of the approval, since requests are sent directly to the Executive Vice President and Provost or Senior Vice President. Departments should allow reasonable time for the review and approval process. If checking on the status of the approval is urgent, we suggest sending an email message to: adminops@usc.edu. This email address can be used to request updates on approvals from both the Executive Vice President and Provost or Senior Vice President.
Question 17
Can a box be added to the Form to indicate whether the request is coming from HSC or UPC.
Response 17
Although there are no plans to include a box, there is a new row on the form for a campus address. We suggest you use this place to indicate your location. Upon review by the Executive Vice President and Provost or Senior Vice President, forms will be returned to the campus address indicated, unless other arrangements have been made.
Question 18
I have a 23 account which is a Program Income Account directly connect to our State Grant (Sponsored Account). Is this account exempt from the recent freeze policy? I am asking because we have an existing (prior to the freeze policy) independent contractor on the 23 account.
Response 18
The situation you reference is exempt from obtaining the additional approvals, provided the account is directly connected to the "5" account, and the Independent Contractor is paid in full using funds from the State Grant (and not from a combination of sources).
Question 19
We sent 3-4 people to Helpmates to get payrolled, prior to yesterday’s hiring freeze memo. Given that we made a verbal commitment to them that their temp. position would last a few months, will we be able to hire them as normal or do we need to submit approvals?
Response 19
We would need the approvals in order to keep them as payrolled temps (assuming they will be paid more than the $10K threhold), even if a verbal indication was made to engage them.
Question 20
I had a question about the $10,000 limit for payments to temp agencies. I know it begins as of 11/6/08 but is this dependent on the invoice date or will it be dependent on the actual period of work?
Response 20
The $10,000 limit is based on work performed after 11/06/2008. If a temp has already performed the work, and invoice would be processed without approval.
Question 21
I currently have a PI who wants to set up an independent contractor relationship. The PI is planning to pay the fees from a 22 account that is set up to pay for these services. Do we need to get approval from the Provost or Todd Dickey if the expense on a 22 account.
Response 21
Yes, approval is needed to engage independent contractors paid on a "22" account. Only independent contractor engagements paid in full by a federal and state sponsored project account (these begin with the number "5"), are exempt.
Question 22
Our office has already entered into a consulting contract for our golf tournament which is paid from a 22 account. Will the agreements that were signed prior to the freeze still be honored?
Response 22
Agreements already signed will need to be approved, if the service has not yet been rendered and if the amount is over $10,000.
Question 23
We have a guy who’s a certified electrician and repairs specialty lights. He’s a vendor. Do we need to get approval as a contractor for him?
Response 23
No, approval is not needed for technicans who repair speciality equipment.
Question 24
We have a company that we hire for Public Relations and they do some of our ads, and other such things. Do we need to get approval as a contractor for that company?
Response 24
Yes, approval is needed for public relations and advertising firms. (Corrected 11/11/2008)
Question 25
We have a software licensing agreement that comes with a service component. Does that require an approval?
Response 25
Approval is not needed for service that is part of a software licensing agreement, provided that the software company is also the service provider. If the software service is provided by a third party, it would need approval.
Question 26
We only hire temporary employees on an “as needed basis,” and not for any long-term projects or contractual agreements. For example, if we are short staffed in the kitchen department or dish room department, then we will call an agency person to help us for the day (s) whatever the job may deem necessary. Another occasion is when we have special banquet or catering events which require an unusual number of extra servers/bartenders to serve the events. How does the “freeze” on temporary services effect us given the nature of our business and trying to staff events properly. Please advise as to how we should proceed with obtaining approvals.
Response 26
The best approach is to demonstrate through the approval process that your department needs approval for on-going temps to fill sudden need throughout the year, given the circumstances of your business. You'll need to explain why not having this flexible approval will result in a highly-problematic operation, and explain why it is not practical for your operation to request approval for each needed case.
Question 27
The Disbursement Control website states that designers and photographers are suppliers, not Independent Contractors. Do we need to go through the approval process for designers, photographers and other suppliers ($10k and up) as well?
Response 27
The Disbursement Control website (www.usc.edu/dc/ic) has been corrected to clarify that designers are independent contractors. Hence, engaging a designer will require approval. Photographers continue to be considered suppliers, and as such, will not require approval.
Question 28
To clarify the freeze and how exactly it applies to consultants/independent contractors/design services, etc. that are already in progress and will continue through January 2009. Is Executive Vice President and Provost approval required for an academic department if a contract/agreement was already signed prior to November 6, 2008 and will continue to December 19, 2008 or beyond that date and involves payments that will exceed $10,000? Also, if a contract was signed, wouldn’t this constitute a breech of the contract? If so, how do you suggest we deal with that?
Response 28
Four answers to the four part question: 1) If the consulting arrangement is already in progress, we will pay for all services already performed. 2) If additional work will be performed and will end on or near December 19, 2008, it will not need approval - even if over $10,000. The December 19, 2008 is a goal date. If the project extends a few days thereafter, that is an acceptable delay not needing approval. 3) However, if you expect work to continue in the new calendar year approval will be needed. 4) It is not a breach of contract to terminate an agreement according to agreed upon terms. Hopefully your department used the University's standard ICA Contract. The University's ICA contract states that we can give notice without cause and without penalty, provided we give the contractor 30 days written notice. We have a sample notice template on our freee homepage. If your contract states different terms, you should contact General Counsel to discuss a legal out.
Question 29
We have ICs that teach courses that run from 2.5 - 10 days. Some ICs will not go over the $10k limit alone but if one course has 4-5 instructors, then cumulatively it can go well over $10K. Are the approvals based on individual ICs or overall project IC fees?
Response 29
ICAs are processed on a per agreement basis. Therefore, you would only need approval if a single agreement with a single individual/company exceeded $10K. Processing on an individual basis is necessary because Disbursement Control pays each contractor separately and will look for attached approvals, if needed, on an individual basis.
In contrast, temps should be approved on a per project basis, though sometimes a project might include only one temp. A project is usually articulated on a single requisition/purchase order and approvals, if necessary, should be attached to each requisition.
Question 30
We are planning to have an event at an outside venue and the total cost of the event will exceed $10,000. Does this freeze apply to new contracts with hotels to host an event (services will include catering, room rental, etc.)? If so, does this apply to internal transactions of the same nature?
Response 30
Contracts with hotels (and caterers) are exempt from the approval.
Question 31
Our school contracts every year with a vendor to provide various services and equipment for an annual dinner, such as project management and technical design; lighting design and management; sound design and mixing; lighting package; Audio package; Teleprompter; and Miscellaneous production expenses. Does this require approval.
Response 31
A vendor that provides services and equipment for an event is exempt from the approval.
Question 32
Does this also apply to headhunter agencies that are already under contract? This assumes that the position they are searching to fill will be approved as an exception to the staff freeze.
Response 32
If the headhunter has already been engaged via a contract, and the search is underway, it would not need approval. New headhunter engagements should be approved. Note, however, that you should reference restrictions regarding the hiring freeze before offering the position to the candidate identified by the headhunter.
Question 33
Were there any changes made to the University's travel policy as part of the Provost's cost reduction initiatives?
Response 33
There are no changes to the university's travel policy as part of the cost-cutting initiatives.
Question 34
We have a company that does all the engineering, video, and systems operations of our scoreboard and sound system at Galen Center during sporting events. We also have a different company that provides equipment and engineering services for USC Radio Broadcasts- all sports throughout season which appear on air. Do these need approval?
Response 34
No appproval is required for a vendor that is providing equipment, services, and maintenance.
Question 35
We have a new consulting engagement that will exceed $10,000 but will be completed by December 19, 2008. Does this need approval?
Response 35
Yes. Approval is needed for new engagements over $10,000, even if the engagement is completed before December 19, 2008. Only continuing engagements over $10,000 that will be completed before December 19, 2008 are exempt from the approval process.
Question 36
Can other administrative Senior Vice Presidents besides Todd Dickey sign exceptions?
Response 36
Yes. Each Senior Vice President (Dickey, Abeles, and Harris) can each sign exceptions for their respective areas. The Executive Vice President and Provost, can sign for academic units.