Summary of Changes to MSU Manual of Business Procedures for 2001 Page 1 of 5 SUMMARY OF CHANGES TO THE MSU MANUAL OF BUSINESS PROCEDURES FOR 2001 Changes made since 11/13/2000 Visit the Controller's Web site for additional information : http://ctlr.msu.edu Business Forms can be found at htt ://ctlr.msu.edu/download/ VOLUME I SECTION 5: ACCOUNT NUMBERS AND ACCOUNT RE UESTS Requests to establish or amend a revolving account should be accompanied by a transmittal letter explaining the reason for the request. The name and phone number of a contact person should be included in the transmittal letter. SECTION 15: CASH HANDLING Several revisions made to Item Ill. A. Deposits of Revenue, including information on Bankcards and armored car service . A new item (XI. Unidentified Checks) has been added which provides procedures for departments to follow if they receive a payment not related to their operation . Update of University's Bank (Item XII. Wire Transfers). SECTION 17: CREDIT CARD ACCEPTANCE Item VII.B.2. -AIS has a web site for use in setting up a VeriSign TM account. In Item VII.C., note that there is a $.15 per authorization fee. Supplies should be ordered directly from ABN AMRO Merchant Services (see Item IV. , C). SECTION 30: FACULTY/STAFF IDENTIFICATION CARDS Section has been revised with current information. SECTION 35: OFFICE OF RISK MANAGEMENT & INSURANCE • • • Item Ill., A- To obtain approval for a University-Owned vehicle to be used by student clubs, student organizations, or non-University groups, complete "Request for Non-Employee/Student Agency Use of MSU Vehicle" form . This form is available at http://www.ctlr.msu.edu in Risk Management forms download . Item Ill., B - revisions concerning qualifications and responsibilities of drivers driving University-owned vehicles; use of 15 passenger vans is restricted to a 15-mile campus radius; driving 15 passenger vans on freeways/expressways is prohibited. Item Ill., D - Rental expense for 15 passenger vans from outside agencies is generally not reimbursable. For new policies concerning 15 passenger vans, please refer to memo dated February 22, 2002, mailed to Deans, Directors, Chairpersons and Executive Managers from Fred Poston, Vice President for Finance and Operations and Treasurer. • Additional information and guidelines provided on University property loss and damage (see item IV. Property). Alisting of types of property loss not covered by insurance has been added. Also note the statement on departments' responsibility for reporting property loss claims to Risk Management and Insurance on a timely basis. SECTION 46: FOOD AND LODGING PURCHASED ON CAMPUS CHARGED TO UNIVERSITY ACCOUNTS Item 111.B.2. - reference to "Certification for International Visitors Entering the U.S. with B1/WB1 or B2/WB2 Visa Status" (Exhibit 77-D) must be attached to the JVE submitted for some non-resident alien visitors . SECTION 48: FLOWER PURCHASE GUIDELINES http ://ctlr.msu.edu/mbp/ytdchgO 1.htm 2/27/2004 Summary of Changes to MSU Manual of Business Procedures for 2001 Page 2 of 5 Revised to include the purchase of a funeral arrangement for "dependent children" of an employee , adjunct faculty member, retired employee or major donor. SECTION 53: MOVING EXPENSES Various moving companies provide discounts to the University. For more information, contact the MSU Purchasing Department (www.gurchasing.msu.edu}. Although the payment is made directly to the moving company, the unit should not contract directly with the moving company. The individual employee remains responsible for negotiating and contracting with the moving company. In the event a dispute arises between the moving company and the employee, responsibility for resolving the matter rests with the employee. SECTION 55: PAYROLL DEPARTMENT Item 11.,H. - Employees may have their checks directly deposited into their personal checking or savings account by completing a "Direct Deposit Authorization" form. Direct deposit will become effective for the current month paydate if received in Payroll 6 days prior to the paydate. Also, direct deposit may be discontinued if the Payroll Department has received the notice for salaried employees 6 days prior to the paydate. SECTION 70: TRAVEL REGULATIONS The section has been updated consistent with a memo that was mailed on April 12, 2002, addressing several dramatic changes in the travel industry and issues concerning the procurement of airline tickets. • Updates to Cluster Travel Agencies (1.F .) • Item 11.B and IV.B. reference to "Certification for International Visitors Entering the U.S. with B1/WB1 or B2/WB2 Visa Status" (Exhibit 77-0). • Travel Advances (V.A.) - Service Fee Applies • NEW - what to do if it is not possible for the payee to sign the travel voucher (V.B.2.k.). • If travel reimbursement voucher is prepared on a computer, please submit: (1) original voucher and one copy (plus one additional copy if the travel is out of state) (V.B.1.) • Throughout the section , language for travel approval reads "someone administratively senior to the traveler must sign .. . " • For mileage incurred on or after January 1, 2002, the University's mileage allowance increased to 36 cents per mile. SECTION 74: INVOICE PROCESSING SYSTEM This section has been updated consistent with the new procurement system. SECTION 75: VOUCHERS A special memo, dated September 20, 2001, was mailed to MAU Budget Personnel concerning the following disbursement voucher processing issues. A. Payee Signatures: The signatures of payees and approvers serve an important internal control function supporting the payment of disbursement vouchers. To meet accountability documentation standards (to satisfy the signature requirement on vouchers): • Original signature is required on original voucher • • An E-mail of payee authorization, or In unusual circumstances, a fax of the voucher with the payee signature will be accepted, or http:// ctlr .msu. edu/mbp/ytdchgO 1.htm 2/27/2004 Summary of Changes to MSU Manual of Business Procedures for 2001 Page 3 of 5 • The signature of someone administratively senior to the payee with notation "signing for payee". This option certifies that the signer received verbal authorization to file the claim on behalf of the payee . • For non-MSU payees only, may note "Non-MSU" in payee signature field. B. Departmental Approval Signatures: All vouchers require an original signature of an authorized signer for the account(s) charged. C. Copies required when vouchers are submitted: Please note that processing may be delayed when vouchers are received without sufficient copies. Vouchers may also be returned to the submitting department if vouchers are submitted without sufficient copies on an ongoing basis . • Only an original and one copy now required for all vouchers (except for out of state travel which will require an original and two copies) • Direct Payment Vouchers - one original and one copy • Multiple Check vouchers - one original and one copy • Reimbursement Vouchers - one original and one copy • Travel Reimbursement Vouchers - one original and one copy (plus one additional copy if for out-of-state travel) In April, the Controller's Office announced the availabiliiy of direct deposit for MSU employee reimbursements submitted for payment on either a Reimbursement Voucher or on a Travel Reimbursement Voucher. Direct deposit of employee reimbursements is optional at the discretion of the individual being reimbursed . If the employee has not elected direct deposit for payroll transactions, direct deposit of employee expense reimbursements is not available. Employees may obtain direct deposit authorization cards from the Payroll Department. SECTION 76: INDEPENDENT CONTRACTORS Departments are required to designate if the company is owned (51 % or more) by a woman or minority (see item Ill, D, 5). When a contract has this designation, departments are required to send a copy to Purchasing if contracts are less than or equal to $10,000 . The PSC form has been revised to include this designation. Also, effective April 1, 2001 , the PSC forms will be available only from the Controller's Office web site. Please refer to new SECTION 77 for information on Nonresident Alien Independent Contractors. SECTION 77: NONRESIDENT ALIEN NRA INDEPENDENT CONTRACTORS AND NRA RECIPIENTS OF HONORARIUM. RENTS. ROYALTIES AND AWARDS New section added to clarify issues relating to compensating certain nonresident aliens including Immigration and Naturalization Service and Internal Revenue Service regulations relating to issuing payments to nonresident aliens. A memo dated April 29, 2002, was mailed to MAU Budget Personnel on this update. Sections 46, 70, 75 and 76 have also been revised with reference to Section 77 and forms. VOLUME II SECTION 220: UNIVERSITY STORES Changes include: • Addition of an online return form • New counter hours are 7:30 a.m . to 5:00 p.m. • A "printed" Stores catalog is no longer being offered http:// ctlr .msu. edu/mbp/ytdchgO l .htm 2/27/2004 Summary of Changes to MSU Manual of Business Procedures for 2001 Page 4 of 5 • New Open Order policies • Open Order limit increased to $2,500 Budget Booster is now prepared by MSU Surplus Store (refer to Section 222). SECTION 221: RECYCLING AND WASTE MANAGEMENT Item 11,B, 1,b. concerning Office Paper - Special pickup service *NOTE that some university documents are required to be kept for varying periods of time to comply with legal and fiscal requirements. Contact University Archives and Historical Collections, Sec. 335, or www.msu .edu/uniUmsuarhc/; call 517-355-2330 for more information. SECTION 222: MSU SURPLUS STORE The new on-line Pick Up Request Form (PURF) is now available (111.A.2). It is quick and easy, MSU Surplus Store is immediately notified that you have something for them to pick up . This form can only be used for non inventoried items for no credit. The Budget Booster (IV.) is now paperless . It is a list-serv that is accessible to all. You may sign up for the list serv by emailing MSU Surplus Store at surpluss@msu .edu. SECTION 224: INVENTORY DEPARTMENT Equipment Criteria (Ill) - definitions added and the Criteria has been updated. Information on Equipment Taken Off Campus (V) has been updated. Hyperlinks (to web sites and forms) added throughout Section 224. SECTION 255: OFFICE SERVICES DEPARTMENT Condensed and renamed the "Word Processing Services" section to "Tape Transcription Services;" facsimile services have been discontinued. SECTION 270: PURCHASING Entire section has been updated. Please be sure to note the following . I. General Policy II. Purchase Requisition a. Form - Item 2 (on-line authorized user) b. Purpose - Item I (Purchase authorization) III. Bidding Procedures (formerly SectionVII) IV. Purchase Order d. Open Purchase Orders f. Maintenance Service Contracts g. Change Order to a Purchase Order h. Vendor Exhibits on Campus V. Returns - Material Return Slip (MR) c. Preparation http:// ctlr .msu. edu/mbp/ytdchgO 1.htm 2/27/2004 Summary of Changes to MSU Manual of Business Procedures for 2001 Page 5 of 5 d. Distribution and Routing e. Transportation Service Request Card (TSR) VI. Purchasing Card - to be utilized for purchases totaling $2,500 or less a. Purpose b. Procedures - Purchasing Card Cardholder Application (Exhibit IV) VII. Foreign Merchandise Acquisitions - New Item VIII. Minority and Women Owned Businesses IX. Code of Ethics c. Conflict of Interest SECTION 300: E UIPMENT TRANSFER NOTICE Equipment Transfer Notice (ETN) and instructions on how to use an ETN have been revised . Also revision clarifying the use of object codes with the ETN SECTION 315: GIFTS GRANTS OR CONTRACTS Updates to the item on Sponsored Research include: • When human subjects or animals are involved in the proposed research, approval by the respective University committees is required before an account number can be assigned. • Reference to approval by VP for Computing and Technology when proposals involve acquisition of major computers or use of TV equipment has been removed. • The mailing of proposals is the responsibility of departments. Previous language stated that "the Office of the Vice President for Research and Graduate Studies will mail proposals ." Miscellaneous edits were made throughout Section 315 to clarify policy and procedure. http:// ctlr .msu. edu/mbp/ytdchgO l .htm 2/27/2004 Summary of Changes to MSU Manual of Business Procedures for 2001 Page 1 of 5 SUMMARY OF CHANGES TO THE MSU MANUAL OF BUSINESS PROCEDURES FOR 2001 Changes made since 11/13/2000 Visit the Controller's Web site for additional information: http://ctlr.msu.edu Business Forms can be found at http ://ctlr.msu.edu/download/ VOLUME I SECTION 5: ACCOUNT NUMBERS AND ACCOUNT RE UESTS Requests to establish or amend a revolving account should be accompanied by a transmittal letter explaining the reason for the request. The name and phone number of a contact person should be included in the transmittal letter. SECTION 15: CASH HANDLING Several revisions made to Item Ill. A. Deposits of Revenue, including information on Bankcards and armored car service. A new item (XI. Unidentified Checks) has been added which provides procedures for departments to follow if they receive a payment not related to their operation . Update of University's Bank (Item XII. Wire Transfers). SECTION 17: CREDIT CARD ACCEPTANCE Item VII.B.2. - AIS has a web site for use in setting up a VeriSign TM account. In Item VII.C ., note that there is a $.15 per authorization fee . Supplies should be ordered directly from ABN AMRO Merchant Services (see Item IV., C). SECTION 30: FACULTY/STAFF IDENTIFICATION CARDS Section has been revised with current information. SECTION 35: OFFICE OF RISK MANAGEMENT & INSURANCE • • • Item Ill., A- To obtain approval for a University-Owned vehicle to be used by student clubs, student organizations, or non-University groups, complete "Request for Non-Employee/Student Agency Use of MSU Vehicle" form . This form is available at http://www.ctlr.msu .edu in Risk Management forms download. Item Ill., B - revisions concerning qualifications and responsibilities of drivers driving University-owned vehicles; use of 15 passenger vans is restricted to a 15-mile campus radius; driving 15 passenger vans on freeways/expressways is prohibited. Item Ill., D - Rental expense for 15 passenger vans from outside agencies is generally not reimbursable. For new policies concerning 15 passenger vans, please refer to memo dated February 22, 2002, mailed to Deans, Directors, Chairpersons and Executive Managers from Fred Poston, Vice President for Finance and Operations and Treasurer. • Additional information and guidelines provided on University property loss and damage (see item IV. Property). A listing of types of property loss not covered by insurance has been added. Also note the statement on departments' responsibility for reporting property loss claims to Risk Management and Insurance on a timely basis . SECTION 46: FOOD AND LODGING PURCHASED ON CAMPUS CHARGED TO UNIVERSITY ACCOUNTS Item 111.B.2. - reference to "Certification for International Visitors Entering the U.S. with B1/WB1 or B2/WB2 Visa Status" (Exhibit 77-D) must be attached to the JVE submitted for some non-resident alien visitors. SECTION 48: FLOWER PURCHASE GUIDELINES http:// ctlr .msu. edu/mbp/ytdchgO 1.htm 2/27/2004 Summary of Changes to MSU Manual of Business Procedures for 2001 Page 2 of 5 Revised to include the purchase of a funeral arrangement for "dependent children" of an employee, adjunct faculty member, retired employee or major donor. SECTION 53: MOVING EXPENSES Various moving companies provide discounts to the University. For more information, contact the MSU Purchasing Department (www.Qurchasing.msu.edu). Although the payment is made directly to the moving company, the unit should not contract directly with the moving company. The individual employee remains responsible for negotiating and contracting with the moving company. In the event a dispute arises between the moving company and the employee, responsibility for resolving the matter rests with the employee. SECTION 55: PAYROLL DEPARTMENT Item 11.,H. - Employees may have their checks directly deposited into their personal checking or savings account by completing a "Direct Deposit Authorization" form. Direct deposit will become effective for the current month paydate if received in Payroll 6 days prior to the paydate. Also, direct deposit may be discontinued if the Payroll Department has received the notice for salaried employees 6 days prior to the paydate. SECTION 70: TRAVEL REGULATIONS The section has been updated consistent with a memo that was mailed on April 12, 2002, addressing several dramatic changes in the travel industry and issues concerning the procurement of airline tickets . • Updates to Cluster Travel Agencies (1.F.) • Item 11.B and IV.B. reference to "Certification for International Visitors Entering the U.S. with B1/WB1 or B2/WB2 Visa Status" (Exhibit 77-0). • Travel Advances (V.A.) - Service Fee Applies • NEW - what to do if it is not possible for the payee to sign the travel voucher (V.B.2.k.). • If travel reimbursement voucher is prepared on a computer, please submit: (1) original voucher and one copy (plus one additional copy if the travel is out of state) (V.B.1.) • Throughout the section , language for travel approval reads "someone administratively senior to the traveler must sign ... " • For mileage incurred on or after January 1, 2002, the University's mileage allowance increased to 36 cents per mile. SECTION 74: INVOICE PROCESSING SYSTEM This section has been updated consistent with the new procurement system . SECTION 75: VOUCHERS A special memo, dated September 20, 2001, was mailed to MAU Budget Personnel concerning the following disbursement voucher processing issues. A. Payee Signatures: The signatures of payees and approvers serve an important internal control function supporting the payment of disbursement vouchers. To meet accountability documentation standards (to satisfy the signature requirement on vouchers): • Original signature is required on original voucher • • An E-mail of payee authorization, or In unusual circumstances, a fax of the voucher with the payee signature will be accepted, or http:// ctlr .msu. edu/mbp/ytdchgO 1.htm 2/27/2004 Summary of Changes to MSU Manual of Business Procedures for 2001 Page 3 of 5 • The signature of someone administratively senior to the payee with notation "signing for payee". This option certifies that the signer received verbal authorization to file the claim on behalf of the payee. • For non-MSU payees only, may note "Non-MSU" in payee signature field. B. Departmental Approval Signatures: All vouchers require an original signature of an authorized signer for the account(s) charged. C. Copies required when vouchers are submitted: Please note that processing may be delayed when vouchers are received without sufficient copies . Vouchers may also be returned to th.e submitting department if vouchers are submitted without sufficient copies on an ongoing basis. • Only an original and one copy now required for all vouchers (except for out of state travel which will require an original and two copies) • Direct Payment Vouchers - one original and one copy • Multiple Check vouchers - one original and one copy • Reimbursement Vouchers - one original and one copy • Travel Reimbursement Vouchers - one original and one copy (plus one additional copy if for out-of-state travel) In April, the Controller's Office announced the availability of direct deposit for MSU employee reimbursements submitted for payment on either a Reimbursement Voucher or on a Travel Reimbursement Voucher. Direct deposit of employee reimbursements is optional at the discretion of the individual being reimbursed . If the employee has not elected direct deposit for payroll transactions, direct deposit of employee expense reimbursements is not available. Employees may obtain direct deposit authorization cards from the Payroll Department. SECTION 76: INDEPENDENT CONTRACTORS Departments are required to designate if the company is owned (51 % or more) by a woman or minority (see item 111, D, 5). When a contract has this designation, departments are required to send a copy to Purchasing if contracts are less than or equal to $10,000. The PSC form has been revised to include this designation. Also, effective April 1, 2001, the PSC forms will be available only from the Controller's Office web site. Please refer to new SECTION 77 for information on Nonresident Alien Independent Contractors. SECTION 77: NONRESIDENT ALIEN NRA INDEPENDENT CONTRACTORS AND NRA RECIPIENTS OF HONORARIUM, RENTS, ROYALTIES AND AWARDS New section added to clarify issues relating to compensating certain nonresident aliens including Immigration and Naturalization Service and Internal Revenue Service regulations relating to issuing payments to nonresident aliens. A memo dated April 29, 2002, was mailed to MAU Budget Personnel on this update. Sections 46, 70, 75 and 76 have also been revised with reference to Section 77 and forms. VOLUME II SECTION 220: UNIVERSITY STORES Changes include: • Addition of an online return form • New counter hours are 7:30 a.m. to 5:00 p.m . • A "printed" Stores catalog is no longer being offered http:// ctlr .msu. edu/mbp/ytdchgO 1.htm 2/27/2004 Summary of Changes to MSU Manual of Business Procedures for 2001 Page 4 of 5 • New Open Order policies • Open Order limit increased to $2,500 Budget Booster is now prepared by MSU Surplus Store (refer to Section 222). SECTION 221: RECYCLING AND WASTE MANAGEMENT Item 11,B, 1,b. concerning Office Paper - Special pickup service *NOTE that some university documents are required to be kept for varying periods of time to comply with legal and fiscal requirements. Contact University Archives and Historical Collections, Sec. 335, or www.msu .edu/uniUmsuarhc/; call 517-355-2330 for more information. SECTION 222: MSU SURPLUS STORE The new on-line Pick Up Request Form (PURF) is now available (111.A.2). It is quick and easy, MSU Surplus Store is immediately notified that you have something for them to pick up. This form can only be used for non inventoried items for no credit. The Budget Booster (IV.) is now paperless . It is a list-serv that is accessible to all. You may sign up for the list serv by emailing MSU Surplus Store at surpluss@msu .edu . SECTION 224: INVENTORY DEPARTMENT Equipment Criteria (111) - definitions added and the Criteria has been updated . Information on Equipment Taken Off Campus (V) has been updated. Hyperlinks (to web sites and forms) added throughout Section 224. SECTION 255: OFFICE SERVICES DEPARTMENT Condensed and renamed the "Word Processing Services" section to "Tape Transcription Services;" facsimile services have been discontinued. SECTION 270: PURCHASING Entire section has been updated. Please be sure to note the following . I. General Policy II. Purchase Requisition a. Form - Item 2 (on-line authorized user) b. Purpose - Item I (Purchase authorization) III. Bidding Procedures (formerly SectionVII) IV. Purchase Order d. Open Purchase Orders f. Maintenance Service Contracts g. Change Order to a Purchase Order h. Vendor Exhibits on Campus V. Returns - Material Return Slip (MR) c. Preparation http :// ctlr .msu. edu/mbp/ytdchgO 1.htm 2/27/2004 Summary of Changes to MSU Manual of Business Procedures for 2001 Page 5 of 5 d. Distribution and Routing e. Transportation Service Request Card (TSR) VI. Purchasing Card - to be utilized for purchases totaling $2,500 or less a. Purpose b. Procedures - Purchasing Card Cardholder Application (Exhibit IV) VII. Foreign Merchandise Acquisitions - New Item VIII. Minority and Women Owned Businesses IX. Code of Ethics c. Conflict of Interest SECTION 300: EQUIPMENT TRANSFER NOTICE Equipment Transfer Notice (ETN) and instructions on how to use an ETN have been revised . Also revision clarifying the use of object codes with the ETN SECTION 315: GIFTS. GRANTS OR CONTRACTS Updates to the item on Sponsored Research include: • When human subjects or animals are involved in the proposed research, approval by the respective University committees is required before an account number can be assigned. • Reference to approval by VP for Computing and Technology when proposals involve acquisition of major computers or use of TV equipment has been removed. • The mailing of proposals is the responsibility of departments. Previous language stated that "the Office of the Vice President for Research and Graduate Studies will mail proposals." Miscellaneous edits were made throughout Section 315 to clarify policy and procedure. http://ctlr.msu.edu/mbp/ytdchgO l .htm 2/27/2004 / ( MICHIGAN STATE UNIVERSITY April 8, 2002 TO: MAU Budget Administrators FROM : David Brower, CFO and Controller ~ SUBJECT: DIRECT DEPOSIT OF EMPLOYEE REIMBURSEMENTS j The Controller's Office is pleased to announce the availability of direct deposit for MSU employee reimbursements submitted for payment on either a Reimbursement Voucher or on a Travel Reimbursement Voucher. Direct deposit of MSU employee reimbursements is optional at the discretion of the individual being reimbursed . (Note that direct deposit of reimbursements is not available for repayments of travel advances or petty cash advances.) Making a direct deposit election for a particular payment is simply a matter of marking a new "Direct Deposit" check box at the top of the reimbursement or travel voucher and entering the employee's social security number in the space provided on the voucher form . Examples of the revised Reimbursement Voucher and the Travel Reimbursement Voucher are attached. These new forms are available to download from the Controller's Office forms library on the Internet at http://www.ctlr.msu.edu . Payments requested for direct deposit will be processed in accord with the employee's direct deposit instructions and authorization on file in the Payroll Department. Credit to the employee's designated bank account will be effective on the second bank business day following the voucher being processed by the Accounting Department. For example, if Accounting processes the voucher on Wednesday, the employee's bank account will be credited on Friday. If the voucher is processed on the Friday before Memorial Day (a Monday banking holiday), the bank account will be credited on the next Wednesday. If the employee has not elected direct deposit for payroll transactions, direct deposit of employee expense reimbursements is not available. Employees may obtain direct deposit authorization cards from the Payroll Department, 350 Administration Building (355-5010). Vouchers submitted requesting direct deposit of a reimbursement for which no matching direct deposit authorization record exists in the Payroll Department will be set aside and paid via a standard check mailed to the payee at the address provided on the voucher. (If an employee changes their banking relationship, it is important that they update the direct deposit authorization on file in the Payroll Department on a timely basis.) A "Direct Deposit Notification" and the remittance advice copy of the voucher will be mailed to the employee at the address provided on the reimbursement voucher. An example of this notification form is attached. These direct deposit transactions will be reflected on the fund ledger using a transaction prefix of "DIR" (rather than "CHK") and will be numbered in the range of 100001 - 400000. (A note to anyone performing analysis on accounting transaction records for voucher disbursements may need to modify their logic to include this new prefix.) We know this new service offering will be of interest and benefit to many MSU employees. This will be of particular interest to those who are frequently out of the office on travel assignments. Special thanks are due to Administrative Information Services for their assistance in making this new service possible. If you have any questions about this new service, please feel free to contact Mary Lilly or Chris Twitchell from the Accounting Department at 355-5000. s OFFICE OF THE CONTROLLER Michigan State University 305 Administration Building East Lansing, Ml 48824-1046 517/355-5020 FAX: 517/432-5269 http://ctlr.msu.edu/ Enclosures MSU is an affirmative-action, equal-opportunity institution. I MSU Manual of Business Procedures: Volume 1 Revised Se mber 1998 Page 1 of 4 oo\ yY / 5 SECTION 5: ACCOUNT NUMBERS AND ACCOUNT RE UESTS I. PURPOSE OF PROCEDURE II. COM PONENTS OF UNIVERSITY ACCOUNT NU MBERS III. ACCOUNT RE UESTS IV. EXHIB ITS SECTION 5: ACCOUNT NUMBERS AND ACCOUNT REQUESTS I. PURPOSE OF PROCEDURE A. To briefly explain the components of University account numbers. B. To set forth procedures to be followed when requesting the establishment of a new account or amending an existing account. II. COMPONENTS OF UNIVERSITY ACCOUNT NUMBERS University account numbers have the following format: AA-BBBC . The components of an account number are as follows: AA - The first two digits indicate the type of account. 11 = General fund accounts 21 = Auxiliary revolving, designated revolving and clearing and deposit accounts 31 = Agency, gift and grant, fellowship, scholarship, student aid, student note and student loan accounts 41 = Plant fund accounts 51 = General ledger accounts 61 = Sponsored research accounts 71 = Sponsored research, Michigan Agricultural Experiment Station and MSU Extension accounts 81 = Endowment principal and income accounts 91 = General fund Research Excellence Fund (REF) project accounts. http ://ctlr.msu.edu/mbp/mbp5 .htm 6/12/01 MSU Manual of Busine.ss Procedures : Volume 1 Revised September 1998 Page 2 of 4 BBB - For general fund accounts (excluding the 91-series), these three digits represent the departmental account number. For all other accounts, these three digits have no special significance. C - For general fund accounts (excluding the 91-series), this digit has four designations: 1 = Salary budget and expenditures 2 = Labor budget and expenditures 3 = Supplies, services and equipment budget and expenditures 5 = Special budgets (Contingency and Special Purpose accounts) For all other accounts, this digit has no special significance. III. ACCOUNT REQUESTS A. Revolving Accounts 1. Requests to establish new accounts or to amend existing accounts must be submitted to the Controller for approval on a completed "Revolving Account Request Form" (see exhibit 5-A). "Revolving Account Policies" (see exhibit 5-E) lists criteria used in establishing revolving accounts and reversion limits. Requests should be accompanied by a transmittal letter discussing the nature of the proposed new account or amendment to existing account. Please include the name and phone number of a contact person. f f 2. When completing the form, certain items deserve special attention as follows: a. For revolving accounts, the indicated sources of income (item 5), and types of expenditures (item 7) must be related. Only those expenditures which are incurred to generate the indicated sources of income can be charged to the account. b. Item 13 must be completed on both new and amended account requests. Accounts are not permitted to accumulate balances in excess of working capital needs. c. The request must be signed by a Dean or Vice President. d. All items on the reverse side will be completed by the Controller's Office or Internal Audit. 3. Internal Audit regularly audits accounts to determine that operations are in conformance with the information indicated on approved account request forms. 4. A listing of revenue and expense handling procedures specific to revolving account operations can be found at exhibit 5-f, "Revolving Account Financial Procedures" . 5. Internal Service Billing Rates - Agency accounts which rendering services to Contract & Grant Accounts cannot include any profit or depreciation allocation (which is calculated by C & G separately). "Guidelines for Development and Documentation of Internal Service Billing Rate(s)" (see exhibit 5-G) details these procedures. http://ctlr.msu.edu/mbp/mbp5 .htm 6/12/01 MSU Manual of Business Procedures: Volume 1 Revised September 1998 Page 3 of 4 B. Clearing and Deposit Accounts - These accounts may be established when deposits must be held for disbursements to others ( e.g., sales tax collections to be remitted to the State of Michigan). Requests to establish new accounts or to amend existing accounts must be submitted to the Controller for approval on a completed form "Clearing and Deposit Account Request Form" (see exhibit 5-B). Requests should be accompanied by a transmittal )etter discussing the nature of the proposed new account or amendment to existing account. J?lease include the name and hone number of a contact person. C. General Fund account requests must be approved by the Office of Planning and Budgets. D. Trust account requests must be arranged through the Office oflnvestments and Trusts, telephone 355-5018. E. Gift and Grant, Fellowship and Sponsored Research Accounts 1. Refer to Volume I, Section 23, concerning Fellowships; refer to Volume II, Section 315, concerning Gift and Grant or Sponsored Research accounts. 2. Any further questions concerning Fellowship accounts should be directed to the Office of Fees and Scholarships, 146 Administration Building; questions concerning Gift and Grant or Sponsored Research accounts should be directed to the Office of Contract and Grant Administration, 301 Administration Building. F. Scholarship accounts must be arranged through the Office of Financial Aid. G. Agency Accounts - Student Organizations 1. Use "Application for Agency Account - Student Organization" (see exhibit 5-C). Items 1-8 must be filled in. This form is available in the Accounting Department, Office of the Controller, 360 Administration Bldg., telephone 355-5000, and the Student Activities Office, Office of the Vice President for Student Affairs and Services, 101 Student Services Bldg, telephone 355-8286. 2. The form must be submitted to the Student Activities Office for verification of organization registration and approval of request. 3. After approval from the Student Activities Office, the form must be submitted in person to the Accounting Department, 360 Administration Building, for approval. H. Agency Accounts - Non-Student Organization 1. Use "Agency Account - Non-Student Organization" (see exhibit 5-D). The date, items 1-5, administrative responsibility and the account name must be filled in and submitted to the Dean or Vice President for approval. 2. After approval by the Dean or Vice President, this form must be submitted to the Controller's Office for approval. 3. Forms are available in the Accounting Department, Office of the Controller. I. Agency Accounts - Exemption from State Sales Tax http: //ctlr.msu.edu/mbp/mbp5 .htm 6/ 12/01 MSU Manual of Business Procedures: Volume 1 Revised September 1998 Page 4 of 4 1. Agency accounts do not automatically qualify for exemption from State of Michigan sales tax. 2. Organizations requesting a tax exempt account number must present with their account application a letter from the State of Michigan, Treasury Department, indicating their tax exempt status. If exemption from State of Michigan sales tax is properly documented, the account will be established in the 31-4100 through 31-4199 range of accounts. IV. EXHIBITS Exhibit 5-A. Revolving Account Request Form Exhibit 5-B. Clearing and Deposit Account Request Form Exhibit 5-C. Application for Agency Account - Student Organization Exhibit 5-D. Agency Account - Non-Student Organization Application Form Exhibit 5-D (2). MSU Agency Account - Non-Student Organization Policies and Guidelines Exhibit 5-D (3). MSU Agency Account - Non-Student Organization Signature Authorization Card (Sample Only) Exhibit 5-E. Revolving Account Policies Exhibit 5-F. Revolving Account Financial Procedures Exhibit 5-G. Guidelines for Development and Documentation of Internal Service Billing Rate (s) http ://ctlr.msu.edu/mbp/mbp5 .htm 6/12/01 MICHIGAN STATE UNIVERSITY Office of the Controller 305 Administration Building REVOLVING ACCOUNT REQUEST FORM DP Date: ___ __ _ This is a request to : Amend an existing account 1. Name of Ac co un t : - - - - - - - - - - - - - - - - - - - - - - - - - - - - 2. Permanent Account Temporary Termination Date _______ _ Purpose of Account: __ ______ ________ _ ____ _ ____ _ _ 4. Account Responsibility: a. b. c. P e r s on - - - - - - - - - - - - - - - - - - - - - - Phone _____ _ College/MAU - - - - - - - - - - - - - - - - - - - - - - - - - d. Common Unit Code _______ _ Department 5. Sources of Income for this Account: a. b. C. d. 6. Estimated Yearly Income: $ _ ____ _ 7. Expenditures from this Account will be for: e. f. g. h. 8. Estimated Yearly Expenditures:$ _ __ __ _ 9. Is the activity in this account new? Yes. If not, where has it been accounted for in the past? 10. Estimated resale inventory at June 30: $ _ __ __ _ 11. Estimated billings outstanding at June 30: $ __ __ _ _ 12. Anticipated major equipment purchases from this account: a. b. $ _____ _ $ ____ _ 13 . It is understood that any balance in this account in excess of$ will accrue to the . THIS ITEM MUST BE COMPLETED. SEE REVOLVING supporting fund at Feb 28/29 ACCOUNT POLICIES, (MBP SECTION 5.III.A), FOR GUIDELINES. It is further understood that the use of the account as described above and its financial stability is the primary responsibility of the Dean or Major Administrative Unit Administrator. 14. Signature _ ___ __ ____ ___ _ Department Chairperson or Director Typed Name App ro v ed - - - - - - - - - - - - - Dean or MAU Administrator Typed Name - - - - - - - - - - - - In order to process your request in a timely manner, p case provide a memo explaining your new account request or amendment akc sure to include a contact person and phone number. Thank you in advance for your cooperation. to an existing account. MSU is an Affirmative Action I Equal Oppor/unily Institution Revised 06/1 I /01 FOR CONTROLLER'S OFFICE USE ONLY Account Name: ________ (Fill in Below) __ ____ _____ ___ _ Account Number: _______ _ (Fill in Below) ___ _____ _______ _ Fund: ___ ___________________ _____ _____ _ Fu n c t io n : - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Reversion D a t e : - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Fund to Receive Reversion: __ __________ ___ ____ __ __ _ _ Approved: __ __ __ ______ Date: _______________ _ _ FOR A18 DATA ENTRY ONLY (Remaining data to be completed by Financial Analysis) Account Number _____ _ (3-8) Fund_ 10 Category_ 11 Type_ 12 Function _ _ (13 - 14) Line ___ _ (15 -18) Name ___________ ____ __ _ __ ___ ___ _ _ Maintenance Code 80 (19-78) FOR INTERNAL AUDIT USE ONLY RECORD OF AUDIT "I have examined, through audit, revolving account number __ - __ _ . A copy of the audit report is on file in the Department of Internal Audit." Internal Auditor Date Period Audited Signature Signature Signature Signature Signature MSU is an Affirmative Action I Equal Opportunity Institution MICHIGAN STATE UNIVERSITY Office of the Controller 305 Administration Building Date: June 12, 2001 REVOLVING ACCOUNT REQUEST FORM This is a request to: 0Establish a new account 0Amend an existing account 1. Name of Account: 2. Permanent Account D Temporary Account D - - - - - - - - - - - - - - - - - - - - - - - - - - - -- Purpose of Account: ___ ____ __ ____ ___ _ __ _ ___ ___ _ _ 4. Account Responsibility: Person a. b. c. - - - - - - - - - - - - - - - - - - - - - - - - - - - - College/MAU - - - - - - - - - - - - - - - - - - - - - - - - - Department - - - - - - - - d. Common Unit Code Phone 5. Sources of Income for this Account: a. b. C. d. 6. Estimated Yearly Income: $ _____ _ 7. Expenditures from this Account will be for : e. f. g. h. 8. Estimated Yearly Expenditures: $ _____ _ 9. Is the activity in this account new? If not, where has it been accounted for in the past? 10. Estimated resale inventory at June 30: $ _____ _ 11. Estimated billings outstanding at June 30: $ ____ _ 12. Anticipated major equipment purchases from this account: a b. $ - - - - - - $ - - - - - - z will accrue to the 13. It is understood that any balance in this account in excess of$ supporting fund at __ . THIS ITEM MUST BE COMPLETED. SEE REVOL YING ACCOUNT POLICIES, (MBP SECTION 5.III.A), FOR GUIDELINES. It is further understood that the use of the account as described above and its financial stability is the primary responsibility of the Dean or Major Administrative Unit Administrator. 14. Signature ___ _________ _ _ Approved ___ ______ __ _ _ Department Chairperson or Director Dean or MAU Adm inistrator Typed Name Typed Name ___________ _ 111 orJcr k) process your request in a ti!]1 ~ ianne~· , I t 11.1 l ~ !) t 1 cooperat1 on. ) ,; ' I I ! l l lll I I MSU is an Affirmative Action I Equal Opportunity Institution Revised 06/11/01 FOR CONTROLLER'S OFFICE USE ONLY Account Name: _ __ ______ (Fill in Below) ___________ ___ _ _ Account Number: ________ (Fill in Below) _______ ___ _____ _ Fund: - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Function: - - - - - - - - -- - - - - - - - - - - - - -- -- - - - - - Reversion Date: - - -- - - - -- - - -- - - - - -- - - -- - - - -- - Fund to Receive Reversion: - - - - -- - -- - - - -- - -- - - - - - - - - Approved: _ __ ____ __ ___ Date: ___ _______ ______ _ FOR A18 DATA ENTRY ONLY (Remaining data to be completed by Financial Analysis) Account Number (3-8) Fund 10 Category_ 11 Type_ 12 Function Line (13 - 14) (15-18) Name Maintenance Code 80 (19-78) FOR INTERNAL AUDIT USE ONLY RECORD OF AUDIT "I have examined, through audit, revolving account number __ - ___ . A copy of the audit report is on file in the Department oflnternal Audit." Internal Auditor Date Period Audited Signature Signature Signature Signature Signature MSU is an Affirmative Action I Equal Opportunity Institution MICHIGAN STATE UNIVERSITY Office of the Controller 305 Administration Building CLEARING AND DEPOSIT ACCOUNT REQUEST FORM Account No : - - - - - - Date : This is a request to: Amend an existing account 1. Name of Account: 2. Account Type: Pe_r_m_a_n_e_n~t----------=---:------:------------------------------ Termination Date 3. Purpose of Account: - - - - - - - - - - - - - - - - - - - - - - - - - - 4. Account Responsibility: a. Person - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Phone # - - - - - - b. College/MAU c. Department Common Unit Code: 5. Sources of Income for the Account: a. ___________ _____ _ b. ________________ _ c. ___________ _____ _ d. ________________ _ 6. Estimated Yearly Income: $ 9. Is the activity in this account new? No 7. Expenditures from this Account will be for: a. ----------------- b. - - - - - - - - - - - - - - - - - c. ----------------- d. - - - - - - - - - - - - - - - - - 8. Estimated Yearly Expenditures: $ If not, where has it been accounted for in the past? ____ ______ _____ __ _ 10. Will this account balance be zero at June 30, No If not, please explain _______________ __ _____ _ It is further understood that the use of the account as described above and its monthly reconciliation is the primary responsibility of the Department Chairperson or Director. 11 . Signature Approved Department Chairperson or Director Dean or MAU Administrator Typed Name _ ___ __ ________________ _ Typed Name - ---.... ,. In order to process your request in a timely manner,ylease provide a memo explaining your new account request or amendment to an existing-account. Make sure to include a co'ntact persnn and phone number. Thank you in advance for your cooperation. MSU is an Affirmative Action/Equal Opportunity Institution Revised 06/1 1/01 FOR CONTROLLER'S OFFICE USE ONLY Account Name: (FILL IN BELOW) Account Number: (FILL IN BELOW) Fund: ________________________________ _ _ Function: _________ ________________________ _ Approved: _______ ___________ Date: ____________ _ ****************************************************************************** FORA18 DATA ENTRY ONLY (Remaining data to be completed by Financial Analysis.) Account Number __ _ ___ Fund Category_ 3-8 10 11 Type_ Function 12 13-14 Line __ _ _ 15-18 ~~ - - - - - - - - - - - - - - - - - - - - - Maintenance Code 80 19-78 ****************************************************************************** FOR INTERNAL AUDIT USE ONLY RECORD OF AUDIT "I have examined, through audit, clearing and deposit account number _ __ __ ___ _ A copy of the audit report is on file in the Department of Internal Audit." Internal Auditor Period Audited Signature Signature Signature Signature Signature Revised 06/11/01 MICHIGAN STATE UNIVERSITY Office of the Controller 305 Administration Building CLEARING AND DEPOSIT ACCOUNT REQUEST FORM ool, Date: - -- - - - - - Account No: - - - - - This is a request to : D Amend an existing account D establish a new account 1. Name of Account: - - - -- - - - - -- - -- -- 2. Account Type: Temporary 3. Purpose of Account: _ __ __________ __ __ ___ __ _______________ __ _ _ - - -- - -- - - -- -- - -- - - - -- - -- - Termination Date ______ _ - 4. Account Responsibility: a. Person - - b. College/MAU C. Department _ 5. Sources of Income for the Account: a. b. C. d. Phone# _____ _ Common Unit Code: 7. Expenditures from this Account will be for : a. b. - -- - -- - -- -- - - -- - - c. d . - - - -- - - - -- - - -- - -- 6. Estimated Yearly Income: $ 9. Is the activity in this account new? Yes If not, where has it been accounted for in the past? 8. Estimated Yearly Expenditures: $ _ __________ _ 10. Will this account balance be zero at June 30, If not, please explain _ ___ ___________ ___ ___ _ It is further understood that the use of the account as described above and its monthly reconciliation is the primary responsibility of the Department Chairperson or Director. 11. Signature Department Chairperson or Director Typed Name _ __ __________ _ _ __ ____ _ Approved __ _______________ ___ _ Dean or MAU Administrator Typed Name - - - - - - - -- - - -- - - - -- - - - - ln orcLer..to,.pm~ ,-c(~ t1rno rncITiclcacontact person and phone number. Thank you in advance for your cooperation. J"5 maimer, please provtcle a rnern~xp-, . a~ re· .1ecou:·· :-..:u.c:,1 c,:- amc·:,,i111c:1l LQ "'' ,'\i,1;:~ h..ii£.:? Vince Schimizzi 06/02/01 04:55PM »> Forwarded Mail received from: Evelyn Portee Dave, This is a constant problem and makes our service to campus customers inefficient and awkward when we have to make several phone calls to the departments and do not know who to ask for. With Evelyn's new system we now have a streamlined way to handle our administration of these accounts, now we just need to smooth out the contact with our customers. I would suggest adding a note on the form that departments need to submit a transmittal memo discussing the nature of their request. Additionally, we can notify them of this minor procedural change via Marge's listserv and follow up with a change in the MPS. Upon your review please let us know your thoughts on this. Thanks Vince CC: Portee, Evelyn; Toomey, Marge From: To: Date: Subject: Vince Schimizzi Marge Toomey 6/5/01 3:10PM Change to MPB - Revolving Accounts In following with our phone conversation this AM, I am pursuing minor procedural change for revolving accounts and clearing and deposit accounts . When departments submit an account form (either new or revised), they will need to include a transmittal letter discussing the new/ amended account. My plan to implement this is as follows: 1) Evelyn is working with the systems group to update the account forms to include a note in the form instructing departments to include the transmittal letter. 2) I have attached an MS-Word Document (made from the MPB) with the proposed changes hi-lited in yellow. 3) After 1 and 2 (above) are complete, I would like this change to be announced to the campus business community via your listserv. Let me know if you have any questions or issues. Thanks Vince Vincent Schimizzi Manager, Office of Financial Analysis Michigan State University 394 Hannah Administration Building East Lansing, Ml 48824 Phone: (517) 355-5029 ext 3 Fax (517)353-1706 e-mail: schimiz2@ctlr.msu.edu CC: Evelyn Portee (, f 1"2 / "' Section 5 from the MPB III. ACCOUNT REQUESTS A. Revolving Accounts 1. Requests to establish new accounts or to amend existing accounts must be submitted to the Controller for approval on a completed "Revolving Account Request Form" (see exhibit 5-A). "Revolving Account Policies" (see exhibit 5-E) lists criteria used in establishing revolving accounts and reversion limits. B. Clearing and Deposit Accounts - These accounts may be established when deposits must be held for disbursements to others ( e.g., sales tax collections to be remitted to the State of Michigan). Requests to establish I).ew accounts or to amend existing accounts must be submitted to the Controller for approval on a completed form "Clearing and Deposit Account Request Form" (see exhibit 5-B). Marge, The text hi-lited in yellow are the proposed additions to the MBP. I would also like to communicate this to the campus business community via the listserv as well. Let me know if you have any questions or issues. Thanks Vince MICHIGAN STATE UNIVERSITY * ~~)b, \-- "So. Office of the Controller 305 Administration Building Date: REVOLVING ACCOUNT REQUEST FORM This is a request to Amend an existing account 1. Name of A c c oun t : - - - - - - - - - - - - - - - - - - - - - - - - - - - 2 . Type of Account Temporary Termination Date - - - - - - - - Purpose of Account: - - - - - - - - - - - - - - - - - - - - - - - - - - - 4. Account Responsibility: a. Person b. C. College/MAU Department----------- d. Common Unit Code 5. Sources of Income for this Account: a. b. C. d. 6. Estimated Yearly Income: $ 7. Expenditures from this Account will be for: a. b. C. d. 8. Estimated Yearly Expenditures: $ 9. Is the activity in this account new? Yes. If not, where has it been accounted for in the past? 10. Estimated resale inventory at June 30: $ - - - - - - 11. Estimated billings outstanding at June 30: $ - - - - - - 12. Anticipated major equipment purchases from this account: a. b. $ _____ _ $ ____ _ 13. It is understood that any balance in this account in excess of $ will accrue to the THIS ITEM MUST BE COMPLETED. SEE REVOLVING supporting fund at Dec 31 ACCOUNT POLICIES, (MBP SECTION 5.III.A), FOR GUIDELINES. It is further understood that the use of the account as described above and its financial stability is the primary responsibility of the Dean or Major Administrative Unit Administrator. 14. Signature _ _ _ _ __ _ _ ____ _ Approved ____ ________ _ Department Chairperson or Director Dean or MAU Administrator Typed Name Typed Name - - - - - - - - - - - - \/\ ~ ~ "In order to process your request in a timely manner, please provide a brief explanation regarding your ~~\.L.,new account request/amendme~t to existing account request. Also, be sure to ~ a contact person ~ 11\l 0.d.,i..., '-'- 1k. ,rl.U'VLO and phone number. Thank you m advance for your cooperation." FOR CONTROLLER'S OFFICE USE ONLY Account Name: ________ (Fill in Below) ______________ _ Account Number: _______ (Fill in Below) ______________ _ Fund: _________________ ______ ____ ___ _ _ Fu n c t ion : - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Reversion D a t e : - - - - - - - - - - - - - - - - - - - - - - - - - - - - Fund to Receive R ev e r s ion : - - - - - - - - - - - - - - - - - - - - - - - - - Approved: __ ___ __ _____ Date: ___________ ____ _ _ FOR A18 DATA ENTRY ONLY (Remaining data to be completed by Financial Analysis) Account Number _____ _ Fund_ Category_ Type_ 12 (3-8) Function __ (13 - 14) 10 Line ___ _ (15 - 18) 11 Name _ _________ _____ _ ___ ___ ___ __ _ Maintenance Code 80 (19-78) FOR INTERNAL AUDIT USE ONLY RECORD OF AUDIT "I have examined, through audit, revolving account number __ - ___ . A copy of the audit report is on file in the Department of Internal Audit." Internal Auditor Date Period Audited Signature Signature Signature Signature Signature MSU is an Affirmative Action I Equal Opportunity Institution Add to MBP Section 15: CASH HANDLING Note: this is a new item XI. XIII Exhibits) XI. Unidentified Checks (item XI. Wire Transfers will become XII and / Upon receipt of any payment, departments should put forth a reasonable effort to verify whether or not the payment relates to their operations. If a payment cannot be identified as belonging to the department, the unidentified payment is to be sent to the Controller's Office, Room 305 Administration Building, for handling and disposition. Departments should forward an unidentified payment, and any related correspondence, to the Controller's Office within 10 business days of receipt of the payment if possible. Upon receipt of an unidentified payment, the Controller's Office will follow a set of procedures in a further attempt to identify the payee, including contacting the payor. If attempts to identify the payee are unsuccessful, the Controller's Office will deposit the payments into the "Unidentified Checks" clearing account (21-3254). Once a payee is identified, the Controller's Office will contact the respective department and will process the appropriate paperwork to transfer the payment to the correct account (i.e. JVE if the payment was deposited). Payments will be held in the Unidentified Checks clearing account and, if not identified after one year, will be transferred into a General Fund miscellaneous revenue account (11-0739). From: To: Date: Subject: Jean, Susan Waltersdorf Brown, Jean McManus 4/27/01 11 :36AM Re: escheat property lu'?/ rlwii; /LI C/'\_Le-/l6 There isn't anything in the MBP regarding handling unidentified checks, although it is a good idea. We will pursue writing something up for inclusion. The unadvertised procedure is: The Controller's Office (305 Ad Bldg) maintains an Unidentified Checks Clearing Account, 21-3254. Checks are deposited into this account and research is done to try to determine where the funds belong. Most of the checks that are referred to our office come from other CO departments, but on occasion we'll get a check from the Library, Clinical Center, etc. apparently when they determine that the check does not belong to them. Upon learning where the funds belong, we prepare a JVE transferring the money, otherwise the funds are held 1-2 years and then "written off' to All Others 11-0739 (General Fund Misc revenue account). J I discussed with Dave Brower the need for other University departments to submit unidentified payments ~\ to the Controller's Office for handling and disposition. We are agreed that if the department receiving the funds maintains a "receivable system" and they could validly believe that the payment was meant to meet one of their obligations, they should be able to maintain it as a miscellaneous payment (credit balance), after a wait of a year (or so), and the payment is remains unidentified, they could recognize it as miscellaneous revenue. Documentation should be maintained in case an inquiry should be made. If the unidentified payment could not reasonably be assumed to belong to the department, the check should be forwarded to the Controller's Office. . \ \Y ' / ~ (, I).\~ 1 \'""'b . ~ . \I"' y \ 1 ~ \ .. ,.)- ~ I checked with Glen Klein and Val Aguila from Financial Analysis regarding whether escheat regulations , ). covered unidentified payments. Glen recollected doing research on unidentified deposits some years ag . V ·" nJY His research indicated that since these payments were made as payments to MSU and there would be sufficient records available that would allow proper credit upon inquiry that do not fall under the escheat ~ •. , .',, ) regulations. Unidentified payments should be deemed to be MSU property, not escheatable. ~IY\ ~ ' _ ~ Let me know if you have further questions. vJ Sue. Susan J. Waltersdorf Associate Controller Michigan State University 305 Administration Bldg. East Lansing, Ml 48824 PHONE: 517-353-9175 FAX: 517-432-5269 E-MAIL: walters8@ctlr.msu.edu »> Jean McManus Brown 04/19/01 01 :52PM »> Sue, Are there any procedures in the Manual of Business Procedures relating to escheat property? I searched the Controllers web site and did not find a match . Specifically, how long can a department hold an unidentified payment they have received. Currently they are depositing the funds and posting the amount to their AIR system under a miscellaneous account. It's not much $ but some has been unidentified since 3/97 (the implementation of their new AIR system). Jean McManus Brown, CPA Senior Auditor MSU Internal Audit Office-(517) 355-5030 Fax-(517) 432-1997 brownje@msu.edu CC: Harmon, Kathy; Toomey, Marge MSU Manual of Business Procedures: Volume 1 Revised 10/00 Page -1 of 6 ~ o..,..L. ~V\; A(.Jv ' -I A c:...i.L_ d O V\ l w_ 1"' "'~~---------~ - 1fi I SECTION 15: CASH HANDLING I. II. III. IV. V. VI. VII. VIII. IX. X. XI. XII. ·····-······· ···-··················---- · · · - - · · - - - - - --····-·-·-·-·--·--·---····--··-····-· - - · · · - · - · · · · · · · · · · - - - - - - - - - - - - - - -·······-····-- RESPONSIBILITY CASH RECEIPT FORMS DEPOSITS -·-···--········-·-···· .. ·- CASH HANDLING POLICY ····-·--·--·---·· OVERAGES AND SHORTAGES CASH CONTROL RECORDS RECEIPTS SECURITY CHECKING ACCOUNTS ··········-····-·····-···-····- CHECKS REFUNDED OR CANCELLED WIRE TRANSFERS EXHIBITS ·········-··-------··---······-·············-·······-········--····------------··- ·········--------········------ ····································-····-······ ···············································- ··········---·-··----------- SECTION 15: CASH HANDLING I. RESPONSIBILITY A. Each department is responsible for cash and checks it receives for the University. Funds may be received from sales of items, tickets, meals, etc. B. If funds are received and the department does not have a cash register to record sales, prenumbered receipt forms must be used. The only exception to this would be in the case where prenumbered tickets are sold. C. Upon receipt, all checks for deposit must be restrictively endorsed by the department. At a minimum, the endorsement is to read "for deposit only, Michigan State University" and include the depositing department's name and account number on the back. This action is mandatory for funds to be covered by the University's Crime Insurance Policy. D. If a check has a payee other than Michigan State University, it must be endorsed as drawn and then restrictively endorsed as indicated in item C above to be eligible for deposit. Federal Reserve Bank regulations limit our endorsement field to the first 1 1/2" from the trailing edge of the reverse side of the check. No other markings may be placed on the remainder of the reverse side. E. Departments are responsible for the deposit of cash, checks and/or bankcards no less than once per week. When receipts are infrequent, deposits of a nominal amount ($50.00 or less) may be made less frequently, but in no case less than every two weeks. All funds received must be accumulated in a secure place until deposited. Checks which are held from deposit for more than two weeks, which are subsequently returned unpaid, may result in the department being held liable for the University's returned check service charge. II. CASH RECEIPT FORMS http:// ctlr .msu. edu/mbp/mbp 15 .htm 05/ 17/2001 MSU Manual of Business Procedures: Volume 1 Revised 10/00 A. The following forms are to be used for receipting transactions involving cash or checks: 1. Uarco numbered receipt form for use in a Uarco machine. This form may be obtained from Stores, stock order #140-28140. 2. For temporary or infrequent use, booklets of prenumbered receipt forms can be obtained from Stores, stock order #140-24830. III. DEPOSITS A. Deposits of Revenue. Deposit Receipt Form, form number CO-ca-45c (see exhibit 15-A) is to be used by the department to deposit revenue (cash/checks) with the Cashier's Office, 110 Administration Building. This form may be obtained from Stores, stock order #140-24500A---It should be prepared in the following manner: /' \ 1. Prepare the deposit form in duplicate. crral-al wrh, vo.r ;ov._5 2. The grid for "Description To Be Put On Ledger" should be completed with 5~ffw()J( 5 sva t<5 information to identify the deposit when it is reported on the fund ledger. Reo.5()11().ble /o-c511Y1Jes Ege t~Y' Aectss-rM &< ,-e tJ..C~ hJJ-e, t?...{5D 3. Account number(s) and appropriate revenue code(s) (see S~c;Ji<::>_11 __ 9.~,_R~Y~!!:t:l~ _<:;;9cl~§) must be indicated. 4. Print your name, office address and phone, date and sign the bottom of the deposit form. 5. Total for the top half of the form (account distribution) must be identical to the total for the bottom of the form (funds being tendered). 6. All checks being deposited must include the depositing department's name and account number (handwritten or by stamp) on the back. 7. For deposits consisting of four or more checks, an adding machine tape must accompany the checks. If no adding machine tape is available, a list of the check amounts and a total on a piece of paper is acceptable. 8. Itemize checks, currency and coinage separately. 9. All currency should be banded by denomination and coinage rolled where possible and must bear the name of the department or in the case of coin, name and address of the individual from whom the roll is accepted. These supplies may be obtained from Stores. 10. Prior to the initial acceptance of bankcards as a form of payment, please contact the Office Supervisor, Cashier's Office, 355-5023, for specific information on how to deposit these items. B. Deposits of Expense Abatements. Expense Abatement Deposit Receipt form (s~~~~pjpit 1~:-~) is to be used by the department to deposit funds with the Cashier's Office, 110 Administration Building when such funds are reimbursements of previous expense. (Note: refunds related to University purchase orders must not be deposited using this form. See Section X. below.) This form is not available from Stores, but may be downloaded from the Controller's Office web site at h!tp:l(c;Jh:,ms11.~cltllcl9'Ynl9» Marge Toomey 11/02/01 05:06PM »> Val, Laurie Fisher would like to include the address of Standard Federal in the section on cash handling (Wires). Can you give me the address as it should appear in the Manual ? The French version, etc. Thanks. From: To: Date: Subject: "Valarie Aguila" 11/5/01 5:08PM Re: Bankard rchant Services (AAMS) That is the correct 800# "Valarie Aguila" on 11/05/2001 08:40:32 AM To: Bob Shaw/LNOP/Michigan National Bank/US@MNB_US cc: Subject: Bankard Bob, We are trying to update our manual of business procedures regarding credit card processing. Could you tell me what the new name is for this division? Also, the help line that we have indicated is 1-800-848-3213. Has that changed? Please respond as soon as possible. Thanks! ***************************************************** Valarie K. Aguila Michigan State University Office of Financial Analysis 394 Administration Building East Lansing, Ml 48824 Ph. (517) 353-9259 x 1 Fax (517) 353-1706 e-mail: aguila@ctlr.msu.edu ***************************************************** MSU Manual of Business Procedures: Volume 1 Revised l- 1/Qg/Ql, Page ·l of 4 SECTION 17: CREDIT CARD ACCEPTANCE I. OVERVIEW II. SET-UP Ill. DEPOSITS IV. ASSOCIATED FEES V. HOW TO PROCESS CREDIT CARDS VI. LOANER MACHINES VII. WEB-BASED APPLICATION SECTION 17: CREDIT CARD ACCEPTANCE I. OVERVIEW The University does not accept credit cards for payment of tuition and housing costs. However, there are many other business applications and functions where accepting credit card payment is administratively justified. It can also be an important customer service benefit. The decision of whether or not to accept credit cards resides with each department. The Cashier's Office Manager can answer questions to help determine the cost-benefit issues related to this decision. The University has a centrally negotiated contract with a credit card processing company. This allows MSU to have a standardized rate structure, which simplifies budgeting and cost allocation. The Cashier's Office acts as a liaison between the departments, the processing company and occasionally, the credit card companies. MSU presently has contracts with VISA, MasterCard, American Express and Discover. The standard set-up includes only V /MC. A special request must be made for American Express or Discover. II. SET-UP A. Once the decision to accept credit cards is made, supply the following information to the Cashier's Office Manager via mail: 110 Administration Building, email: nelsonm@ctlr.msu.edu or fax: 353-9640. 1. Brief description of business/sales that will be processed using credit cards. 2. Contact person's name, mailing address, phone number and email address. MSU account number that will be charged for all applicable fees (see item IV) A "best guess" as to whether the majority of the sales will have the credit card present or not (i.e., mail or phone orders). If desired, special request for American Express and/or Discover. http:// ctlr .msu. edu/mbp/mbp 1 7 .htm 5/9/2002 MSU Manual of Business Procedures: Volume 1 Revised 11/08/01 Page2 of 4 B. Once this information is relayed to the processing company, the department/activity will be assigned a merchant number. The hardware and instruction manuals will be sent directly to the requesting department, usually within two weeks. The department must contact the processing company at 1-800- 848-3213 to activate the new merchant number. III. DEPOSITS To properly record charge card deposits, two separate deposit actions are required- one at the bank and one at MSU. A. The department must "settle" and transmit a Batch Summary Report each day. This sales revenue is credited (deposited) directly into MSU's general operating bank account. Follow the Merchant's Operating Guide instructions. B. To ensure that the sales revenue is allocated to the appropriate MSU ledger account, the department must submit a copy of the Batch Summary Report with a Departmental Deposit form (see MBP, Vol. I, Section 15, exhibit 15-A) to the Cashier's Office. Negative revenue: • In the event that a particular Batch Summary Report has a net credit (negative revenue), it should be submitted on the Departmen\¥i Deposit form with other positive revenue sources to offset it. he net _ revenue posted to any single account number on the ~ portion of the Departmental Deposit form must be a positive amoun!J • If this is not possible, the net credit Batch Summary Report (without a Departmental Deposit form) should be sent directly to the Cashier's Office Supervisor at 110 Administration Building. A Cash Paid-Out (CPO) entry will be created and a copy sent back to you. IV. ASSOCIATED FEES In addition to the one-time only set-up fees, MSU is charged a discount fee by the credit card processor and the bank to process credit card transactions. These fees are passed along to the department (merchant) accepting credit card payments. The Cashier's Office Supervisor generates a monthly journal voucher entry to charge each merchant for their share of the prior month's fees. Please contact the Cashier's Office manager or supervisor for the current rates of all applicable fees. A. Start up fees 1 1. Hardware -about $~00 2. Software - optional, about $500 3. Programming- about $.,2'5 l../0 B. On-going fees 1. Discount fees - vary by card-type and method of acceptance, but average 2.2% of gross sales. 2. Authorization fees - vary by card-type, but range from $.15-$.40 per authorization request 3. Transaction fees - Discover card only has a $.20 per transaction fee. http:// ctlr .msu. edu/mbp/mbp 1 7 .htm 5/9/2002 MSU Manual of Business Procedures: Volume 1 Revised 11/08/01 Page 3 of 4 C. Supplies 1. Should be ordered directly from ABN AMRO Merchant Services by calling their help line, 1-800-848-3213. 2. Will be included as a charge to the departmental account on the following month's JVE V. HOW TO PROCESS CREDIT CARDS Credit cards or the appropriate credit card information may be accepted in person, over the phone, through the mail, or through a secure web site. Processing requirements differ depending on whether the physical card is available. (Also, cardholders can enter their own information using a web-based application called G:vbereash™. See section VII below.) \Ju~ S';j" T~ An operating manual will be sent to each merchant. IT IS IMPORTANT THAT YOU READ THE MERCHANT'S OPERATING MANUAL. Some of the more pertinent procedures are: • Card does not swipe: If the credit card terminal cannot read the card, you must imprint the card on a carbonized paper sales draft using a manual card imprinter. • Mail/phone transactions : These are considered "high risk" because you cannot prove the user is the true cardholder, even if you receive a valid approval code. Follow the procedures carefully. • Deposits: Balance and transmit sales information daily (referred to as "settling the batch".) • Refunds: Must be processed as a credit to the cardholder's account, rather than cash or a check. • Access/Security: Cardholders numbers are confidential and should be handled accordingly. Access to the machine or software must be limited to authorized personnel. Specific processing questions should be directed to the credit card processor help and support team at 1-800-848-3213. VI. LOANER MACHINES There are occasions when a department has a limited need for accepting credit cards; for example, registration for a one-time only or once-a-year conference. In these cases, the Cashier's Office has three loaner machines available on a first-come, first-serve basis. There is $20 per month charge for use of the machine, and the department is responsible . These for the discount fees . J:lm=m~y,-sharg® will be prors4:ed fot pattim=month ~ fees will be included on the monthly NE. Contact the Cashier's Office Supervisor regarding availability and the sign-out process. (!... 3s-5- ~Z x 3 I\ 7 VII. WEB-BASED APPLICATION A. Overview MSU merchants who would like to offer goods and services for sale via a web site can use a software product called ~ T M to accept credit card payments in a secure environment. Use of ~a&k™ ensures that a cardholder' s number cannot be captured by anyone other than the intended merchant. Likewise, the http://ctlr.msu.edu/mbp/mbp 17 .htm 5/9/2002 MSU Manual of Business Procedures: Volume 1 Revised 11/08/01 Page 4 of 4 merchant is assured that the purchase is authorized and will be honored by the issuing bank. B. Set-up °\Jt.i, ,., "~ A €yberCa-& h™ set-up requires three-way cooperation between the requesting department, the Cashier's Office Manager and Administrative Information Services. 1. In addition to the list in item II above, the Cashier's Office needs to know a Merchant ID name - up to 25 characters, including spaces, that will identify you in the e,'tlerGash™ system. The time period for a €yseFCas h™ set-up is about three weeks. 2. AIS offers several options to help a department set up a €yssrCa1. h™ application. For more detail, please contact the AIS Help and Support Center at 353-4420 extension 311 or email to ais31 l @msu.edu or visit the web site ofhttp://www.ais.msu.edu/D5211/cybercas.htm.""'<..(-- The website offers an on-line merchant request form that we encourage you to use. C. Costs 'Jt,i, 5 ,, "' There is no hardware cost. However, EyberGas-k™ and the bank charge a $130 set-up fee and a $25 per month maintenance fee. The discount fees are the same as for the standard non-web application. In addition, there is a $.15 per authorization fee. These fees are charged to your department via the monthly JVE mentioned above. http:// ctlr .msu. edu/mbp/mbp 1 7 .htm 5/9/2002 MSU Manual of Business Procedures: Volume 1 Revised 11/6/00 c..:lvJfl / ~ - - - · · · - - SECTION 17: CREDIT CARD ACCEPTANCE I. II. III. IV. V. VI. VII. OVERVIEW SET-UP DEPOSITS ASSOCIATED FEES HOW TO PROCESS CREDIT CARDS LOANER MACHINES WEB-BASED APPLICATION ·· ··-······---·············-···--···- ······················-····················- - -···- -····-····--·--· ········-·······-········· .. ··········--······· ···········-······· . ·-······· ·- ·- ·············--···-·········-··········-···-·---······ ······-·-······· - -- SECTION 17: CREDIT CARD ACCEPTANCE I. OVERVIEW The University does not accept credit cards for payment of tuition and housing costs. However, there are many other business applications and functions where accepting credit card payment is administratively justified. It can also be an important customer service benefit. The decision of whether or not to accept credit cards resides with each department. The Cashier's Office Manager can answer questions to help determine the cost-benefi tA.ot. this decision. ,75J r ·' The University has a centrally negotiated contract with a credit card processing company. This allows MSU to have a standardized rate structure, which simplifies budgeting and cost allocation. The Cashier's Office acts as a liaison between the departments, the processing company and occasionally, the credit card companies. MSU presently has contracts with VISA, MasterCard, American Express and Discover. The standard set-up includes only V/MC. A special request must be made for American Express or Discover. · II. SET-UP A. Once the decision to accept credit cards is made, supply the following information to the Cashier's Office Manager via mail: 110 Administration Building, email: nelsonm@ctlr.msu.edu or fax: 353-9640. 1. Brief description of business/sales that will be processed using credit cards. 2. Contact person's name, mailing address, phone number and email address. 3. MSU account number that will be charged for all applicable fees (see item IV) 4. A "best guess" as to whether the majority of the sales will have the credit card present or not (i.e., mail or phone orders). 5. If desired, special request for American Express and/or Discover. http:// ctlr .msu. edu/mbp/mbp 1 7 .htm 05/15/2001 MSU Manual of Business Procedures: Volume 1 Revised 11/6/00 Page2 of 4 B. Once this information is relayed to the processing company, the department/activity will be assigned a merchant number. The hardware and instruction manuals will be sent directly to the requesting department, usually within two weeks. The department must contact the processing company at 1-800- 848-3213 to activate the new merchant number. III. DEPOSITS To properly record charge card deposits, two separate deposit actions are required - one at the bank and one at MSU. A. The department must "settle" and transmit a Batch Summary Report each day. This sales revenue is credited (deposited) directly into MSU's general operating bank account. Follow the Merchant's Operating Guide instructions. B. To ensure that the sales revenue is allocated to the appropriate MSU ledger account, the department must submit a copy of the Batch Summary Report with a Departmental Deposit form (see MBP, Vol. I, Section 15, exhibit 15-A) to the Cashier's Office. Negative revenue: • In the event that a particular Batch Summary Report has a net credit (negative revenue), it should be submitted on the Departmental Deposit form with other positive revenue sources to offset it. The net revenue posted to any single account number on the top portion of the Departmental Deposit form must be a positive amount. • If this is not possible, the net credit Batch Summary Report (without a Departmental Deposit form) should be sent directly to the Cashier's Office Supervisor at 110 Administration Building. A Cash Paid-Out (CPO) entry will be created and a copy sent back to you. IV. ASSOCIATED FEES In addition to the one-time only set-up fees, MSU is charged a discount fee by the credit card processor and the bank to process credit card transactions. These fees are passed along to the department (merchant) accepting credit card payments. The Cashier's Office Supervisor generates a monthly journal voucher entry to charge each merchant for their share of the prior month's fees. Please contact the Cashier's Office manager or supervisor for the current rates of all applicable fees. A. Start up fees 1. Hardware -about $600 2. Software - optional, about $500 3. Programming- about $25 B. On-going fees 1. Discount fees - vary by card-type and method of acceptance, but average 2.2% of gross sales. 2. Authorization fees - vary by card-type, but range from $.15-$.40 per authorization request 3. Transaction fees - Discover card only has a $.20 per transaction fee. http://ctlr.msu.edu/mbp/mbp 17 .htm 05/15/2001 MSU Manual of Business Procedures: Volume 1 Revised 11/6/00 V. HOW TO PROCESS CREDIT CARDS Credit cards or the appropriate credit card information may be accepted in person, over the phone, through the mail, or through a secure web site. Processing requirements differ depending on whether the physical card is available. (Also, cardholders can enter their 1 own information using a web-based application called CyberCashtm. below.) See section VII An operating manual will be sent to each merchant. IT IS IMPORTANT THAT YOU READ THE MERCHANT'S OPERATING MANUAL. Some of the more pertinent procedures are: • Card does not swipe: If the credit card terminal cannot read the card, you must imprint the card on a carbonized paper sales draft using a manual card imprinter. • Mail/phone transactions: These are considered "high risk" because you cannot prove the user is the true cardholder, even if you receive a valid approval code. Follow the procedures carefully. • Deposits: Balance and transmit sales information daily (referred to as "settling the batch".) • Refunds: Must be processed as a credit to the cardholder' s account, rather than cash or a check. • Access/Security: Cardholders numbers are confidential and should be handled accordingly. Access to the machine or software must be limited to authorized personnel. Specific processing questions should be directed to the credit card processor help and support team at 1-800-848-3213. VI. LOANER MACHINES There are occasions when a department has a limited need for accepting credit cards; for example, registration for a one-time only or once-a-year conference. In these cases, the Cashier's Office has 1*o loaner machines available on a first-come, first-serve basis. There is $20 per month charge for use of the machine, and the department is responsible for the discount fees. The monthly charge will be prorated for partial month usage. These fees will be included on the monthly JVE. Contact the Cashier's Office Supervisor regarding availability and the sign-out process. VII. WEB-BASED APPLICATION A. Overview MSU merchants who would like to offer goods and services for sale via a web site can use a software product called CyberCasH to accept credit card payments in a secure environment. Use of CyberCaslitr.P ensures that a cardholder' s number http://ctlr.msu.edu/mbp/mbp 17 .htm 05/15/2001 y \1SU Manual of Business Procedures: Volume 1 Revised 11/6/00 Page 4 of 4 cannot be captured by anyone other than the intended merchant. Likewise, the merchant is assured that the purchase is authorized and will be honored by the issuing bank. B. Set-up A CyberCasH ' set-up requires three-way cooperation between the requesting department, the Cashier's Office Manager and Administrative Information Services. 1. In addition to the list in item II above, the Cashier's Office needs to know a Merchant ID name - up to 25 characters, including spaces, that will identify you in the CyberCasli a CyberCashri,, set-up is about three weeks. system. The time period for a'.\ 2. AIS offers several options to help a department set up a CyberCas~ application. For more detail, please contact the AIS Help and Support Center at 353-4420 extension 311 or email to ais3 l 1@msu.edu. -/ f fl..+--r:I 0 C. Costs a{Fer Jr'\ " /,/\(:. fY\U y re l ( l e +h.d (JJ h m. ' Ovt' , V V • There is no hardware cost. However, CyberCasJitni and the bank charge a $130 set-up fee and a $25 per month maintenance fee. The discount fees are the same as for the standard non-web application. These fees are charged to your department via the monthly JVE mentioned above. ..y lfl o-i I (\ p ( (I ti I { http://ctlr.msu.edu/mbp/mbp 17 .htm 05/15/2001 MSU Manual of Business Procedures: Volume 1 Revised 9/6/01 Page 1 of 4 SECTION 17: CREDIT CARD ACCEPTANCE I. II. III. IV. V. VI. VII. ···························-·-·· OVERVIEW SET-UP DEPOSITS ASSOCIATED FEES HOW TO PROCESS CREDIT CARDS LOANER MACHINES WEB-BASED APPLICATION ··············-·· ·····-------------------·-·-··-····------···-······-·················-······························-··············-·- ··············-·······--··-·--·-·-······- . SECTION 17:. CREDIT CARD ACCEPTANCE I. OVERVIEW The University does not accept credit cards for payment of tuition and housing costs. However, there are many other business applications and functions where accepting credit card payment is administratively justified. It can also be an important customer service benefit. The decision of whether or not to accept credit cards resides with each department. The Cashier's Office Manager can answer questions to help determine the cost-benefit issues related to this decision. The University has a centrally negotiated contract with a credit card processing company. This allows MSU to have a standardized rate structure, which simplifies budgeting and cost allocation. The Cashier's Office acts as a liaison between the departments, the processing company and occasionally, the credit card companies. MSU presently has contracts with VISA, MasterCard, American Express and Discover. The standard set-up includes only V /MC. A special request must be made for American Express or Discover. II. SET-UP A. Once the decision to accept credit cards is made, supply the following information to the Cashier's Office Manager via mail: 110 Administration Building, email: nelsonm@ctlr.msu.edu or fax: 353-9640. 1. Brief description of business/sales that will be processed using credit cards. 2. Contact person's name, mailing address, phone number and email address. 3. MSU account number that will be charged for all applicable fees (see item IV) 4. A "best guess" as to whether the majority of the sales will have the credit card present or not (i.e., mail or phone orders). 5. If desired, special request for American Express and/or Discover. http ://ctlr.msu.edu/mbp/mbp 17 .htm 11/06/2001 MSU Manual of Business Procedures: Volume 1 Revised 9/6/01 Page 2 of 4 B. Once this information is relayed to the processing company, the department/activity will be assigned a merchant number. The hardware and instruction manuals will be sent directly to the requesting department, usually within two weeks. The department must contact the processing company at 1-800- 848-3213 to activate the new merchant number. III. DEPOSITS To properly record charge card deposits, two separate deposit actions are required - one at the bank and one at MSU. A. The department must "settle" and transmit a Batch Summary Report each day. This sales revenue is credited (deposited) directly into MSU's general operating bank account. Follow the Merchant's Operating Guide instructions. B. To ensure that the sales revenue is allocated to the appropriate MSU ledger account, the department must submit a copy of the Batch Summary Report with a Departmental Deposit form (see MBP, Vol. I, Section 15, exhibit 15-A) to the Cashier's Office. Negative revenue: • In the event that a particular Batch Summary Report has a net credit (negative revenue), it should be submitted on the Departmental Deposit form with other positive revenue sources to offset it. The net revenue posted to any single account number on the top portion of the Departmental Deposit form must be a positive amount. • If this is not possible, the net credit Batch Summary Report (without a Departmental Deposit form) should be sent directly to the Cashier's Office Supervisor at 110 Administration Building. A Cash Paid-Out (CPO) entry will be created and a copy sent back to you. IV. ASSOCIATED FEES In addition to the one-time only set-up fees, MSU is charged a discount fee by the credit card processor and the bank to process credit card transactions. These fees are passed along to the department (merchant) accepting credit card payments. The Cashier's Office Supervisor generates a monthly journal voucher entry to charge each merchant for their share of the prior month's fees. Please contact the Cashier's Office manager or supervisor for the current rates of all applicable fees. A. Start up fees 1. Hardware -about $600 2. Software - optional, about $500 3. Programming - about $25 B. On-going fees 1. Discount fees - vary by card-type and method of acceptance, but average 2.2% of gross sales. 2. Authorization fees - vary by card-type, but range from $ .15-$ .40 per authorization request 3. Transaction fees - Discover card only has a $.20 per transaction fee. http:// ctlr .msu. edu/mbp/mbp 1 7 .htm 11/06/2001 ·MSU Manual of Business Procedures: Volume 1 Revised 9/6/01 Page 3 of 4 C. Supplies ABN AM~O /J,.e.,cha.llt '6«v ,~$' 1. Should be ordered directly from Miebigai.::i. :Wa-tiottal Bm:ikan:i by calling their help line, 1-800-848-3213. 2. Will be included as a charge to the departmental account on the following month's NE V. HOW TO PROCESS CREDIT CARDS Credit cards or the appropriate credit card information may be accepted in person, over the phone, through the mail, or through a secure web site. Processing requirements differ depending on whether the physical card is available. (Also, cardholders can enter their own information using a web-based application called CyberCash™. See section VII below.) An operating manual will be sent to each merchant. IT IS IMPORTANT THAT YOU READ THE MERCHANT'S OPERATING MANUAL. Some of the more pertinent procedures are: • Card does not swipe: If the credit card terminal cannot read the card, you must imprint the card on a carbonized paper sales draft using a manual card imprinter. • Mail/phone transactions: These are considered "high risk" because you cannot prove the user is the true cardholder, even if you receive a valid approval code. Follow the procedures carefully. • Deposits: Balance and transmit sales information daily (referred to as "settling the batch".) • Refunds: Must be processed as a credit to the cardholder's account, rather than cash or a check. • Access/Security: Cardholders numbers are confidential and should be handled accordingly. Access to the machine or software must be limited to authorized personnel. Specific processing questions should be directed to the credit card processor help and support team at 1-800-848-3213. VI. LOANER MACHINES There are occasions when a department has a limited need for accepting credit cards; for example, registration for a one-time only or once-a-year conference. In these cases, the Cashier's Office has three loaner machines available on a first-come, first-serve basis. There is $20 per month charge for use of the machine, and the department is responsible for the discount fees. The monthly charge will be prorated for partial month usage. These fees will be included on the monthly NE. Contact the Cashier's Office Supervisor regarding availability and the sign-out process. VII. WEB-BASED APPLICATION A. Overview MSU merchants who would like to offer goods and services for sale via a web site can use a software product called CyberCash™ to accept credit card payments in a secure environment. Use of CyberCash™ ensures that a cardholder's number cannot be captured by anyone other than the intended merchant. Likewise, the http:// ctlr .msu. edu/mbp/mbp 1 7 .htm 11/06/2001 MSU Manual of Business Procedures: Volume 1 Revised 9/6/01 Page 4 of 4 merchant is assured that the purchase is authorized and will be honored by the issuing bank. B. Set-up A CyberCash™ set-up requires three-way cooperation between the requesting department, the Cashier's Office Manager and Administrative Information Services. 1. In addition to the list in item II above, the Cashier's Office needs to know a Merchant ID name - up to 25 characters, including spaces, that will identify you in the CyberCash™ system. The time period for a CyberCash™ set-up is about three weeks. 2. AIS offers several options to help a department set up a CyberCash™ application. For more detail, please contact the AIS Help and Support Center at 353-4420 extension 311 or email to ais3 l 1@msu.edu or visit the web site ofhttp://www.ais.msu.edu/D5211/cybercas.htm. The website offers an on-line merchant request form that we encourage you to use. C. Costs There is no hardware cost. However, CyberCash™ and the bank charge a $130 set-up fee and a $25 per month maintenance fee. The discount fees are the same as for the standard non-web application. In addition, there is a $.15 per authorization fee. These fees are charged to your department via the monthly JVE mentioned above. http:// ctlr .msu. edu/mbp/mbp 1 7 .htm 11/06/2001 Manual of Business Procedures, Volume I Temporary Procedures April 2002 Page 1 of 1 SECTION 30: Faculty/Staff Identification Cards All new staff members are issued an identification (ID) card at the new employee processing, benefits orientation in Human Resources. Current employees wishing to update an ID may apply for a card in Room 50 Administration Building (8 a.m. - 5 p.m., Monday through Friday), or in 30 Nisbet Building (4 p.m. - 5 p.m., Monday through Friday). An employee's spouse or qualified domestic partner is also eligible for an ID card. In the event of a name change, or if a card is lost or stolen, it will be replaced free of charge. Employees should keep their ID card with them while on campus. It may be used to establish identity for such privileges as use of Intramural buildings, libraries, the golf course, and other campus activities and facilities . www.reg.msu.edu/ROinfo/FSIDcard.asp http://ctlr.msu.edu/mbp/mbp3 0 .htm 5/8/2002 Manual of Business Procedures, Volume I Temporary Procedures 1/98 Page 1 of 1 ION 30: FACULTY STAFF ID CARDS -~· SE NEW OCEDURES IN EFFECT FOR ISSUING FACUL /STAFF ID'S t,( 4\", ../ ~ ;J1 10, 1997, Faculty and Staff ID cards have been produced utilizing digital imagery. Curr time, no services will b enied. tly valid old-format ID cards may continue to be used and as of this ID's FOR NEW FACULT at the Nisbet building or at the ND STAFF, will be provided at the employee's orientation gistrar's Office. ID cards will be made at the Registra' Office in 150 Administration Building (M-TH 8:00 - 6:00, and FRI 8:00 - 5:00) and by Hum . Resources in 30 Nisbet (M - F 4:00 - 5:00). INDIVIDUALS REPLACING EXPIRED LO FORMAT CARDS, AND THOSE WHO WOULD LIKE TO EXCHANGE OL CARDS FOR NEW ONES MAY DO SO BY VISITING EITHER OF THE ID OFF ES. A picture ID (driver's license, etc.) and the old ID are necessary for processing. Admim rators should indicate via memo to either processing office whether or not it is necessary employee's title and department to be present on the ID. r security purposes) for the Questions regarding this process can be directed to: Dugald McMillan Registrar's Office 353-4490 Gene Patterson Human Resources 432-4636 Ext. 109 Revised 1/98 \ http://ctlr.msu.edu/mbp/mbp3 0 .htm 3/29/02 SECTION 30: Faculty/Staff Identification Card All new staff members are issued an identification (ID) card at the new employee processing, benefits orientation in Human Resources. Current employees wishing to update an ID may apply for a card in Room 50 Administration Building (8 a.m. - 5 p.m. , Monday through Friday), or in 30 Nisbet Building ( 4 p.m. - 5 p.m., Monday through Friday). An employee' s spouse or qualified domestic partner is also eligible for an ID card. In the event of a name change, or if a card is lost or stolen, it will be replaced free of charge. Employees should keep their ID card with them while on campus. It may be used to establish identity for such privileges as use of Intramural buildings, libraries, the golf course, and other campus activities and facilities. MSU RO : Faculty/Staff Identification Card Page 1 of 1 Faculty /Staff Identification Card All new staff members are issued an identification (ID) card at the new employee processing, benefits orientation in Human Resources. If you are not a new employee but wish to update your ID, you may apply for a card in Room 50 Administration Building (8:00 a.m. - 5:00 p.m., Monday through Friday), or in 30 Nisbet Building (4:00 p.m. - 5:00 p.m., Monday through Friday). Your spouse or qualified domestic partner is also eligible for an ID card . In the event of a name change, or if your card is lost or stolen, it will be replaced free of charge. Keep your ID card with you while on campus. It may be used to establish identity for such privileges as use of intramural buildings, libraries, the golf course, and other campus activities and facilities. http://www.reg.rnsu.edu/ROinfo/FS IDcard.asp 3/29/02 Pat, J RE: Update to Risk Management and Insurance - Section 35. 1. Changes are in red. 2. Please change web document header to July 2001 3. Changes YTD memo - here is the wording to add there (i!]u_icJJ.c!-, · 'd 1· 1 · .c. d Add. · 1t10na m1ormat10n an gm e mes-a.uactr to item on mvers1ty property loss and damage (see item IV. Property). A listing of types of property loss not covered by insurance has been added. Also, note the statement on ~ responsibility for reporting property loss claims to Risk ~ana~r e~t and Insurance on a timely basis. U · · 4. Let me know when d ne, I'll have RMI proof. Thanks. IV. PROPERTY The University maintains property insurance to protect against the perils of fire, windstorm , explosion, vandalism, flood and other major exposures. Coverage is provided for loss or damage to University owned property, exclusive of vehicles, valued over $5,000 per item and listed on the equipment inventory, subject to a $5,000 deductible. Catastrophic losses exceeding $100,000 will be adjusted on a case by case basis and are not the subject of this policy. The following types of property loss are not covered by insurance: 1. Property Losses less than $5,000. in value. 2. Mechanical breakdown or electric disturbance to appliances, devices or machinery 3. Wear and Tear, gradual deterioration. Damage from insects or vermin 4. 5. Freezing of plumbing or heating systems or their appliances, or by leakage overflow from Inventory shortage. such systems while the building is vacant or unoccupied, unless the university has exercised due diligence in maintaining these systems in the building. 6. Damage sustained to property which is actually being worked upon or caused by repairing, adjusting, seNicing, or maintenance operations. 7. Loss or damage caused by or resulting from settling, subsidence, cracking, shrinking, bulging or expansion of pavement, foundations, walls, roofs, floors, and ceilings. 8. Loss or damage caused by or resulting from contamination or pollution, unless resulting from a covered cause of Joss. Internal labor costs. 9. A. Reporting Property Losses Immediately report cases of vandalism, fire and theft to the MSU Police Department. 1. 2. A written report outlining the circumstances of loss, date of loss, building and room number, steps taken to recover property, and a complete description of missing or damaged items must follow from the chairperson, director or authorized personnel (See Exhibit 35-J) or http:www.ctlr.msu.edu. Send copies of the report to the Office of Risk Management & Insurance and the Inventory Department. 3. Claims not submitted to Risk Management & Insurance within 30 days of discovery may not itL covered, and become the financial responsibility of the department or unit where the loss occurred. Submitted claims that are not fully documented within one year of discovery are also not covered. Note: See documentation required in "Recovering from a Major Property Loss." B. Adjustment of Property Losses Claims will be handled through the Office of Risk Management & Insurance using the following guidelines: 1. Damage claims - damaged items will generally be repaired . If the cost to repair is over 50% of the replacement value of the item, Risk Management & Insurance may elect to replace the item. 2. Theft or Mysterious Disappearance - claims will be held for 30 days from the date of report to allow time for the "missing" items to be recovered. If recovered items are damaged, the loss will then be treated as a damage claim. If items are not recovered settlement will be based on Actual Cash Value *. 3. Replacement Philosophy - when the property warrants replacement, the item will be replaced with either new or reconditioned items of like kind, quality, and specifications. Damaged equipment will be forwarded to Salvage. 4. Proof of replacement will be a copy of the purchase invoice or statement of account to document the amount incurred . *Actual Cash Value= Replacement Cost Less Depreciation S:\RM&I\MBP-PropertySectionrevisions MSU Manual of Business Procedures: Volume 1 Revi~ Page ·l of 1 1v. PROPERTY f~) 1) tA,f J OJtt HetAJ,,u-. The University maintains property insurance to protect against the perils of fire, windstorm, explosion, vandalism, sprinkler leakage and various other exposures. Coverage is provided for loss or damage to University owned property, exclusive of vehicles, valued over $5,000 per item and listed on the equipment inventory, subject to a $5,000 deductible. Catastrophic losses exceeding $100,000 will be adjusted on a case by case basis without regard to the inventory requirement. A. Reporting Property Losses 1. Immediately report cases of vandalism, fire and theft to the MSU Police Department. 2. A written report outlining the circumstances of loss, date of loss, building and room number, steps taken to recover property, and a complete description of missing or damaged items must follow from the chairperson, director or authorized personnel. Send copies of the report to the Office of Risk Management & Insurance and the Inventory Department. B. Adjustment of Property Losses Claims will be handled through the Office of Risk Management & Insurance using the following guidelines: 1. Damage claims - damaged items will generally be repaired. If the cost to repair is over 50% of the replacement value of the item, Risk Management & Insurance may elect to replace the item. 2. Theft or Mysterious Disappearance - claims will be held for 30 days from the date of report to allow time for the "missing" items to be recovered. If recovered items are damaged, the loss will then be treated as a damage claim. If items are not recovered settlement will be based on Actual Cash Value *. 3. Replacement Philosophy - when the property warrants replacement, the item will be replaced with either new or reconditioned items oflike kind, quality, and specifications. Damaged equipment will be forwarded to Salvage. 4. Proof of replacement will be a copy of the purchase invoice or statement of account to document the amount incurred. * Actual Cash Value = Replacement Cost Less Depreciation http://ctlr.msu.edu/mbp/mbp35.htm 7/19/2001 From: To: Date: Subject: Pat Fowler Stephanie Thelen 2/26/02 2:55PM Manual of Bus Proc Please revise Section 35, Ill., D. 2 to read: Rental expense for 12-15 passenger vans from outside agencies is not reimbursable . Thanks!- CC: Marge Toomey ADDITIONS TO MANUAL IN BOLD PRINT 2/25/02 III. AUTOMOTIVE A. University-Owned Vehicles 1. Automobile liability insurance provides coverage for the University and its authorized drivers (see Volume 1, Section 70 of the Manual of Business Procedures) for claims of negligence which result in damage to property of others or bodily injury to third parties within the limits of the Michigan No Fault Act. 2. Physical damage (collision) insurance covers damage to university owned vehicles, subject to a deductible amount determined annually. Funding of the physical damage deductible is usually the responsibility of the department; however, all accidents should be reported to the Office of Risk Management so that a claim may be filed if appropriate under the Michigan No-Fault Act. 3. University-owned vehicles may not be used by student clubs, student organizations, or non University groups unless approved by the Director of Planning & Budgets. B. Qualifications and Responsibilities of Drivers 1. A person driving a University-owned vehicle must have a valid U.S. or Canadian driver's license, be experienced in handling the type of vehicle requested, and must have a satisfactory driving record. The responsibility for enforcing these requirements rests with the Department Chairperson, or equivalent. NOTE: Departments may obtain driving records for their review. Contact the Office of Risk Management & Insurance regarding the process to obtain a driving record. 2. Employees (inch:1drng gradtiate assistattts) may be assigned and drive University vehicles on authorized trips. Non-employee students may drive only if accompanied in the same vehicle by an employee to whom the vehicle is assigned or if a special request for authorization to drive a University vehicle has been filed by the Department Chairperson and approved by the Director of Planning and Budgets. A. copy ofth.e approYal mtist be forwarded to Risk MattagemeHt & lHSHrattce. Authorized drivers for specific vehicles will be qualified by Transportation Services. 3. Drivers on University business travel are expected to observe all posted speed limits and to operate the vehicles in accordance with applicable laws and state regulations. 4. Consistent with Michigan law, drivers and all passengers in vehicles must wear safety belts. 5. While traveling one-way more than 300 miles before reaching the planned destination, the driver is responsible to see that at least one other passenger is authorized to and acts as a relief driver. Trips should be no longer than 10 driving hours per day. No itineraries should be planned which include driving between the hours of midnight and 4 a.m. Itineraries must be reviewed and approved by the sponsoring department. 6. Use of 15 passenger vans is restricted to a 15-mile campus radius. Travel on freeways/expressways is prohibited. 7. 15 Passenger van drivers must hold a Commercial Driver's License (COL) with passenger endorsement. Contact Transportation Services or Risk Management & Insurance regarding the process for obtaining a COL. Consistent with Michigan law, seatbelts must be worn by the driver and all occupants at all times. Failure to comply with the law may jeopardize insurance coverage. 8. Use of cargo carriers and trailers must be approved by Transportation Services. C. Privately Owned Vehicles 1. Individuals using privately owned vehicles on University business are responsible for obtaining adequate insurance to cover their legal responsibility. The University's Auto Liability insurance is excess of the owner's personal coverage. 2. The University does not carry physical damage insurance on a privately owned vehicle. D. Rental Vehicles 1. The University's auto liability coverage is excess of any other valid and collectible coverage. The University does not carry collision coverage for rental vehicles. 2. Rental expense for 15 passenger vans from outside agencies is not reimbursable. S/rm&i/micro/word/vanissues/additionstomanual.doc 2/25/02 To: Stephanie From: Becky Hicks Re: Website Form Descriptions On the right side are revised form descriptions for the RM&I forms section of the website (a few of the form descriptions will remain the same). The current descriptions are to the left. We also previously agreed in the "form name" column on the website all of the ex ... designations could be erased. If you have any questions please call Becky at local 187. Thank you . Current Descriptions Revised Descriptions Automobile Accident or Loss Notice Report Auto Accident report - MSU vehicle involved FTE Data Entry form Medical - MSU Health Team FTE data report Injury/Property Damage Report for Non-Employees No revision Healthcare Occurrence Report No revision MSU owned property - Proof of Loss Property/Equipment Damage Loss Report - MSU owned Request for Certificate of Insurance Extension MSUE - certificate of insurance request form Request for Certificate of Insurance Certificate of Insurance - request form Request Verification of Emp Med Prof Liab Medical Professional Liability Coverage - form to request proof of employee coverage Request Verification of student Prof Liab Coverage Medical Professional Liability Coverage for MSU Students - form to request proof of coverage Student Accident Report (Classroom/Lab/Academic Activity Accidents) No revision From: To: Date: Subject: Becky Hicks Marge Toomey 3/26/02 11 :38AM MBP update / Marge - I checked with Pat Fowler - the following change to our section of the Manual of Business Procedures can be included in the announcement you will be sending about other updates in the Manual there is no need for separate notification. Marge/Stephanie: Section 35. Ill. A. 3. should be changed to read as follows: Section 35. A. 3 University-owned vehicles may not be used by student clubs, student organizations, or non-University groups unless approved by the Director of Planning and Budgets. To obtain approval, complete the "Request for Non-Employee/Student/Agency Use of MSU Vehicle," per instructions on the form. This form is available at http://www.ctlr.msu .edu in Risk Management forms download. Marge/Stephanie - if you have any questions please let us know. Marge - in your description of what the change means - This form was created to expedite the approval process for student, non-employee, or agency use of MSU-owned vehicles. Becky A. Hicks, ARM Risk Management & Insurance Michigan State University 372 Administration Building East Lansing, Ml 48824-1046 Phone: 517-355-5022 ext 3 FAX: 517-432-3854 E-mail: hicksr@CTLR.msu.edu CC: Thelen Fowler, Patricia - MSU Risk Manager; Guerin, Sandra - Asst. Risk Mgr.; Stephanie MSU Manual of Business Procedures: Volume 1 Revised February 2002 Page 2 of5 \OY ~3\ylP sY B. Applicable coverage provides payment of all sums including defense costs, for which the University and the covered persons become legally liable to pay because of bodily injury to a third person, personal injury (i.e. - libel, slander or defamation of character), or damage to property of others arising out of the operations of the University. C. As a condition of coverage, those covered by the University's insurance program are required to cooperate fully en a continuous basis with the University Risk Manager and Attorneys in the management of claims. D. Reporting Accidents or Incidents I. Accidents/incidents on-campus resulting in injury or property damage must be reported to the Office of Risk Management and to the Department of Police and Public Safety. Accidents/incidents involving hazardous materials must immediately be reported to the Office of Risk Management, and to the Office of Radiological, Chemical & Biological Safety. 2. Off-campus accidents/incidents must be reported to the Office of Risk Management & Insurance as soon as possible, with a copy of the local police or investigator's report if available. 3. Forms to report accidents/incidents: fonn Stock order #140-25110, see exhibits 35-A and .B. or you can locate the forms at http: //ctlr.msu.edu/mbpimbp35.htm#EXHIBITS III. AUTOMOTIVE A. University-Owned Vehicles 1. Automobile liability insurance provides coverage for the University and its authorized drivers (see Volume 1, Section 70 of the Manual of Business Procedures) for claims of negligence which result in damage to property of others or bodily injury to third parties within the limits of the Michigan No-Fault Act. 2. Physical damage (collision) insurance covers damage to university owned vehicles, subject to a deductible amount determined annually. Funding of the physical damage deductible is usually the responsibility of the department; however, all accidents should be reported to the Office of Risk Management so that a claim may be filed if appropriate under the Michigan No-Fault Act. / 3. University-owned vehicles may not be used by student clubs, student organizations, or non-University groups unless approved by the Director of Planning & Budgets. A c013:,· eftke a1313r0val must b@ furwanled t0 the Office 0f. .RiskManagement&losmance. ~ o·h~~;,, C .:-;f~-():J•-', e ... ~/)/vt-.,_ -fAL ii /2,r_r'-s-l~ -f~r /) uY\ -~""-f/d7:I L..,_ /_$fz.J R,,.,f/A-1r~'Y'\"t._ Cf.Se-- ci. f- !h :::i q 11 ~Ji,,;_le.·. 11 ;er ;ri s/,-,.._,.r-,.;.,~ n, -tfta -A,;- 11'1. 11~ 1 ) f; r ('!\ () B. Qualifications and :8.esponsibil.ities of Drivers . tL I.) f-l ( ~ ,~:- ~ W"'·V W , t!...-f / r . /YI Sv<. • 9-&_c.,., II'\ . 1!!. .. _ f-,> ;- m.:. /) . ,. .,w,, ( c-.t 1. A person driving a University-owned vehicle must have a valid U.S. or Canadian driver's license, be experienced in handling the type of vehicle requested, and must have a satisfactory driving record. The responsibility for enforcing these requirements rests with the Department Chairperson, or equivalent. NOTE: Departments may obtain driving records for their review. Contact the Office of Risk Management & Insurance regarding the process to obtain a driving record. 2. Employees may be assigned and drive University vehicles on authorized trips. Non-employee students may drive only if accompanied in the same vehicle by an employee to whom the vehicle is assigned or if a special request for authorization to drive a University vehicle has been filed by the Department Chairperson and approved by the Director of Planning and Budgets. Authorized drivers for specific vehicles will be qualified by Transportation Services. 3. Drivers on University business travel are expected to observe all posted speed limits and to operate the vehicles in accordance with applicable laws and state regulations. 4. Consistent with Michigan law, drivers and all passengers in vehicles must wear safety belts. 5. While traveling one-way more than 300 miles before reaching the planned destination, the driver is responsible to see that at least one other passenger is authorized to and acts as a relief driver. Trips should be no longer than l 0 A http: //ctlr.msu.edu/mbp/mbp35 .htm 3/22/02 ·: .. ;··: MICHIGAN STATE UNIVERSITY REQUEST FOR NON-EMPLOYEE/STUDENT/AGENCY USE OF MSU VEHICLE Departments & Colleges - submit completed form to the Office of Planning and Budgets for review/approval. Agencies - submit a certificate of automobile liability insurance and completed form to the Office of Risk Management and Insurance who will forward to the Office of Planning and Budgets for review and approval. Office of Planning and Budgets will return the form to the contact person . The signed approval must be presented to Transportation Services in order to obtain an MSU vehicle. Department/College/Agency subm itting reques t : - - - - - - - - - - - - - - - - - - - - - - - - Contact Person : ____________________ Phone # _____ Email _____ _ Describe activity for which use of an MSU vehicle is needed : ___________________ _ Destination(s) ____________________________________ _ Travel Date(s): From To ______________ ~ Explain how this activity supports the mission of Michigan State University: ______________ _ Requestor's Signature: ___________________ Date: ___________ _ Insurance approval is applicable only to agency requests. Agency's proof of automobile liability insurance coverage reviewed and approved by: Office of Risk Management and Insurance Date Department/College/Agency request to use a University vehicle approved by: Office of Planning and Budgets Date S:/ RM&Udraft2-printfonn-agencies MSU Manual of Business Procedures: Volume 1 Revised March 1996 Page·l of 1 SECTION 43: LOST, STOLEN OR DESTROYED CHECKS In the event that a check is stolen, notify the appropriate office immediately. If the check is lost, please make a thorough search before notifying the appropriate office. If the check is a payroll check, notify the Payroll Department, 350 Administration Building, (phone: 355-5010). All other checks should be reported to the Accounting Department, 360 Administration Building, (phone: 355-5000). The following procedures will be followed: 1. The payee must contact the appropriate office in person and fill out a lost check form. 2. A stop payment is immediately placed on any check stolen and/or in excess of $300. 3. After the bank has confirmed that the check has not been cashed and a stop payment has been placed (if appropriate), a duplicate check will be issued. http:// ctlr .msu. edu/mbp/mbp43 .htm 8/31/2001 ge oomey - From: To: Date: Subject: Marge Toomey Aguila, Valarie; Douches, Julianna; Lynn, Pat; Twitchell, Chris 9/4/0111:47AM Manual Section 43 Do we want to do something about the following: Section 43: Lost, Stolen, or Destroyed Checks - there is no reference to Exhibits within the section. On our Forms Download feature on Controller's home page, the following are listed: Ex5h - Cancel Check Form Ex5i - Lost Check Form (Employee/Student) Ex5j - Lost Check (Vendor) Should a link be established at the bottom of Section 43 to the Exhibits - or is it better that we refer folks to these "exhibits" to avoid any confusion? Let me know if we need to "fix" something here. CC: Sober, Greg MBP Section 46 III. LODGING ARRANGEMENTS WITH UNIVERSITY HOUSING A. As a general rule, and in order to comply with federal tax withholding requirements, University accounts cannot be charged directly for the costs of University housing (Residence Halls and University Apartments). A department can make housing arrangements or reimburse individuals for housing expenses incurred as noted below in item C. Payment for housing should be made by the individual receiving the housing either through a direct payment by them or through a payroll deduction. B. There are two exceptions where the cost of the housing can be directly charged to an account on a JVE (see exhibit 46-G; departments may make copies of exhibit 46-G to use for this purpose): 1. When an individual meets the following federal tax rules which state that housing provided to employees is nontaxable if all of the following three conditions are met: a. The lodging is furnished on the business premises of the employer. b. The lodging is for the convenience of the employer. c. The employee must accept the lodging as a condition of employment. All departments that provide housing or make payments for housing, on behalf of an individual who meets the above criteria, must have prior approval and documentation on file with the Office of Financial Analysis (355-5029). 2. When an individual is in travel status . An individual is cons idered to be in travel status when away from their regular place of employment for business purposes . This would cover most individuals employed by other universities who are here as visiting scholars or visiting researchers as long as they are not on MSU's payroll. Enrolled MSU students and MSU employees are, by definition , not considered to be in travel status . NOTE: Nonresident alien visitors must have appropriate visa status to permit University payment of lodging expenses . For example, visitors entering the U.S. with a J1 or B1 visa status are eligible while those entering with B2 visa status must be in conformance with the limitations imposed by the Immigration and Naturalization Service . If lodging is provided to visitors with B2 visa status, a completed copy of the MSU form "CertificatiOri'for International Visitors Entering tfie U.S. With B1/WB1 or B2/WB2 Visa Status" (Exhibit 77-D) must be attached to the JVE submitted (Exhiqit 46-G). C. When a contract or agreement states that housing will be provided to an individual, and the individual does not meet the exceptions noted above, the fair market value of the housing should be determined and paid to the individual as follows : 1. Employees (anyone on the University payroll system) - Process on an Additional Payments Form through the payroll department (in calculating the amount, keep in mind the tax withholdings that may be processed against the payroll}. If the lodging is being temporarily provided for a new employee, see Moving Expenses, section 53. 2. Students - For graduate students under a fellowship , process as part of their fellowship award (see section 23). For undergraduate students and graduate students covered by a scholarship, process as part of their scholarship award through the Office of Financial Aid . 3. All Others - Contact the Office of Financial Analysis (355-5029). Flower Purchase Guidelines Page 1 of 2 / SECTION 48: FLOWER PURCHASE GUIDELINES FLOWER PURCHASE GUIDELINES The University has limited resources to carry out its teaching, research and service missions and is held accountable by the people of the State of Michigan for appropriate expenditure of its resources . With this in mind, discretion should always be used when expending University funds, regardless of source. Guidelines for the purchase of flowers are enumerated below. In the context of these guidelines, the use of the term flowers is used to denote flowers, planters, baskets or similar items. The provost or a vice president must approve any exception to these guidelines. As a general rule, University funds should not be used to purchase flowers for non-official functions, personal office decorations or for personal occasions such as birthdays, weddings or illnesses. Flowers should be purchased from discretionary or non-general fund sources whenever possible. Flower Purchase Guidelines Permit: A funeral arrangement (less than $75) for a deceased employee, adjunct faculty member, retired employee or major donor (Presidents Club or higher), their spouse/domestic partner and dependent children (Note - The lead department should coordinate sending flowers). A monetary contribution (up to $75) to a non-profit charity, research or educational organization is permitted in lieu of flowers when the family of the deceased so requests . Flowers for non-employees to further the mission of the University, as determined and approved by the Provost or associate/assistant provost, a vice president or associate/assistant vice president, a dean or associate/assistant dean or an equivalent separately reporting position. Flowers to faculty or staff to recognize significant professional achievement, as determined and approved by the Provost or associate/assistant provost, a vice president or associate/assistant vice president, a dean or associate/assistant dean or an equivalent separately reporting position. Flowers for University functions such as commencement, faculty, staff or student award ceremonies and official receptions. Holiday decorations ( e.g. Poinsettias) purchased only for public areas of buildings supported by the fee-paying general public (such as Breslin Center or Kellogg Center). Flowers for seminars and other events where the attendees are paying a registration fee, which covers the costs of the event. http:// ctlr .msu. edu/mbp/mbp48 .htm 12/21/2000 MSU Manual of Business Procedures: Volume 1 Revised March 2001 responsibility for resolving the matter rests with the employee. J ~ } u / ()Iv qjtD sv · Page 3 of 2. Expenses limited to transportation and lodging (not including meals) while traveling from the former home to the new home may be paid. Expenses are limited to one trip for both the new employee and each household member. a. If transportation is by car, actual expenses (e.g. gas, oil, tolls) may be reimbursed by using a Reimbursement Voucher; receipts must be submitted. b. Alternatively, car expenses can be reimbursed (using a Reimbursement Voucher) at the rate of $0.12 per mile driven, plus tolls. The total mileage driven, as well as the origination and destination, must be documented on the voucher. The $0.22 differential from MSU's mileage per diem (currently $0.34 per mile) can be submitted as "taxable moving expense" on an Additional Payments Form (see item G below). c. Payment of expenses for any trip in excess of the one trip limitation must be processed through th Payroll Division as described in item G below. 3. Meal expenses, limited to meal per diem amounts, ARE NOT included in the definition of non taxable moving expense payments. If the department has agreed to reimburse meal per diems while traveling from the former home to the new home, such amounts must be included on an Additional Payments Form as described in item G below. //1.. 4. In accordance with current IRS regulations, ';non-taxable" moving expense payments paid directly to the employee must be noted on Form W-2 (Box 13, Code P); however, these expenses are not reported as wages and are not subject to income tax withholding. G. Taxable moving expense payments are payments of expenses other than those listed in item E and should be processed as follows: 1. Payment to the employee for expenses that do not meet the definition of non-taxable moving expense must be handled on a reimbursement basis. Reimbursement to the employee for these expenses must be paid on an Additional Payments Form as a lump-sum payment. The earnings type "MIS" should be used for all taxable moving expense reimbursements and the "comments" section should provide detail regarding the reimbursement. 2. Taxable moving expenses will be subject to withholding of income tax and FICA/Medicare tax, and will be reported on the employee's Form W-2. Withholdings for federal, state, and FICA tax will approximate 40%. 3. These expenses should be charged to a General Fund salary or labor account or other appropriate non General Fund account. 4. The Additional Payments Form is to be submitted to the Payroll Division, 350 Administration Building. Original receipts and documentation for reimbursements submitted on the payment form must be maintained by the department and copies must be attached to the Additional Payments Form. 5. The payment to the employee will be issued with the next scheduled salary payroll. 6. Taxable moving expenses should be reported on the form "Employee Moving Expense Information". IV~ FOREIGN MOVING EXPENSES http://ctlr.msu.edu/mbp/mbp53 .htm 09/10/200 MSU Manual of Business Procedures: Volume 1 Revised September 1998 Page·3 of 4 -fl) ~3 However, if the new employee pays the expenses (expenses limited to moving household goods and personal items or storage), the employee may be reimbursed on a Reimbursement Voucher. This information should be reported on the form, "Employee Moving Expense Information" .. 2. Expenses limited to transportation and lodging (not including meals) while traveling from the former home to the new home may be paid. Expenses are limited to one trip for both the new employee and each household member. 3. Meal expenses, limited to meal per diem amounts, ARE NOT included in the definition of non-taxable moving expense payments. If the department has agreed to reimburse meal per diems while traveling from the former home to the new home, such amounts must be included on an Additional Payments Form as described in item G below. 4. In accordance with current IRS regulations, "non-taxable" moving expense payments paid directly to the employee must be noted on Form W-2 (Box 13, Code P); however, these expenses are not reported as wages and are not subject to income tax withholding. G. Taxable moving expense payments are payments of expenses other than those listed in item E and should be processed as follows: 1. Payment to the employee for expenses that do not meet the definition of non-taxable moving expense must be handled on a reimbursement basis. Reimbursement to the employee for these expenses must be paid on an Additional Payments Form as a lump sum payment. The earnings type "MIS" should be used for all taxable moving expense reimbursements and the "comments" section should provide detail regarding the reimbursement. 2. Taxable moving expenses will be subject to withholding of income tax and FICA/Medicare tax, and will be reported on the employee's Form W-2. Withholdings for federal, state, and FICA tax will approximate 40%. 3. These expenses should be charged to a General Fund salary or labor account or other appropriate non-General Fund account. 4. The Additional Payments Form is to be submitted to the Payroll Division, 350 Administration Building. Original receipts and documentation for reimbursements submitted on the payment form must be maintained by the department and copies must be attached to the Additional Payments Form. http:// ctlr .msu. edu/mbp/mbp5 3 .htm 12/04/2000 MSU Manual of Business Procedures: Volume 1 Revised S@pteffiaer 1998 Page -1 of 4 SECTION 53: MOVING EXPENSES I. ELIGIBILITY II. AMOUNT III. PAYMENT IV. FOREIGN MOVING EXPENSES V. EXHIBITS SECTION 53: MOVING EXPENSES I. ELIGIBILITY Faculty (at the rank of instructor and above), academic, professional, and executive management staff who are either new or reassigned and are moving from outside a radius of 50 miles to the MSU work location. Reimbursement for actual moving expenses is not an entitlement; in all cases, it is an option to be agreed between the unit administrator(s) and the prospective faculty/staff member. II.AMOUNT Up to $10,000 with the recommendation and approval of the dean. Amounts exceeding $10,000 must be approved by the Provost (or designate) or the Vice President for Finance and Operations (or designate). An MAU or unit may establish a more restrictive moving expense policy and may limit moving expenses as deemed appropriate. Prior to agreeing on any dollar amount of expenses for moving household and personal items to be paid to or on behalf of an employee, units are encouraged to request that bids be submitted by the employee from moving companies. For interstate moves, one bid is sufficient; for intrastate moves, two or three bids should suffice. The moving company sel_ected (normally the lowest bidder) should be acceptable to both the new employee and to the _,..\, fo'lJ' ~ umt. <'c.J ,rfllt..11~ A YMENT ~~r A. For a new employee, payroll forms must be completed before moving expenses can be processed for payment. This includes providing the Payroll Division with a completed Form W-4 and a copy of the employee's social security card. (More detailed payroll procedures are provided in Section 55 of this Manual.) B. The Payroll Division will review all moving expenses (taxable and non-taxable) prior to payment. The Employee Moving Expense Information (see exhibit 53-A), along with a Direct Payment/Reimbursement Voucher and/or Additional Payments Form, must be approved by the Payroll Division before payments are processed. http:// ctlr .msu. edu/mbp/mbp5 3 .htm 11/22/99 Various moving companies provide discounts to the University. For more information, contact the MSU Purchasing Department (www.purchasing.msu.edu). MSU Manual of Business Procedures: Volume 1 Revised September 1998 Page 2 of 4 C. Departments are required to fill out the form, "Employee Moving Expense Information." If payments/reimbursements are submitted incrementally, an amended Employee Moving Expense Information form must accompany each subsequent payment/reimbursement. Departments are responsible for ensuring that the total amount submitted for moving expense does not exceed the negotiated amount and that the proper approval is obtained for amounts exceeding $10,000. D. The correct method for paying moving expenses depends upon the nature of the expenses. The method used for a particular expense is determined by the Internal Revenue Service (IRS) classification of the expense payment as either "non-taxable" or "taxable". E. Determination of Non-Taxable Moving Expense Payments: 1. Non-taxable moving expense payments are specifically identified by the IRS as employer payments of the following: a. Expenses limited to moving household goods and personal items, and expenses of storing and insuring household and personal effects for a single consecutive 30- day period, and/or b. Expenses limited to transportation and lodging (not including meals) while traveling from the former home to the new home (including the day of arrival). 2. In addition to what is outlined in the preceding categories, non-taxable moving expense payments must also meet the following conditions: a. The new MSU work location is at least 50 miles from the individual's former home. b. The expenses are incurred within one year from the date the individual begins work and are properly submitted for payment/reimbursement within 30 days of being incurred. c. The new employee's employment relationship with MSU must be full time at the new MSU work location and the department must expect the employment relationship to last a minimum of 39 weeks during the 12 months immediately following the move. If the moving expenses either do not fall into the two categories listed under item E.1., or they do not meet the three qualifying conditions listed under item E.2., the expense payments do not qualify as non-taxable moving expense payments and must be paid as described in item G. F. Payment of non-taxable moving expenses may be made by Direct Payment or Reimbursement Voucher, as appropriate. Documentation (e.g. invoices, paid receipts, tickets) typically required for voucher payments should be submitted with the voucher. These payments must be charged against a General Fund supplies and services account or other appropriate non-General Fund account. The reason for the payment should be clearly described as "moving expenses for an employee." 1. Expenses limited to moving household goods and personal items and storage or insuring household and personal effects for a single 30-day period may be paid by a Direct Payment Voucher when payment is made directly to a moving/storage company. {;._'\ ~ -?;J/>5V\i(--Y\uv la1:5~ ~ http://ctlr.msu.edu/mbp/mbp53.htm 02/15/2001 Although the payment is made directly to the moving company, the unit should not contract directly with the moving company. The individual employee remains responsible for negotiating and contracting with the moving company. arises between the moving company and the employee, responsibility for resolving the matter rests with the employee. In the event a dispute MICHIGAN STATE UNIVERSITY March 6, 2001 TO: David Hartman CO Systems Development FROM: Julianna Douche~ n, Payroll Division l.J RE: Changes to Manual Bus. Procedures Please make the attached changes to the Manual of Business Procedures (Section 53, Moving Expenses). If you have any questions, please contact me. Thank you. ~Gr'c:f ~ . .1.. ~q - 3 ) l, / 0 \ 5 OFFICE OF THE CONTROLLER Payroll Division Michigan State University 350 Administration Building East Lansing, Ml 48824-1046 517/355-5010 FAX: 517/353-1706 http://ctlr.msu.edu/payroll/ MSU is an affirmative-action, equal-opportunity inst,iution. MSU Manual of Business Procedures: Volume 1 Revised July 1999 • · Page 1 of 1 I. Q l ( V \.9 J, SECTION 55: PAYROLL DEPARTMENT I. DETERMINING EMPLOYMENT STATUS - EMPLOYEE VERSUS INDEPENDENT CONTRACTO~ A. Employee B. Independent Contractors II. UNIVERSITYPAYROLLS Information Required for Payroll Processing A. Pay and Pay Dates B. C. Optional Forms D. Appointment and Hiring E. Forms Required for Payroll Processing F. Rate of Pay G. Deadline for Submitting Payroll Information and Changes H. Distribution of Checks I. Checks Not Distributed with Regular Payroll J. Checks Not Prepared with Regular Payroll K . Payroll Petty Cash Checks (Hand-Drawn Checks) L. Final Payments to Terminated Employees M. Record of Hours Worked N. Retention of Records q 1 i r I 01 6y;q ~ I' l q (\/ )l III. FICA WITHHOLDING INFORMATION IV. CHANGES IN NAME AND/OR ADDRESS AND CORRECTION OF SOCIAL SECURITY NUMBER ERRORS A. Change of Name B. Change of Payroll Address C. Correcting E1rnrs in Social Security Number V. COMPENSATION FOR NONREGULAR ASSIGNMENTS OR DUTIES A. Overtime B. Compensation for Services Apart from Regular Work Assignments C. Military Pay D. Jury Duty E. Court Witness Fees VI. SPECIAL HANDLING VII. EXH IBITS SECTION 55: PAYROLL DEPARTMENT I. DETERMINING EMPLOYMENT STATUS - EMPLOYEE VERSUS INDEPENDENT CONTRACTOR A. Employee 1. Every individual performing services for the University and compensated by the University is presumed to be an employee unless she/he can meet the criteria of independent contractor status ( discussed in item LB.). Generally, every individual who performs services that are subject to the will and control of the http://ctlr.msu.edu/mbp/mbp5 5 .htm 09/04/200 MSU Manual of Business Procedures: Volume 1 Revised July 1999 · Page 2 of 1 University, as to both what must be done and how it must be done, is an employee. It does not matter that the University allows the employee considerable discretion and freedom of action, as long as the University has the legal right to control both the method and the result of the services. 2. University policy requires that the following workers be compensated as employees: a. Anyone teaching a course for credit. b. Generally, anyone teaching a noncredit course (see Section 76 for guidelines on determining if independent contractor status is appropriate). c. Anyone currently employed by the University who performs additional services outside his/her regular job description. d. Anyone currently emolled as a University student. 3. The status of any worker not falling into one of the above categories must be evaluated based on the Internal Revenue Service common law rules for distinguishing between employees and independent contractors. B. Independent Contractors 1. The general rule of thumb is that an individual is an independent contractor if the University has the legal right to control or direct only the result of the work and not the means and methods of accomplishin the result. Generally, independent contractors hold themselves out in their own names as self-employed and make their services available to the public. 2. Examples of individuals who might meet the criteria for independent contractor status include: a. Guest performers or artists who otherwise are not affiliated with the University. b. Guest speakers or guest lecturers brought to the University for very short durations because of their expertise. c. Individuals providing professional services, such as attorneys, accountants and other consultants. 3. See Section 76 for instructions for processing independent contractors. 4. When the status of a worker cannot be determined from the above guidelines, contact the Payroll Department (355-5010) or Accounts Payable (353-2011) for guidance prior to the services being performed. II. UNIVERSITY PAYROLLS A. Pay and Pay Dates 1. Academic and salaried support staff - Employees under these classifications are paid on a monthly payroll ending the last day of the month. Paychecks are distributed on the last working day of the month. 2. Graduate Assistants - Graduate assistants are paid on a monthly payroll ending on the 15th of the month. Paychecks are distributed on the 15th of the month or on the last working day before the 15th. http://ctlr.msu.edu/mbp/mbp5 5 .htm 09/04/200 MSU Manual of Business Procedures: Volume 1 Revised July 1999 · Page 3 of 1 3. Hourly employees -Regular hourly employees and clerical-technical employees are paid on a biweekly payroll. 4. Student employees - Student employees are paid in the same manner as hourly employees except that the student payroll date falls on alternate weeks. B. Information Required for Payroll Processing 1. Form W-4 (Federal), Employee's Withholding Allowance Certificate and Form MI-W4 (State of Michigan), Employee's Michigan Withholding Allowance Certificate. a. Form W-4 (Federal) and Form MI-W4 (State of Michigan) must be filed by every employee (see exhibit 55-A and exhibit 55-B). Federal and state laws require that the employee complete the form in its entirety. If an employee does not complete both Form W-4 and Form MI-W 4, withholdings will be taken from the employee's earnings at the highest withholding rate (i.e., single marital status, zero exemptions). b. The employee must file a new Form W-4 and/or Form MI-W4 each time the employee wishes to increase or decrease the number of exemptions claimed or to have additional amounts withheld per pay period. Note: Form W-4 is used for federal tax withholding purposes and Form MI-W4 is used for State of Michigan tax withholding purposes. c. Employees requesting tax withholding for Michigan city income tax may file Form CW-4, Withholding Certificate for City Income Tax (see exhibit 55-C). 2. Verification of Social Security Card Information All University employees must present a valid social security card at the time they are processed for employment in order to be paid. The University is required by federal law to pay its employees under the exact name and number that appear on the social security card. Because of this requirement, the Payroll Department will not release an employee's paycheck until the information on the social security card has been verified. 3. Nonresident Alien Employees a. Nonresident alien employees should present their visas in the Payroll Department to determine if they may be eligible for exemption from federal, state and/or FICA withholding taxes. b. Changes in residency status should be reported to the employing department and processed through the appropriate personnel office. The employee also should bring the appropriate documentation of change in residency status to the Payroll Department to change his/her tax withholding status. C. Optional Forms 1. Direct Deposit Authorization Employees may have their paychecks directly deposited into personal checking or savings accounts by completing the Direct Deposit Authorization card (see exhibit 55-D). Employees who desire this service should also contact the financial institution and advise them that their paychecks are to be direct deposited. http://ctlr.msu.edu/mbp/mbp5 5 .htm 2. Employees wishing to participate in employee benefit programs such as retirement, health, accident and 09/04/200 MSU Manual of Business Procedures: Volume 1 Revised July 1999 , Page 4 of 1 life insurance, etc., should contact the Benefits Office. D. Appointment and Hiring 1. Academic Appointments All academic appointments are processed through the Office of Planning and Budgets. Each academic employee is required to complete Forms W-4 and MI-W4, and present a valid social security card for verification of name and social security number. If Forms W-4, MI-W4 and social security number verification are not submitted by the department, the employee must complete this information in the Payroll Department, 350 Administration Building. Departments are requested to notify new staff members of this requirement. 2. Salaried Support Staff and Hourly Employees All employees under these classifications are processed by the Office of Human Resource Services, where the required forms are completed and forwarded to the Payroll Department. 3. Graduate Assistant Appointments All graduate assistants must be registered in order to hold an assistantship and be paid on the graduate assistant payroll. If Forms W-4 and MI-W4 and social security number verification are not submitted by the department, the employee must complete this information in the Payroll Department, 350 Administration Building. Departments are requested to notify new graduate assistants of this requirement. 4. Student Employees a. All University students compensated for services rendered must be paid through the Payroll Department. Direct Payment Vouchers or other payment mechanisms should not be used. b. Departments are responsible for obtaining the completed Forms W-4, MI-W4 and for verifying social security information. Departments must submit the information to the Student Employment Office, together with the Student Employment Application (Stores stock order #140-25780). For further details on hiring student employees, see the Student Employment Manual prepared by the Student Employment Office. c. University student employees retain their student status between semesters until the degree sought is obtained. E. Forms Required for Payroll Processing 1. Academic, Graduate Assistants, Salaried Support Staff, and Clerical-Technical a. Payrolls are prepared automatically from appointment and personnel forms/reports. b. Departments are responsible for reconciling all employees' time. Any factors that would alter an employee's compensation, such as termination, leave without pay or days lost without pay, should be reported to the appropriate personnel office immediately. Pay adjustments due to overtime should be processed as outlined in item V. of this section. 2. Hourly Employees (excluding Clerical-Technical) http://ctlr.msu.edu/mbp/mbp5 5 .htm 09/04/200 MSU Manual of Business Procedures: Volume 1 Revised July 1999 · Page 5 of 1 a. Preprinted blue "Payroll Time Report" for Biweekly Labor Payroll (see exhibit 55-E). Employees who have been authorized by the Office of Human Resource Services, and have received a paycheck in the last four months, will appear on a preprinted Payroll time report. Enter an X in the first column next to the name of each employee who is to be paid. Enter the number of hours worked for the pay period. Fractional hours are to be rounded up to the nearest tenth of an hour. For example, 3 hours and 24 minutes should be recorded as 3.4 hours. Review the other information printed for each employee. If a one-time change is required, cross out incorrect data and write correct data above. Initial all changes. Permanent changes require filing a Personnel Action Notice (PAN) form with the Office of Human Resource Services. Items that can be changed include: earnings type, rate of pay, account number, and department number. Draw a thick line through the information for each employee who is not to be paid for the pay period. Add the total number of hours, the total rates, and the number of employees to be paid. Enter these totals in the appropriate boxes. The time report must have the handwritten signature of the Unit Administrator or someone authorized to sign on all accounts listed on the time report. b. Blank blue "Labor Payroll Time Report" (see exhibit 55-F). A blank Labor Payroll Time Report may be used to pay employees who do not appear on the preprinted time reports and to pay unusual payments, e.g., late, overtime, and retroactive pay. To complete the blank Labor Payroll Time Report, enter the name and social security number of the employee, as well as other information per the instructions printed on the form. The name must be the same as it appears on the employee's social security card. Add the total number of hours, the total rates, and the number of employees to be paid. Enter these totals in the appropriate boxes. The time report must have the handwritten signature of the Unit Administrator or someone authorized to sign on all accounts listed on the time report. 3. Student Employees a. Preprinted green "Payroll Time Report" for Biweekly Student Payroll (see exhibit 55-G). Students who have been authorized by the Student Employment Office, and have been paid in the last four months, will appear on a preprinted Payroll Time Report. Enter an "X" in the first column next to the name of each student who is to be paid. Enter the number of hours worked for the pay period. Fractional hours are to be rounded up to the nearest tenth of an hour. For example, 3 hours and 24 minutes should be recorded as 3 .4 hours. Review the other information printed for each student. Make changes where necessary and initial each change. Items that can be changed include: earnings type, rate of pay, account number, and department number. Draw a thick line through the information for each student who is not to be paid for the pay period. b. Blank green "Student Payroll Time Report" (see exhibit 55-H). http://ctlr.msu.edu/mbp/mbp5 5 .htm 09/04/200 MSU Manual of Business Procedures: Volume 1 Revised July 1999 · Page 6 of 1 This form may be used to pay student employees who do not appear on the preprinted time reports and to pay unusual payments, e.g., late and retroactive pay. To complete the blank Student Payroll Time Report, enter the name and social security number of the student (these must be the same as they appear on the student's social security card), as well as all other information per the instructions printed on the form. If a student employee is new to the payroll, his/her student number should be entered in the last column of the time report. Add the total number of hours, the total rates, and the number of students to be paid. Enter these totals in the appropriate boxes. The time report must have the handwritten signature of the unit administrator or someone authorized to sign on all accounts listed on the time report. University student employees must be enrolled and attending classes to be eligible for payment. To ensure that students are enrolled, the time reports are compared to the Registrar's current enrollment records. Students who have gained employment by assuring the department they will enroll must enroll promptly or be terminated. F. Rate of Pay 1. Academic a. Rate of pay is determined from the appointment form. b. Rate changes are made on the basis of new appointment forms or "Change of Status Recommendation" forms and must be approved by the Provost and Board of Trustees. c. Tb.e IQRU~ '1re ,mailable in Raarn 64 Adroiuistratiau Building 2. Graduate Assistants a. Rate of pay is determined from the appointment form. b. Rate changes are made on the basis of an amended or new appointment form. c. Ths forms ai'S availa-els iH R00ffi 64 A0ffiiHistra-ti0H Bl:lilaiH:g aH:d aH:litte vfith ~rmned tteee&S. 3. Salaried Support Staff - Rate of pay is approved and provided to the Payroll Department by the Office of Human Resource Services. 4. Hourly Employees - Rate changes for hourly employees are approved by Human Resource Services and provided to the Payroll Department. Time reports will not reflect a new rate until approved and processed by Human Resource Services. 5. Student Employees - Job classification and grade level must be reported to the Student Employment Office using the "Student Employee Change of Status" form (see "Student Employment Manual" prepared by the Student Employment Office). G. Deadline for Submitting Payroll Information and Changes 1. Time Reports http://ctlr.msu.edu/mbp/mbp5 5 .htm 09/04/200 MSU Manual of Business Procedures: Volume 1 Revised July 1999 · Page 7 of 1 a. Biweekly pay periods for hourly and student employees end on Sunday at midnight. Payroll time reports for hourly employees, excluding clerical-technical, must be delivered to the Payroll Department by 10:00 a.m. the following Wednesday morning. When a short week occurs, specific instructions will be issued by the Payroll Department regarding the deadline. b. Time reports received after 10:00 a.m. on Wednesday will be held and processed with the next biweekly payroll. 2. Employment data information for salaried employees must be received in the appropriate personnel office on or before the 15th of the month in which the employee is to be paid in order for the Payroll Department to process the employee's check with the current payroll. 3. Employment data information for graduate assistants must be received in the Office of Planning and Budgets on or before the 1st of the month in which the employee is to be paid in order for the Payroll Department to process the employee's check with the current payroll. 4. Except for direct deposit authorizations, all changes in exemptions and payroll deductions must be processed according to the above dates to be effective with the current payroll. H. Distribution of Checks 1. Direct Deposit a. Employees may have their checks directly deposited into their ersonal checking or savings account by completing a "Direct Deposit Authorization" form (s e exhibit 55-D). This form may be completed at the Payroll Department, or at the MSU Federal Cr dit Union for direct deposits at that institution. Completed direct deposit cards received in Payroll t n (10) days prior to the paydate will become effective for the current month pay date. Cards received after this time will be effective for the following payroll. ~ b. Checks for these employees will be deposited into their bank accounts on the morning of payday. The employee will receive a "Direct Deposit Notification" showing gross pay, itemized deductions and net pay dei:osited. ( (o \ ~\~ ' I c. Direct deposit ay be discontinued if the Payroll Department has received the notice for salaried employees ten (1 ) days prior to the pay date. d. The time frames discussed above remain in effect when changing your direct deposit to a different bank. To avoid confusion, please contact the Payroll Department at 355-5010 with any questions. 2. Distribution to Departments a. Checks are picked up by the Campus Mail Service for delivery to the departments. b. Checks or Direct Deposit Notifications should be handed directly to the payee or placed in sealed envelopes for delivery by a designated employee. c. Payroll checks that must be canceled and rewritten due to any of the following reasons should be delivered immediately to the Payroll Department, 350 Administration Building: 1) Late termination. 2) Leave of absence without pay. http://ctlr.msu.edu/mbp/mbp55.htm 09/04/200 MSU Manual of Business Procedures: Volume 1 Revised July 1999 · Page 8 of 1 3) Too many hours submitted for a Student or Hourly employee. d. Payroll checks not delivered to employees within ten days should be returned to the Payroll Department with a memo indicating the reason why the employee did not receive the check. The Payroll Department will attempt to locate the employee and deliver the check. I. Checks Not Distributed with Regular Payroll 1. Checks will be held in the Payroll Department and not distributed on payday for the following reasons: a. The Payroll Department has not received verification of the employee's social security number. b. The various personnel offices may have employees' checks held for the following: 1) The employee is not authorized to be paid on the submitted account number. 2) INS Form I-9 information has not been completed. 3) A student employee (including graduate assistants) is not currently enrolled. Note that student employees who were enrolled during Spring semester and expect to be enrolled during Fall semester may work Summer semester without being enrolled. 2. When a paycheck is held, a "Hold Notice" is sent in lieu of the paycheck. The Hold Notice explains why the check was held and how the employee may obtain its release. J. Checks Not Prepared with Regular Payroll 1. A check may not be prepared due to the following reasons: a. Employment data for non-hourly employees was received in the appropriate personnel office after the processing deadline. b. Hourly or student employee time reports received after the processing deadline. c. Student employee was not registered for the current semester or student authorization was not properly completed. d. Graduate assistant was not registered for the current semester. 2. Once the required information and processing are completed, a petty cash check may be obtained per the guidelines below. K. Payroll Petty Cash Checks (Hand-Drawn Checks) Petty Cash Checks - Employees failing to receive a check on the expected pay date may obtain a petty cash check for wages earned. An appointment form, approved personnel information, or authorized time report must be on file in the Payroll Department before a petty cash check can be issued. Departments will be charged a $25.00 processing fee for all petty cash checks. Because of required processing time, a petty cash check generally is available to an employee 24 hours after the request is received by the Payroll Department. L. Final Payments to Terminated Employees http://ctlr.msu.edu/mbp/mbp5 5 .htm 09/04/200 MSU Manual of Business Procedures: Volume 1 Revised July 1999 · Page 9 of 1 1. Academic Employees When an employee terminates employment prior to the ending date of his/her appointment, the employing department must process the required documents for termination through the Office of Planning and Budgets. The Payroll Department is notified of terminations for academic employees by the Office of Planning and Budgets. To avoid an overpayment to the employee, the termination notification should be submitted in sufficient time to allow processing by the Office of Planning and Budgets and the Payroll Department. 2. Support Staff a. The employing department must submit a Personnel Action Notice (PAN) form to the Office of Human Resource Services when an employee terminates employment. Information to be submitted with the PAN form includes the last day worked, number of hours worked on the last day, effective date of termination, vacation balance, and any absences not reported on the most recent attendance report. The Payroll Department is notified of terminations by the Office of Human Resource Services. To avoid overpayment to the terminating employee, it is important that the PAN form be submitted in sufficient time to allow processing by the Office of Human Resource Services and the Payroll Department. b. The Office of Human Resource Services should be notified by the employing department when a terminating employee requests a final paycheck prior to the scheduled pay date. The Office of Human Resource Services will then notify the Payroll Department that a final paycheck has been requested. Any final paychecks released prior to the scheduled pay date should be picked up in the Payroll Department by a representative from the terminated employee's department. M. Record of Hours Worked The Fair Labor Standards Act requires that a record of hours worked be maintained for all nonexempt employees. Faculty, specialists, executive managers, and administrative professionals are exempt under the law. Records of hours worked should also be kept for employees entitled to overtime based on contractual provisions ( administrative professionals in levels 8 - 11 ). The "Time Record" (see exhibit 55-1) is an appropriate record for all hourly employees including students. Other departmental records are acceptable, as long as they record hours worked on a daily basis. N. Retention of Records To meet the requirements of the Fair Labor Standards Act, departments must retain time records of hours worked per day and retain these records for a period of four years. For employees paid on federal work study accounts or federal contract and grant accounts, time records must be retained for 6 years after fiscal year end. III. FICA WITHHOLDING INFORMATION A. Graduate Assistants employees and student employees will be assessed FICA/Medicare tax if they are: 1. Undergraduate students enrolled for less than 6 credits. 2. Master's level students enrolled for less than 5 credits. 3. Doctoral level students enrolled for less than 3 credits. http://ctlr.msu.edu/mbp/mbp55.htm 09/04/200 MSU Manual of Business Procedures: Volume 1 Revised July 1999 Page 10 of 1 B. Services performed by nonresident aliens temporarily in the United States under F, J or M visas may be exempt from social security withholding. Individuals who feel they qualify for this treatment should come to the Payroll Department to discuss qualifications for exemption. IV. CHANGES IN NAME AND/OR ADDRESS AND CORRECTION OF SOCIAL SECURITY NUMBER ERRORS A. Change of Name 1. Support Staff a. The name of an employee on the payroll records must be the same as the name indicated on the employee's social security card. b. Name changes must be processed through the Office of Human Resource Services by the employee's department on the Personnel Action Notice (PAN). Name changes cannot be made on payroll records (including changes of name on preprinted time reports) until a copy of the changed social security card has been submitted to the Office of Human Resource Services to change the employee's records. 2. Academic - Academic personnel must communicate changes in name by an Address Information Notice (AIN) to the Academic Personnel Records Office. The AIN should be accompanied by three copies of the employee's social security card. The Academic Personnel Records Office will forward one copy of the social security card to the Payroll Department and one copy to the Office of Planning and Budgets to change the employee's name in these areas. 3. Students - Students must make name changes at the Registrar's Office, 150 Administration Building. In addition, a copy of the social security card with the corrected name must be sent to the Payroll Department. 4. Graduate Assistants - Graduate assistants must make name changes at the Registrar's Office, 150 Administration Building. In addition, a copy of the social security card with the corrected name must be sent to the Payroll Department. B. Change of Payroll Address 1. Current Employees - Faculty and support staff addresses are entered into the payroll system from the faculty/support staff address system. The change should be made through the employee's department. The Personnel Action Notice (PAN) for support employees or the Address Information Notice (AIN) for academic employees should be used. Graduate assistant and student address changes should be made at the Registrar's Office, as they are entered into the payroll system from the Registrar's address system. 2. Terminated Employees - Terminated employees who wish to have their Form W-2 sent to an address other than the one on file at the time of termination should contact the Payroll Department to change the address to which the Form W-2 is to be sent. C. Correcting Errors in Social Security Number If an error in a social security number is found on any earnings information from the University, the employee should take or send a copy of the social security card to the appropriate personnel office to have the number corrected. The employee also should send a copy to the Payroll Department so correction of the employee's earnings records can be made with the Social Security Administration. http://ctlr.msu.edu/mbp/mbp5 5 .htm 09 /04/200 MSU Manual of Business Procedures: Volume 1 Revised July 1999 Page 11 of 1 V. COMPENSATION FOR NONREGULAR ASSIGNMENTS OR DUTIES A. Overtime (NOTE: The information below summarizes significant pay requirements but is superseded by collective bargaining agreements. See appropriate contracts for details.) 1. Definition a. The Fair Labor Standards Act stipulates that nonexempt employees must be appropriately compensated for overtime hours worked. "Nonexempt employees" are all employees except faculty, specialists, executive management, administrative professional, and supervisory staff. In addition, administrative professionals in levels 8 - 11 are provided overtime pay per their collective bargainin agreements. Overtime is earned when an employee works in excess of 40 hours in a standard work week or, in certain 7-day-per-week operations, over 8 hours per day and 80 hours in a two-week period. The standard work week is a 168-hour period which, for the University, generally starts at 12 midnight on Sunday and ends at 12 midnight on the following Sunday. b. Hours worked in excess of a standard work day or week by a nonexempt employee should be approved in advance of the work being performed by completing Approval for Overtime Hours for Non-exempt Employees (see exhibit 55-J). 2. Compensation a. Time Off for Overtime Hours Compensation for overtime hours worked should be handled within the purview of the relevant labor union contract. b. Payment for Overtime Hours 1) For hourly, clerical-technical, and nonexempt salaried employees, overtime must be submitted on a blue labor payroll time report. (See exhibit 55-F for sample of Labor Payroll Time Report.) Hours reported on the Labor Payroll Time Reports must be actual hours worked and must be rounded to the nearest tenth of an hour. Do not increase by 50% the overtime hours worked by employees; the system automatically calculates a time-and-one-half payment. For student employees, overtime must be submitted on a green Student Payroll Time Report (see exhibit 55-H) using the STO earnings type and actual hours worked. 2) All Labor Payroll Time Reports and Student Payroll Time Reports should be submitted per the schedule outlined in item II.,G., Deadline for Submitting Payroll Information and Changes 3) All blue and green Payroll Time Reports should be submitted to the Payroll Department on Wednesday of student pay week. c. Rate of Payment http://ctlr.msu.edu/mbp/mbp5 5 .htm 09/04/200 MSU Manual of Business Procedures: Volume 1 Revised July 1999 Page 12 of 1 1) Hourly employees should be paid their regular rate. 2) Overtime Compensation - Under the Fair Labor Standards Act, employers are required to pay "non-exempt" employees overtime compensation at a rate of at least one and one-half times their "regular rate" worked in excess of 40 hours during a given work week. For purposes of calculating overtime, an employee's regular rate of pay must include a factor for non-discretionary payments. Examples of non-discretionary payments include the longevity payment, shift-differential pay and higher-rated job pay. The Payroll Department will incorporate the longevity payment with respect to overtime paid and payment will be made to employees on an annual basis. Departments are responsible for including the shift-differential pay and higher rated job pay in their overtime pay on an on-going basis. Questions regarding the overtime calculation and processing procedures should be directed to the Payroll Department at 5-5010. 3) Approval of Human Resource Services is necessary when overtime is submitted for administrative professional employees in levels 12 or above; overtime approval must be submitted on a Special Payment Authorization Form (see exhibit 55-L). B. Compensation for Services Apart from Regular Work Assignments 1. Academic Employees - Every department paying individuals appointed in the academic personnel system for part-time work involving teaching or service activities in excess of load needs prior approval of the dean of the college. Deans should forward a yellow "Additional Payments" form (see exhibit 55-K) to pay overload to the Office of Planning and Budgets for processing. This type of pay is subject to the Board policy found under Overload Pay in the Faculty Handbook. 2. Support Staff a. Michigan State University employees performing services apart from their regular work assignments are considered University employees in such capacity. They may not be processed as independent contractors. b. To pay the employee for these services, a white "Special Payment Authorization" form (see exhibit 55-L) must be submitted to Human Resources for approval. c. If approved by Human Resources, services apart from regular work assignments and outside the classification may be compensated at a rate different from the employee's regular rate. However, nonexempt employees must be appropriately compensated when total hours worked are in excess of 40 hours in a standard work week. C. Military Pay 1. Regular, full-time employees who are ordered to temporary active duty for military training will be allowed fifteen (15) days leave of absence. The University will pay the difference between regular pay an military pay when the military pay is less. The military pay, which will be supplemented by the University, is the base pay. The employee must present a copy of the pay voucher from the government to document the amount of military pay received. 2. Military pay will be deducted from regular pay as follows: a. Faculty - a copy of the military pay voucher should be forwarded to the Payroll Department. Payroll will determine the amount to be deducted. The military pay will be deducted from the next paycheck. http://ctlr.msu.edu/mbp/mbp55 .htm 09/04/200 MSU Manual of Business Procedures: Volume 1 Revised July 1999 Page 13 of 1 b. AP and CT - a copy of the military pay voucher should be submitted to the Office of Human Resource Services; they will determine the amount to be deducted and will report the amount to the Payroll Department. The military pay will be deducted from the next paycheck. c. Hourly - a copy of the military pay voucher should be forwarded to the Payroll Department along with a blue Labor Payroll Time Report showing the military pay and using the earnings type, "MIL." The system will automatically deduct the amount of military pay from the employee's gross pay. D. Jury Duty 1. The University will pay the difference between the jury duty compensation and the regular University compensation. 2. The procedures for processing documented evidence of jury duty compensation are the same as for military pay. E. Court Witness Fees Court witness fees paid to University employees must be deposited into the account number 11-0739. A duplicate receipt is to be sent by the employing department to the Payroll Department where the duplicate receipt will be placed in the employee's file. VI. SPECIAL HANDLING A special handling fee of $25.00 will be charged to departments when notices of personnel action result in the need for a hand-drawn check to pay employees on a timely basis. Notices of personnel action, for purposes of this policy, which could result in the special handling fee if received too late to meet payroll processing deadlines are defined as follows: A. Academic or support staff appointment forms. B. Time reports for student and labor payrolls. VII. EXHIBITS Exhibit 55-A. Employee's Federal Withholding allowance Certificate Exhibit 55-B. Employee's Michigan Withholding Certificate Exhibit 55-C. Employee's Withholding Certificate For City Income Tax Exhibit 55-D. MSU Direct Deposit Authorization Form Exhibit 55-E. MSU Preprinted Labor Payroll Time Report (Blue Sheet) Exhibit 55-F. MSU Labor Payroll Time Report (Blue Sheet) Exhibit 55-G. MSU Preprinted Student Payroll Time Report (Green Sheet) Exhibit 55-H. MSU Student Payroll Time Report - (Green Sheet) http://ctlr.msu.edu/mbp/mbp5 5 .htm 09/04/200 MSU Manual of Business Procedures: Volume 1 Revised July 1999 Page 14 of 1 Exhibit 55-I. MSU Time Record Exhibit 55-J. MSU Approval for Overtime Hours for Non-Exempt Employees Exhibit 55-K. MSU Additional Payments Form Exhibit 55-L. MSU Special Payment Authorization Form http://ctlr.msu.edu/mbp/mbp5 5 .htm 09/04/200 MICHIGAN STATE UNIVERSITY EMPLOYEE/STUDENT LOST CHECK FORM CO-pa-39 DATE: Highlight and start typing here. (EMPLOYEE) SSN: (STUDENT) PID#: A Office of the Controller Accounting Department 360 Administration Building Michigan State University East Lansing, MI 48824-1046 (517) 355-5000 Our records show that on __ ___ __ Michigan State University check number ____ _ in the amount of$ made payable to _ __ __ _ __ __ __ _ __ _ was mailed to you . This check has not yet cleared through our bank. If this check was: 1. Never Received ® 2. Lost O 3. Stolen Q 4. Destroyed Q Please complete the section below and return this notice to out office immediately. Upon receipt of the completed form, we will issue a replacement check at such time as the bank provides all necessary information to the University. "I authorize Michigan State University to stop payment on the above check and to issue a replacement check. I agree that is the original is recovered it is to be returned promptly to your office. I further agree that if both the original and replacement checks are cashed under circumstances resulting in overpayment to myself, I will promptly reimburse the University for the amount of overpayment or hereby authorize the University to deduct the amount of such overpayment from my next payroll check(s)." "If I am enrolled as a student, I hereby waive my right to additional notification prior to placement of a financial hold." Signed ____ _________ _ PLEASE NOTE: If you cash a check that you have requested to be stopped, you may be charged a fee by your bank for the returned check. Please call 355-5000 to verify if a stop payment was placed. Date: Address: Phone: ** MAIL CHECK D ***HOLD FOR PICK-UP Cl For office use only 1. Stop payment placed by: ____ _____ _ Date :. __ __ __ _ 2. Confirmation by: Bank Statement Phone call Date: ______ _ Date : _ __ __ _ _ 3. Replacement authorized by: __ _ __ __ _ _ Date: _ __ __ _ _ 4. Check reissued : ___ _________ _ Date: ______ _ Revised 6/99 MSU is an Afllrmative Action/Equal Opportunity Institution From: To: Date: Subject: Julianna Douches Brown, Pat 9/5/01 10:37AM Change to Manual of Business Procedures - Payroll Hi Pat, Yesterday, I gave Marge some minor changes to the Payroll Section of the Man. Bus. Procedures. Two of the items, we would prefer not to change. The sections where we wanted to change the number of days for direct deposit from "ten (1 O)" to "six (6). We had a miscommunication. We want to leave it at ten (10). Please do not make the changes to the Manual of Business Procedure. So, basically, the only changes I submitted were to strike 2 lines of text from another section. If you have any questions, please contact me. Thanks. Julianna Lee Douches Payroll Division Manager, Michigan State University 350 Administration Bldg East Lansing, Ml 48824-1046 Ph: 517-355-5010; Fax: 517-353-1675 Email : Douchesj@ctlr.msu.edu !v!SU Manual of Business Procedures: Volume I Revised September 199( ~~ \~ Page I of 3 SECTION 60: PETTY CASH FUNDS I. GENERAL II. OBTAININGMQNEY FOR A PETTY<;::A§!II!JNQ . ············---·-··--··· A. Pt:Q~tJ!l:C:!l!0H8i-9-l©--fo the-fuaEls. must sign the authorization part of the Travel ucher in advance of the travel. 3. Foreign travel authorizations must be approved by the Office of Contract and Grant Administration if the trav:el is funded py a grant or contract under account numbers 61- 0000 through 61-999~ t-L I f-- Appl1 4. University employees are responsbile for travel cost for both domestic and foreign travel and must request reimbursement via the Travel Voucher using original receipts. Eligible University business travelers are offered the option to have airline and rail ticket purchases directly billed to the University when booked through the CT As . Business travelers may call any one of the three CT As to utilize direct billing. Airfare may be booked up to 120 days prior to trip departure. Travelers may charge airfare/rail tickets to multiple MSU account numbers if desired. The MSU business traveler must provide the travel agent with a valid account number and travel object code at the time of reservations. A combination trip of business and leisure air travel cannot be direct billed to the MSU account number. Direct billed airfare/rail charges will be e~2ensed monthly on the respective departmental fund ledger reports. Airfare for non-University personnel may be prepaid by utilizing airfare/rail direct billing through the funding department or by Direct Payment Voucher. 5. MSU's consolidated travel management program includes contracts with a cluster of three travel agencies. MSU's cluster travel agency consolidation was adopted to provide MSU business travelers and travel arrangers with a significantly improved travel program that provides better service and reduces costs. Under the terms ofMSU's contracts, one of the CTAs must issue a ticket for any airline reservation paid for with University funds. Reservations may be made through a CT A travel agent, through a CTA emergency reservations center, or on-line through a CTA designated web site. While the University encourages faculty and staff to research travel options with Web-based resources, MSU travelers will not be allowed to book air and rail tickets through non-CT A Web-based booking products or directly with airlines. Booking through non-CTA Web-based products and directly with airlines will not allow the MSU business traveler to direct bill their airfare to the University or take advantage of MSU's negotiated airline discounts. 6. Exceptions to the travel regulations must be authorized by the University Travel Office prior to making reservations. 7. As a general policy, expenses attributable to spouse travel are not reimbursable. Prior approval for specific trips or a series of trips with the same function must be obtained from the MAU head, the Provost, and the Vice President for Finance and Operations. In order to be approved, these situations must meet the bona fide business criteria provided for by IRS regulations and may result in taxable income. 8. University personnel returning from foreign or out-of-state travel are required to fill in the Report on Out-of-State Travel portion of the Travel Voucher. 9. Reimbursement is generally limited to actual cost of business related expenses, except for mileage and per diem meals. All meals are limited to those not prepaid in registration or conference fees. 10. Sabbatical leave travel can be approved if a travel plan related to the sabbatical leave assignment is submitted. 11. Conference registration fees must be paid in advance using the MSU Mastercard Purchasing Card whenever possible. If the MSU Purchasing Card cannot be used because the conference registrar will not accept it, or because the registration amount exceeds the MSU Purchasing Card transaction dollar limitation, a Direct Payment voucher must be used. This direct payment voucher must detail the attendee, date, and location of the conference. Travel vouchers submitted for conference-related travel must include copies of the conference agenda/materials ( documentation specific items, such as meals, lodging and shuttle included in conference fee). Indicate "no meals included" if applicable. 12. Cancellation - When a trip is canceled after the ticket has been issued, the traveler must immediately notify the CTA that issued the ticket. For tickets issued on a discounted fare, the airlines will generally not refund the cost of the ticket, but may allow the value to be placed against future travel (minus an administrative fee). The traveler should inquire of the CT A about using the ticket in this manner. Service fees incurred in the nom1al course of doing business are reimbursable. Fees incurred by the traveler through negligence, personal choice, or carelessness of the traveler are not reimbursable. 13 . On occasion, exceptions to using the CT As will be warranted. Reimbursements for travel purchases not made through the CT As must follow the procedures outlined herein . Travelers should familiarize themselves with the exceptions p_rior to incurring a travel expense. a. Exception Approval Procedures - The exceptions listed in 13.c do not require prior approval as long as the listed procedures are followed, and the required support materials are submitted at time of reimbursement. When a situation arises that does not appear to fall into the above categories, MSU's Travel Program Adminstrator should be contacted immediately. Exceptions not approved by the Travel Program Administrator (or if he is unavailable) can be forwarded in writing/email by the traveler to the University Controller for further consideration. b. Lower Cost Exceptions - Each CTA has access to MSU's negotiated discount rates and each CTA guarantees the lowest available published fares . Request for exceptions to policy due to lower cost or logistical impossibility, but not specifically mentioned herein, should be addressed to the Travel Program Administrator Qrior to travel purchase. c. Airline Exceptions - Airline tickets for MSU business travel must be issued by one of the CT As except in the following situations: 1) En route itinerary changes may be made at an airline ticket counter if it is not practical to make the changes via the CT A's emergency service due to severe time constraints, or if it is required that a penalty payment be made directly to the airline. The expense report item should be noted "en route change". 2) it is discovered immediately prior to scheduled departure that the original ticket has been lost and a processing fee is required by the airline for subsequent processing of a Lost Ticket Application form. 3) when laws prohibit an international passenger inbound to the US from purchasing air travel outside the country or origin. 4) when an inbound international traveler can obtain in the country of origin a discounted international inbound ticket that cannot be secured through one of the CTAs. 5) when a lower outbound international fare is available through a consolidator (which provides insurance protection) that cannot be secured through one of the CTA's consolidators. A comparable same-day printed quote from a CT A must be attached to the reimbursement form; (Visit ctlr.msu.edu/travel for future information on consolidators). 6) when a negotiated conference airfare rate can only be obtained through the conference organizer. A copy of the conference material indicating this requirement must be submitted with the reimbursement form and. 7) when a University-business trip is more than 50% paid by another organization whose travel policy is more restrictive than MSU's. D. University Travel Office The MSU Travel Program is designed to provide improved service to faculty and staff who travel on University business while simultaneously reducing costs. The travel office coordinates the Corporate Card program and works closely with the Cluster Travel Agencies. Questions about MSU's travel policies and procedures, feedback on travel vendor contracts and performance, exception requests, and suggestions for future handbook updates should be directed to: Bob Patterson Travel Program Administrator 390 Administration Building Phone: (517) 353-4419 Fax: (517) 353-1706 12atter3~r.msu.edu Questions about reimbursements, direct billing of airfare, MSU's corporate card, cash advances, and day-to-day travel related issues should be directed to: - Carolyn Snow -~ ,'t;.,,, 'Fravel-E>f-fiee"'Mamrger tfrt/v'-..1'-it } O:::A) for one-way mileage. 4. Rented Vehicles a. Under certain circumstances, the use of a rental car may be necessary. The business purpose for use of a rental car must be clearly documented on the travel reimbursement voucher. Justification for the expense of car rental as compared with transport by common carrier must be documented (based on comparable total cost, availability and functionality for the intended business use). Many rental car agencies will give a discount or offer "specials" to employees upon presentation of University identification. Rental cars should be mid-size or smaller class when available. 1) The term "common carrier" in this context is intended to mean conveyance such as taxi, limousine, shuttle, courtesy shuttle or commercial airline. Other common carrier such as intra or inter city bus, subway or passenger train are certainly appropriate (and reimbursable) but need not be compared with car rental as viable options. 2) Car rental expenses are only reimbursable if necessary to conduct University business and when justified (as in 4.a. above). Travel to/from restaurants to take meals is deemed to be personal rather than business according to the Internal Revenue Service Regulations and the Federal Travel Regulations. Travel for sightseeing or similar purposes is personal. 3) For University business purposes, if ground transportation is only required to travel between the airport and the work site (e.g. conference location), travelers must inquire into the availability of common carrier before incurring the cost of a http://ctlr.msu.edu/mbp/mbp70.htm 10/5/2001 MSU Manual of Business Procedures: Volume 1 Revised October 2001 Page 15.of 38 rental car. Most airports are adequately serviced by taxi or shuttle. Many hotels also offer courtesy shuttle service for their guests. b. When traveling by rental car, car rental costs and time constraints should be considered. c. The Collision Damage Waiver (CDW) or Loss Damage Waiver (LDW) is not reimbursable by the University. Employees have two options for coverage while driving rental automobiles. Their personal automobile insurance policy may include CDW or LDW coverage when renting automobiles or they may utilize the rental agencies under contract with the Big Ten which include this coverage in their rate. Refer to the University Travel office web site referencing to the Big Ten contract for rental vehicles for details. While visitors are reimbursed for automobile rentals, they should be encouraged to check their personal coverage or corporate contracts for Loss Damage Waiver and liability coverage to avoid additional costs to MSU. d. Liability coverage. Personal automotive liability policies normally provide liability coverage while driving another vehicle. The University will not reimburse employees for liability insurance costs. Because of unique laws in foreign countries, complications in settling claims and personal policy restrictions, it is recommended that travelers be instructed to buy the liability insurance in all areas except the United States and Canada; the University will reimburse for this expense. 5. Cluster Travel Agency Car Rental Policies a. Travelers will be offered car rental reservations at discounted corporate or specially negotiated rates. b. Rental cars will be confirmed through the cluster travel agency reservation system and confirmation information will be printed on the travel itinerary. The CTA will provide the traveler with the name of the rental agency, pick-up date, pick-up city, and confirmation number for the rental. 6. University-owned Vehicles a. Travel over 500 miles one way must be approved in advance by the Office of Planning and Budgets. Within the limits of availability and the criteria outlined under Private Car above, University-owned vehicles may be used for any authorized travel. University owned vehicles may not be used by student clubs, student organizations, non-University groups, or by employees engaged in private consulting. b. Procedures 1) If the vehicle is a departmental vehicle and the trip is local or is short enough so that no request will be made for subsistence, approval for travel may be handled by "signing out" and "signing in" in a record book in the department office. If a request for subsistence will be made, the Travel Voucher form should be completed. http://ctlr.msu.edu/mbp/mbp 70. htm 10/5/2001 MSU Manual of Business Procedures: Volume 1 Revised October 2001 Page 16 of 38 2) If a Motor Pool vehicle is requested, the completed authorization part of the Travel Voucher serves as a vehicle request as well as authorization for the trip. It does not, however, guarantee that a vehicle will be available. Priority decisions with respect to vehicle requests will be made by the Manager of Automotive Services. c. For further information on Motor Pool policies, see Section 245 of the Manual of Business Procedures. 7. Charter Air Service a. Charter air service may be authorized when it reduces travel costs and travel time. This must be documented on the Travel Voucher. b. Reimbursement for private qualified aircraft travel will be made on the basis of personal car mileage or commercial airfare; whichever is less. c. Approved charter/aircraft companies may be used when a preapproved AIRCRAFT/CHARTER COMPANY QUALIFICATION FORM is on file in the University Travel Office. F. Lodging 1. General Information a. Lodging rooms should be single rate with hotel or motel original receipt. b. If two or more MSU travelers share a room, request individual room receipts, if available. If not, submit the reimbursement vouchers together for processing. c. If the other occupant(s) who shares a room is not an employee, request the single rate be noted on the receipt. d. If lodging is complimentary (e.g. staying with family, friends, etc.), documentation is required in order to pay per diem. The traveler should indicate date(s) of lodging, address of lodging, and name of lodging provider. 2. Cluster Travel Agency Hotel Policies a. Travelers will be offered the lowest rack rates for all lodging reservations. In addition, the cluster travel agency will use corporate, consortium, or University-negotiated discounts, where appropriate, in order to obtain any available lower rate for a standard room at a requested property. b. Travelers not requesting a specific lodging property and travelers who may request a specific property which is not available for their desired travel dates may be offered at least two (2) choices of hotels, by either comparative cost or by requested location (e.g. near airport, convention center, downtown, etc.). http://ctlr.msu.edu/mbp/mbp 70 .htm 10/5/2001 MSU Manual of Business Procedures: Volume 1 Revised October 2001 Page 17 of 38 c. When obtaining lodging reservations for the University traveler, the cluster travel agency will provide the traveler with the hotel address, telephone number, per diem rate, and reservation confirmation number. d. University travelers will be offered the MSU Traveler Preference Profile Forms in order to notify the cluster travel agency of travel preferences. The cluster travel agency will then be required to maintain all information, including travelers' hotel preferences, in a computer-stored personal account record (PAR). e. Room guarantees and deposits, not required by hotel policy, will only be made at the request of the University traveler and will be the responsibility of the traveler. The University will not be liable for any financial arrangements made for individual travelers. f. Cancellations for lodging reservations will be the responsibility of the traveler. For their own protection when canceling guaranteed reservations, the traveler should make note of the name of the person through whom the cancellation was made. G. Reimbursement 1. Travel reimbursements will be based on travel by the usual direct route for the authorized mode of travel. If the traveler plans to use a less direct route or more expensive mode of travel than authorized, bearing the extra costs him/herself, these plans should be noted on a separate sheet attached to the Travel Voucher (Stores stock number 140-27860). Additional cost resulting from stops for personal reasons will not be reimbursed. 2. Claims for reimbursement of expenses incurred with the use of University vehicles must be supported by receipts. 3. Original receipts and original ticket stubs are required for reimbursement of all travel expenses except as noted on the Reimbursement Chart (see Exhibit 70-A). 4. The University does not reimburse for meals taken while not in overnight travel status -- travel to an out-of-town meeting and return on the same day . 5. The following persons are eligible for reimbursement: a. Employees of the University. b. Persons who are invited to the University (for lectures, consulting, recruiting, etc .) or who are asked to travel for the University. Meals and lodging furnished to guests in the local area and charged to University accounts must be furnished by on-campus facilities when available. c. Graduate students. University general funds may not be used for travel to collect data primarily for theses and/or dissertations. d. Undergraduate students employed by the University or representing the http://ctlr.msu.edu/mbp/mbp 70. htm 10/5/2001 MSU Manual of Business Procedures: Volume 1 Revised October 2001 Page 18 of 38 University in intercollegiate athletics, scholastic or music competitions and other sanctioned University events. 6. Rates of Reimbursement See Reimbursement Chart (see EXchibiL7Q~A) for rates of reimbursement and listing of receipts required. The unit administrator may authorize an amount less than full reimbursement. 7. Reimbursement for Nonrefundable Air Tickets When changes in travel plans require cancellation or revision of airline tickets, the reason for the change must be documented on the voucher. a. If an employee is unable to travel because of illness on the dates originally ticketed, or if an employee had an illness within his/her immediate family (spouse or children) on the dates originally ticketed, the employee is eligible for departmental reimbursement. b. If an employee had a death in his/her family on the dates originally ticketed, MSU will follow the Human Resource Policies and Procedures Funeral Policy to determine whether the employee is eligible for departmental reimbursement. c. If the Unit Administrator requests the employee to be performing other duties on the dates originally ticketed, the employee is eligible for departmental reimbursement. d. When the scheduled MSU reimbursed trip is not taken, the nonrefundable airline ticket coupons still have a "value" and should not be discarded. Call the University Travel Office for procedures to follow to apply this value to future reimbursed travel. 8. Reimbursement for Tips a. Tips for taxi or limousine service (not to exceed 20% of cost) are reimbursable. b. Tips for business meals are reimbursable up to 20% of the meal cost. A restaurant receipt must be provided. Documentation must include the name(s) and business affiliation(s) of business guests (for whom the meal was purchased) and the business purpose of the meal expense. c. Tips for individual meals are not separately reimbursable; these tips are provided for as a part of meal per diem. d. Tips for lodging limited to $2 per occupancy (not per night) are reimbursable. e. Tips and fees for personal baggage handling are not reimbursable except as specified in item d. directly above. Tips and fees for baggage handling of excess accompanied business baggage (referred to hereafter as "excess business http://ctlr.msu.edu/mbp/mbp 70 .htm 10/5/2001 MSU Manual of Business Procedures: Volume 1 Revised October 2001 Page 19· of 38 baggage") are separately reimbursable as follows: 1) For the purpose of this policy, "business baggage" is defined as non personal, project materials such as computers, equipment, manuals, reports, office supplies, etc. "Excess business baggage" is defined as business baggage in excess of the weight, size, or number of pieces that is carried free by transportation companies. Currently, the airlines will permit up to two pieces of checked baggage at no additional charge. "Business baggage" transported as "excess business baggage" necessitates the purchase of a separate airline ticket for its transport. 2) The amount reimbursable for baggage handling tips is actual out-of pocket cost limited to $1 per bag or box of "excess business baggage." Reimbursable tips for "oversize business baggage" is limited to actual out of-pocket cost limited to $3 per box or trunk per handling. ("Oversize business baggage" is defined as "business baggage" in excess of the weight or size that is carried free by transportation companies.) Handling is reasonably anticipated at each link between origin and destination requiring the traveler to personally transfer the baggage. 3) "Excess business baggage" must be documented (content/business purpose) if related transportation cost or tip expense is submitted for reimbursement. In addition, "oversize business baggage" must be separately documented when reimbursement related to its transportation/handling is requested. 4) For Federally-sponsored project activities, some granting agencies require prior written approval for the expense of transporting "excess business baggage" and the associated tips and handling fees. If required, such prior written approval must be on file in the Office of Contract and Grant Administration. III. LOCAL TRAVEL A. General Information Local travel is defined as travel within the home community of the traveler's place of employment, exclusive of on-campus travel. When University business requires an employee or University representative to travel extensively in the local area, and a University vehicle is unavailable for such travel, reimbursement for expenses related to local travel may be authorized. Departments must keep (on file) memorandum(s) approved by the department head that documents the responsibilities of employees eligible for local travel. The memorandum (s) will serve as the authorization until revised or canceled. B. Reimbursement http://ctlr.msu.edu/mbp/mbp 70 .htm 10/5/2001 MSU Manual of Business Procedures: Volume 1 Revised October 2001 Page 20 of 38 1. On-campus travel is not reimbursable. 2. Local travel consistent with the criteria noted above may be reimbursed as follows: a. Transportation. Reimbursement will be based upon the University mileage rate. Sufficient detail should be documented on the voucher to support mileage being reimbursed. b. Meals. Reimbursement will not be made for meals taken in the local area except when attendance at a meal is necessary for participation in a conference or meeting. Business reasons for the exception must be stated and receipts are required in a11 instances. c. Lodging. Reimbursement will not be made for lodging in the local area. However, employees whose home offices are elsewhere in the state are eligible for reimbursement for meals and lodging in the East Lansing area. On-campus facilities must be used when available. 3. Reimbursement for local travel will continue to be made by submission of a travel voucher. As a guideline, travel vouchers for local travel should be submitted quarterly or when expenses total a minimum of $25.00. IV. FOREIGN TRAVEL A. General Information 1. Foreign travel includes travel for which the destination is outside the United States. The United States is defined to include Alaska, Hawaii, Puerto Rico, Guam, the U.S. Virgin Islands, Canada and Mexico. 2. For travel supported by contracts and grants, the funding agreement must be reviewed for the definition of foreign travel. Travel from the point of origin and return is considered part of foreign travel. Even though most federal agencies do not consider travel to Mexico and Canada as foreign , air travel to these countries must comply with the Fly American Act. 3. MSU employees traveling overseas on University business must provide receipts for all currency exchange transactions. If receipts are unavailable, the traveler must certify in writing that all funds exchanged have been accounted for and business expense receipts presented must equal the amount received in local currency. 4. University employees are responsible for travel costs for both domestic and foreign travel and must request reimbursement via the Travel Voucher using original receipts. Airfare for non-University personnel may be prepaid by utilizing airfare/rail direct billing through the funding department or by Direct Payment Voucher. 5. Conference registration fees must be paid in advance using the MSU Mastercard http://ctlr.msu.edu/mbp/mbp70.htm 10/5/2001 MSU Manual of Business Procedures: Volume 1 Revised October 2001 Page 2I° of 38 Purchasing Card wherever possible. If the MSU Purchasing Card cannot be used because the conference registrar will not accept it, or because the registration amount exceeds the MSU Purchasing Card transaction dollar limitation, a Direct Payment voucher may be used. This direct payment voucher must detail the attendee, date, and location of the conference. Travel vouchers submitted for conference-related travel must include copies of the conference agenda/materials (documentation specific items, such as meals, lodging and shuttle included in conference fee). Indicate "no meals included" if applicable. B. Eligibility All employees, persons who are invited to the University or who are asked to travel for the University, graduate students and undergraduate students employed by the Universit or representing the University in intercollegiate athletics, scholastics or music competitions and other sanctioned University events are eligible to travel. Exceptions must be approved in advance by the Office of Planning and Budgets Aliens traveling on a "temporary visitor for business" visa may be reimbursed for their travel expenses (or travel expenses may be made directly on their behalf). Aliens traveling on a "temporary visitor for pleasure" visa may not have their travel expenses either reimbursed by the University or paid on their behalf. C. Limitations and Exceptions 1. All travel must be authorized or approved in advance of departure. Each traveler must have a separate authorization which includes all funding sources. 2. The administrator responsible for the funds must sign the authorization part of the Travel Voucher in advance of the travel. 3. Foriegn travel authorizations must be approved by the Office of Contract and Grant Administration if the travel is funded by a grant or contract under account numbers 61- 0000 through 61-9999. D. Authorization Authorization forms and policies for foreign travel are the same as in Domestic Travel. The original authorized travel voucher should be maintained in the respective department. The final completed travel voucher submitted to the MSU Travel Office for reimbursement does not have to have the authorizing signatures. Any foreign travel to be charged to contracts or grants under account number 61-0000 through 61-9999 must be approved by the Office of Contract and Grant Administration. E. Transportation 1. Grants, cooperative agreements, and contracts supported by the U.S . Government require that travel be on United States Flag carriers by the most direct and expeditious route and at less than first class rates. http://ctlr.msu.edu/mbp/mbp70.htm 10/5/2001 MSU Manual of Business Procedures: Volume 1 Revised October 2001 Page 22 of 38 2. Travel must be at the lowest, logical (considering cost and time) available airfare unless the travel agency certifies such classes were not available. Lowest, logical airfare for travel is defined as travel in coach or economy. Airfare costs in excess of the lowest, logical available commercial restricted airfare (such as business class) may be selected for continuing flights exceeding five (5) hours of flight time to destinations outside the contiguous United States. This exception requires written justification and documentation of the cost benefit with specific prior approval by the Provost or associate/assistant provost, a vice president or associate/assistant vice president, dean or equivalent separately reporting position. 3. When travel is by ship, the fare may not exceed the cost of the lowest available airfare as authorized by the most direct and expeditious route. Per diem is not payable on board ship where meals and lodging are included in the fare. For U.S. government supported projects, use of an U.S . flag ship and prior approval are required. 4. When travel is by rail, the fare may not exceed the lowest available fare and most direct, expeditious route. F. Reimbursement - Computation of Lodging and M&IE Per Diem Amounts 1. Reimbursement for lodging and subsistence will be made on a "lodgings-plus per diem system" in accordance with the U.S. Department of State rates. Per diem rates include a maximum amount for lodging expenses and a fixed allowance for meals and incidental expenses (M&IE). Per diem is the maximum daily allowance. Foreign countries (and localities within those countries) are assigned a daily rate by the U.S. Department of State. The rates are subject to their review and are updated each month. Rate information is available from the U.S . State Department web site at www .state.gov/www/perdiems/index.html or on the Office of Contract and Grant Administration and University Travel Office web sites. 2. Lodging includes expenses for overnight sleeping facilities; baths; personal use of the room during daytime; and service charges for fans, air conditioners, heaters and fires furnished in the room when such charges are not included in the room rate. The term "lodging" does not include accommodations on airplanes, trains, or steamers. Rather, these expenses are classified as transportation. 3. Actual lodging expenses (single occupancy) are reimbursed up to the published maximum. DETAILED RECEIPTS FOR LODGING MUST BE SECURED TO VERIFY LODGING EXPENDITURES. Any foreign currency exchange rate used in computing the amount of lodging expense to be reimbursed should be noted on the travel reimbursement voucher. 4. M&IE includes all charges for meals and related tips and taxes (specifically excluded are alcoholic beverage and entertainment expenses, and any expenses incurred for other persons); all fees and tips to wait staff, porters, baggage handlers, bell staff, hotel maids, dining room stewards and others on vessels and hotel servants in foreign countries; telegrams and telephone calls reserving hotel accommodations; laundry; cleaning and pressing of clothing; and transportation between places of lodging or business and places http://ctlr.msu.edu/mbp/mbp 70 .htm 10/5/2001 MSU Manual of Business Procedures: Volume 1 Revised October 2001 Page 23· of 38 where meals are taken. While baggage handling tips for personal baggage are included in M&IE and are not separately reimbursable, baggage handling tips for "excess business baggage" may be reimbursable. Consult item II., E., 8., e. above for details. 5. M&IE is computed on a daily basis with the day divided into four quarters. They are: 12:01 a.m. to 6:00 a.m., 6:01 a.m. to noon, 12:01 p.m. to 6:00 p.m., and 6:01 p.m. to midnight. (A quarter day, although reflected here as beginning one minute after the hour, technically begins one second after the stated hour.) Times of departure and arrival must be listed in order to compute the allowable amount of M&IE per diem. Prorating M&IE rate for partial days: When computing the M&IE per diem for a partial day, the calendar day (12:01 a.m. to midnight) is used as the basis. For each quarter day (or fraction thereof) that an employee is in travel status, one fourth of the applicable M&IE rate is allowable. 6. The applicable maximum per diem rate for each calendar day of travel is determined by the travel status and location of the employee at 12:00 midnight and whether or not lodging is required. a. Day travel assignment begins: If lodging is required, the maximum per diem is the actual lodging cost incurred (limited by the maximum lodging allowance prescribed by the Federal government for the location of the lodging) plus the applicable M&IE rate prescribed for the location of the lodging prorated as provided in m-1ntg1:µphJ.),,5, above. The proration of M&IE per diem commences as of the beginning of the quarter day in which the traveler leaves home. If lodging is not required, the per diem allowable is the destination M&IE prorated consistent with pµi;µgi;µpl}J),,5, above. NOTE: If a domestic layover is required upon departure, lodging and per diem reimbursement will be based upon the University policy and procedure for domestic travel. b. Travel days in-country (either en route or at a duty location): If lodging is required, the maximum per diem is the actual lodging cost incurred (limited by the maximum lodging allowance prescribed by the Federal government for the location of the lodging) plus the applicable M&IE rate prescribed for the location of the lodging. If lodging is not required, the maximum per diem is the applicable M&IE rate prescribed for the duty location, or the destination rate if the traveler is en route to a new duty location. c. Day of return from travel assignment: If lodging is required, the maximum per diem is the actual lodging cost incurred (limited by the maximum lodging allowance prescribed by the Federal government for the location of the lodging) plus the applicable M&IE rate prescribed for the location of the lodging. http://ctlr.msu.edu/mbp/mbp 70 .htm 10/5/2001 MSU Manual of Business Procedures: Volume 1 Revised October 2001 Page 24 of 38 If lodging is not required, the maximum per diem is the M&IE rate applicable to the preceding calendar day prorated as provided in paragraph D., 5. above. The proration of M&IE terminates as of the end of the quarter day in which the traveler arrives home. NOTE: If a domestic layover is required upon return, lodging and per diem reimbursement will be based upon the University policy and procedure for domestic travel. 7. When lodging is furnished at no cost to the employee, the maximum per diem rate is the M&IE rate for the locality where the no cost lodging is taken. When lodging cost is paid directly by the University, the combined lodging cost plus the M&IE amount cannot exceed the published U.S. Department of State total daily maximum rate for the locality. 8. For international travel, when meals are furnished without charge, the M&IE claim should be reduced by an amount commensurate with the relative proportion that meal represents to the daily M&IE per diem allowance. The proportions are: Breakfast Lunch Dinner Full Day Incidentals* 15% 25% 40% 80% 20% *If all meals are furnished without charge, incidentals are still allowable. 9. If a staff member travels by an indirect route for personal reasons, per diem will normally be paid only for the time it would take to travel by the most direct route. 10. Sample work sheets are provided (see Exhibits 70-F and 70-G) to use in computing and scheduling international travel expenses for per diem, lodging and other expenses. Use of these work sheets is not mandatory but may be useful in determining the correct travel reimbursement amounts. These work sheets do not replace the travel reimbursement voucher which must be properly completed in order to obtain reimbursement for travel expenses. Work sheets may be copied from Exhibits70-F and 70:::0. G. Travel Vouchers. 1. An international travel scenario is included, with completed forms, to illustrate the computation of per diem and lodging expense reimbursement claims (see E:i<,hibit~70:::H, 70-I, and 70-J). NOTE: If more than one account number is to be charged and if specific travel expenses must be charged to a particular account, the various costs claimed should be marked, e.g. using an asterisk, to indicate the appropriate account. http://ctlr.msu.edu/mbp/mbp70. h tm 10/5/2001 MSU Manual of Business Procedures: Volume 1 Revised October 2001 Page 25· of 3 8 2. In case of indirect routing for personal reasons, the extra transportation costs will be at the traveler's expense and the additional time should be charged as vacation. 3. All original airline passenger receipts, accompanied by an invoice from the travel agency showing the amount actually paid for the ticket, and any unused flight coupons, must be attached to the Travel Voucher. Tickets and coupons are necessary to provide audit documentation. Itemized original receipts for lodging must also be attached to the travel voucher, along with any documentation available for verifying expenses. The U.S. dollar equivalent for expenses claimed should be listed on the Travel Voucher with a notation of the foreign currency exchange rate used. 4. Taxi expenses are allowable for travel related to business. For example, taxis between hotel and airport are allowable; taxis from hotel to a restaurant to eat a meal or taxis for sight-seeing trips are not allowable. 5. Dates and times of departure and arrival should be listed across from the amount claimed for per diem. This is necessary to establish the correct quarter-day allocation. 6. In order to expedite the processing of Travel Vouchers, the actual lodging expenses (see it9mJ::),,J, above) should be highlighted on the lodging receipt. Other incidental expenses charged to the room are not considered lodging expenses. If actual lodging expenses exceed the published maximum, travelers should not claim the excess. H. Source of Funds for Foreign Travel 1. Travel related to overseas projects of the University. Such travel is authorized, arranged and supported through the Office of International Studies and Programs. 2. Travel by faculty members to participate as officers in international organizations. Applications for support from this fund should be addressed to the Dean of International Studies and Programs. 3. Travel supported by the International Centers and Institutes. The International Centers and Institutes may support a limited amount of foreign travel if it is essential to their operation. 4. Travel to participate in international meetings or to do research in foreign areas. Applications for support from this fund should be addressed to the Dean of International Studies and Programs. 5. Travel supported by contracts, gifts or grants from outside agencies. Reimbursement may be made for necessary foreign travel from contract, gift or grant funds provided that the agreements by which the University has accepted the funds cover such travel and that such travel does not interfere with the performance of the normal duties of the traveler. 6. Travel supported by All-University Research grants. Foreign travel may be supported by an All-University Research project to the extent that foreign travel was included in the . project application and approved by the All-University Research Committee. http://ctlr.msu.edu/mbp/mbp70.htm 10/5/2001 MSU Manual of Business Procedures: Volume 1 Revised October 2001 Page 26. of 3 8 7. Travel supported by cost-of-education allowances. With justification, the cost-of education allowance which has been allocated to a college or department may be used to support foreign travel by faculty or graduate students. Cost-of-education allowances are usually designated for underwriting costs and improving the quality of graduate education rather than for the benefit of an individual. They should not be used for foreign travel unless the unit has sufficient funds to meet other more urgent needs related to graduate programs. 8. Travel related to teaching courses in foreign areas. Such courses are normally in one of the following categories: a. Courses supported by outside agencies. Travel related to such courses is essentially the same as travel supported by gifts, grants or contracts. b. MSU courses taught overseas: 1) If the revenues from off-campus credit courses in foreign areas are credited to the general fund, the corresponding expenditures for travel and teaching may be charged to the general fund. 2) If the revenues from off-campus courses in foreign areas are credited to a revolving fund, as is normally the case for non-credit offerings, the corresponding expenditures must be carried by the revolving fund. 3) "Courses abroad" taught by MSU faculty primarily for MSU students. If the students, or an outside agency, underwrite the cost of transporting the course to a foreign area and providing the necessary physical facilities, the regular salary of the instructor may be paid from the general fund. In addition, the University may provide operational funds to the extent that such funds would have been required had the course been taught on campus. The net cost to the University should not be greater than if the course were taught on campus. 9. Travel by persons invited to the University or asked to travel for the University may be supported by the general fund or other appropriate funds. Meals and lodging furnished to such guests while in the local area and charged to University accounts must be furnished by on-campus facilities, if available. I. All-University Research Funds 1. Funds made available under the All-University Research grants may be used to include foreign travel subject to the administration of such funds as indicated below. 2. Faculty wishing to use All-University Research funds to cover travel costs will be expected to apply, in addition, for such international funds as may be available from off campus sources such as foundations and government agencies. 3. The application for international travel funds which is to be supported by an All- http://ctlr.msu.edu/mbp/mbp 70 .h tm 10/5/2001 MSU Manual of Business Procedures: Volume 1 Revised October 2001 Page 27· of 38 University Research grant should include information on points to which the individual will travel and the research which will be conducted at each point. Reimbursement will be limited to round-trip tourist fare, for MSU faculty members only, and for most direct routing, unless exceptions are made by the dean. In many instances there will be insufficient funds under All-University Research grants to cover the total transportation cost. The balance, additional travel costs, as well as other costs, are to be borne by the faculty member or other approved sources. 4. The All-University Research Project involving international travel is to be carefully screened by the respective unit administrator and the dean of the college before submission of the application to the Vice President for Research Development and Graduate Studies. With the approval of the Office of Research Development and Graduate Studies, the grant will be given a project number and an account number, which should be noted on the travel application request. J. Special Foreign Travel Fund (SFTF) 1. Purposes - The SFTF is meant to: a. Fund faculty participation in international congresses, meetings, and performances, or showings held outside of the United States. b. Supplement departmental and/or college funds available to faculty. c. Serve to equalize MSU units' ability to support international travel by their faculty. 2. Policies Governing the SFTF a. All MSU faculty are eligible for SFTF support. However, higher priority will be given to faculty appointed in the tenure system. b. An individual may not receive more than one SFTF award within a 24-month period. c. SFTF support is for faculty attendance at international congresses, meetings, performances and showings held outside the United States. d. Normally, SFTF support may be used for air transportation expenses from Lansing only. It cannot be used for per diem and related meeting costs. e. The SFTF is intended to be a source of last resort. Applicants are thus urged to first explore and secure support from other sources whenever possible, such as departmental or college funds; NSF or NIH grant monies, other grant monies, foundations, and/or personal resources. f. The SFTF is intended to be supplemental in nature. Normally, departments and colleges must match part or all of the SFTF grant made to a faculty member. Grant funds dedicated to travel costs can be used for matching SFTF grants. Only http://ctlr.msu.edu/mbp/mbp70.htm 10/5/2001 MSU Manual of Business Procedures: Volume 1 Revised October 2001 Page 28 of 38 funds allocated to offset travel costs will be considered as being matching monies; that is, funds allocated for conference fees and subsistence costs cannot be used to match SFTF grants . g. SFTF support may not be sought for retroactive reimbursement of travel expenses. h. If two or more faculty members from the same department or major academic unit apply for support to attend the same meeting, the maximum award will generally be no more than 120% of the full round trip cost for one person, to be split among the individuals in a manner recommended by the relevant unit administrator. i. Complete applications will be reviewed three times each calendar year: in February, June and October. The deadlines for submitting completed applications are: February 1, June 1, and October 1. The review and rating committee will review applications by the 15th of each of the applicable months. Applicants will be notified as to the decision made by the last day of each of these applicable months. j. A SFTF review committee will review eligible applications. This committee consi3ts of the Dean of International Studies and Programs, or designee, one other Dean, a representative of the Provost's Office and a representative of the Vice President for Research and Graduate Studies. k. The Dean of International Studies and Programs, or designee, will use the advice of the review committee to make final decisions on award recipients and levels of funding. 1. The Dean of International Studies and Programs, or designee, will notify applicants, their Chairpersons or Directors, and Deans of the decisions made and provide information on procedures for using the award to those who received them. m. Individuals who receive a SFTF award are required to submit a brief report of their travel and international meeting experience on returning to MSU. 3. Procedures a. Interested faculty should obtain an application and guidelines from the Office of the Dean, International Studies and Programs. SFTF applicants must provide evidence of an invitation to present a competitive paper, keynote address, juried artistic exhibition, or performance in a major recital hall. Applicants anticipating receiving evidence of this kind but lacking it at the application deadline are encouraged to apply and submit the letter as soon as it is received. In such cases, reimbursement is conditioned on the submission of the letter of invitation. b. The application should be completed and signed by the applicant, the chair, and the dean. http://ctlr.msu.edu/mbp/mbp 70. htm 10/5/2001 MSU Manual of Business Procedures: Volume 1 Revised October 2001 Page 29 of 38 c. The original and four copies of the completed application and all attachments should be submitted to the Dean of International Studies and Programs by the appropriate deadline. d. Applications are reviewed three times each year. The three deadlines for submitting applications are: February 1, June 1, and October 1. Unless dictated by early deadlines for responding to meeting organizers, applications for SFTF support should be submitted as follows: 1) Applications for meetings in March through August should be submitted by the February 1 deadline; 2) Applications for meetings in July through December should be submitted by the June 1 deadline; 3) Applications for meetings in November through April should be submitted by the October 1 deadline. V. OTHER INFORMATION A. Travel Advances 1. General Information Regu1ar Faculty, Academic staff, Administrative Professionals and Clerical Technical of Michigan State University who are expected to travel annually on behalf of the University are eligible to be considered for a Corporate Card. Use of this corporate card by the employee for business travel purposes only will eliminate the need for most travel advances. Information on how to obtain a card may be found on the Travel Office website: http://c;J]r.,m~µ,Qg1,1/trc1yQ]/ Travel advances cannot be obtained by one person to cover multiple individuals' expenses. No advance will be issued to cover conference registration fees or hotel deposit fees. Conference fees must be paid by MSU Mastercard Purchasing Card wherever possible (seejtfml,C,,JL above) . No advance will be issued for stipends, honorariums or consulting fees. 2. Graduate Students and Employees Not Eligible for a Corporate Card a. Graduate students and all employees not eligible for the Corporate Card are eligible for a travel advance. b. The minimum amount allowed for a travel advance for eligible travelers is $350. A lesser amount can be obtained ONLY if reimbursable expenses on the Travel http://ctlr.msu.edu/mbp/mbp70. h tm 10/5/2001 MSU Manual of Business Procedures: Volume 1 Revised October 2001 Page 30 of 3 8 Voucher will be $350 or more. If the travel authorization section of the Travel Voucher limits reimbursement on expenditures to less than $350, the traveler is not eligible for a travel advance. Accounts are monitored for misuse of the $350 minimum. Misuse will result in loss of the privilege of obtaining travel advances. The minimum amount for a graduate student is $100. c. No advance (domestic or international) will be issued to a traveler more than 30 calendar days prior to the departure date on the Travel Voucher in order to comply with IRS regulations unless an exception is granted for unusual circumstances. In cases where transportation reservations are made through the "cluster travel agencies" and payment is required more than 30 days in advance of the trip to insure that the reservations are at the lowest possible fare, the airfare should be direct billed to a MSU account number. d. The amount of each advance is to be determined by the unit administrator. The advance is to cover reimbursable travel costs (excluding airfare) and should not exceed estimated expenditures. Any limitations on the reimbursement amount must be set by the unit prior to issuance of an advance. e. No advance will be made for travel to be charged against an agency account (account numbers 31-3500 through 31-4999). f. When a trip is canceled, for any reason, the travel advance must be repaid immediately. If the trip is rescheduled, a new Travel Voucher and advance must be issued. Failure to promptly repay the advance upon trip cancellation will be considered misuse and grounds for cancellation of travel advance privileges. g. NO ADVANCE WILL BE ISSUED TO A TRAVELER HA YING AN EXISTING PAST DUE ADVANCE. FURTHERMORE, ANY TRAVELER WHO HAS A CORPORATE CARD WILL NOT BE ELIGIBLE FOR AN ADVANCE. 3. Undergraduate Students and Non-MSU Personnel Eligibility a. Undergraduate students on approved travel are not eligible for travel advances. An exception is made when a faculty or staff member is willing to be responsible for the advance. The minimum amount for an advance for an undergraduate student is $100. The student must be registered for the current semester. The faculty or staff member must accompany the student to the University Travel office and request the exception. For more information see item_5., d. below. b. Non-Michigan State University personnel (visiting professors, retirees, visiting research associates, community volunteers, etc.) on approved travel are eligible for advances when reimbursable travel expenses are expected to exceed $350 and the request is for at least $350. The nonemployee must pick up the advance in person. When the person is not available to pick up the advance, a faculty or staff member may request an advance in their name for the nonemployee. The faculty or staff member will be held responsible for the repayment of the advance. A jointly payable check to the non-MSU person and the staff member will be issued. http://ctlr.msu.edu/mbp/mbp70 .htm 10/5/2001 MSU Manual of Business Procedures: Volume 1 Revised October 2001 Page 31 of 38 In all cases in which an advance is not repaid and becomes uncollectible, the unit administrator's signature guarantees repayment from departmental funds. Delinquent advances may be reported to a credit bureau and assigned to an external agency for collection. c. Independent contractors conducting business with Michigan State University are not eligible for travel advances. 4. Employees Who are Eligible for a Corporate Card If the authorized travel is international and it can reasonably be assumed that dependence on the Corporate Card will not meet the traveler's needs, then a request for a travel advance may be made. MSU travelers on extended foreign travel who do not expect to return home before the Corporate Card bill is received should call the Travel Office for an alternate option. A travel advance may be obtained no more than 7 calendar days prior to departure unless an exception is granted for unusual circumstances. The minimum advance, based on estimated reimbursable non-transportation expenses, is $350. 5. Obtaining an Advance a. Travel advances may be obtained by presenting the signed original copy of the Travel Voucher with the authorization section completed to the Travel Advance Section of the University Travel Office, 370 Administration Building. A valid student ID card or Faculty/Staff ID, along with a pictured ID is required. Office hours are 8:15 a.m. to 4:45 p.m. Monday through Friday, phone 353-4882. Graduate assistants also need to present appointment papers. The social security number, visa status, or student number of the traveler is required on the authorization part of the Travel Voucher. b. Faculty, staff or graduate students requesting an advance must do so in person. No third-party advances will be issued unless the traveler is away from the East Lansing area through the departure date. In this case, the advance will be issued as a check made payable to the traveler only and will require their endorsement prior to deposit. c. A non-interest bearing promissory note will be issued for each advance by the Travel Advance Section. This note specifies the repayment date. When the traveler is away from the East Lansing area and requests an additional advance, the original authorization must be presented again to the Travel Advance Section and signed for the employee by the unit administrator. d. If an advance is requested for approved undergraduate student travel, the authorization part of the Travel Voucher must be prepared in the name of the student(s) and a faculty or staff member responsible for the student(s). The promissory note will be issued to the faculty or staff member who may then cash it and distribute it to the student(s). The faculty or staff member will be held responsible for the repayment of the advance. http://ctlr.msu.edu/mbp/mbp 70 .htm 10/5/2001 MSU Manual of Business Procedures: Volume 1 Revised October 2001 Page 32 of 38 e. Advances may be received in either of the following two ways: 1) Cash - the promissory note may be exchanged for cash in the Cashier's Office. If exchange of the note is done by a person other than the traveler, it will be issued by check only, made payable to the traveler. 2) Check - the promissory note for any amount may be exchanged for a cashier's check in the Cashier's Office. 6. Repayment of an Advance a. All travel advances are due no later than 30 days after the date the trip is completed (return date). Due dates may be extended on a case by case basis upon approval of a written request submitted to the Travel Advance Section prior to the original due date. Failure to promptly repay a travel advance may result in the traveler incurring taxable income for the outstanding amount. Repayment of the unpaid advance will remain an obligation of the traveler. b. If a travel advance is not paid by the due date, the amount may be deducted from the employee's payroll or stipend check. If payroll or stipend deductions are required to repay a traveler's advance, loss of the travel advance privilege may result. c. The unit administrator's signature guarantees repayment of a travel advance from departmental funds if the appropriate vouchers are not submitted. The advance will remain an obligation of the traveler until the completed Travel Voucher is submitted. d. Payments may be made in person in the Cashier's Office, 110 Administration Building, or by mail to the University Travel Office, 370 Administration Building. 7. Graduate Fellow Advance a. A Graduate Fellow advance is available for graduate students going overseas to collect data for their doctoral dissertations under grants and contracts administered by MSU. In general, the period of travel is usually six months to one year. The advance will provide operating funds for such items as travel expenses, data collection expenses, assistant fees, clerical assistance, etc., whose costs are reimbursable under grants or contracts. The amount of the advance will normally be equal to three months estimated reimbursable expenditures where it is possible to mail replenishment vouchers back to MSU campus. The repayment date of the advance will be 30 days after the return to campus. In cases where a Fellow extends his/her travel en route to campus, the advance repayment date will be extended 30 days from the departure date from the research location. b. Requests for the advance should be in letter form addressed to the Director of Contract and Grant Administration. The letter should contain the following http://ctlr.msu.edu/mbp/mbp70.htm 10/5/2001 MSU Manual of Business Procedures: Volume 1 Revised October 2001 Page 33 of 38 information: 1) Name and social security number of the Graduate Fellow 2) Dates of departure and return 3) Research location 4) Grant or contract account, account name, account number 5) Amount of estimated expenditures per month by expenditure type 6) Amount of advance requested 7) Requested payment date 8) Signature of unit administrator c. After approval, the advance may be obtained from the University Travel Office by the Graduate Fellow. B. Travel Vouchers 1. Voucher Forms a. If reimbursement is requested, travel expense claims should be itemized in the expense reimbursement section of the Travel Voucher form obtainable from the MSU Travel Office web site: ctlr.msu.edu/travel or General Stores, stock number 140-27860. The web site form may be completed using computer spreadsheet. b. Each traveler must submit a separate Travel Voucher for his/her own expenses unless the travel is team travel. c. Travel Vouchers may be completed via web site download and computer spreadsheet program. The Travel Vouchers may also be typed and all copies submitted according to instructions printed on the reverse side of the pink copy of the Travel Voucher form . The complete name and address of the payee must be included. If the payee is on campus, the address must conform to requirements established by the Campus Mail Service. 2. Preparation of Vouchers a. Travel Vouchers for reimbursement are to be submitted to the Travel Office within 30 days after return from a trip. Additionally, Travel Vouchers should be submitted for reimbursement within the fiscal year to which they relate when practicable. b. If more than one account number is to be charged, the various costs claimed should be marked, e.g. using an asterisk, to indicate the appropriate account. http://ctlr.msu.edu/mbp/mbp70. h tm 10/5/2001 MSU Manual of Business Procedures: Volume 1 Revised October 2001 Page 34 of 38 c. The expense reimbursement section of the Travel Voucher must show detailed itemization of the travel and the type and cost of the accommodations used. If claiming expenses for business guests, give name(s) of person(s), position(s) and specific business purpose. d. Meal per diem will be paid only if the business trip includes an overnight stay. If an overnight stay has been required and documented, and the traveler was in travel status during an entire day, the meal per diem may be lumped together for the three meals and claimed as one amount for the entire day. For one business trip, per diem is also reimbursable for partial travel days which bracket an overnight stay. For such partial days, the per diem attributable to individual meal periods (e.g. BR, LU or DI) should be itemized on the travel reimbursement voucher. e. Tips for taxi or limousine service (not to exceed 20% of cost) should be listed on the left side of the voucher with other transportation expenses and labeled accordingly (e.g. Tips -- taxi). Each payment of a taxi/limousine tip should be listed adjacent to the expense for the taxi/limousine transportation. Other permissible tips should be listed on the right side of the voucher with other subsistence and miscellaneous expenditures. f. Original ticket receipts (travel agency invoices also required for international travel), unused flight coupons, and other original receipts are to be stapled to the original Travel Voucher. If airfare has been directly billed to the MSU account number, complete the "Airfare/Rail Direct Bill" portion of the voucher and add the airline ticket invoice number at the top of the voucher. Direct Bill airfare totals are not a part of reimbursments. g. Refer to the Reimbursement Chart (see Exhibit 70-A) for reimbursement rates. h. If the traveler's reimbursable expenses were limited to an amount less than actual, this limit amount should be clearly noted in the travel authorization section and below the "Total Claim" space of the voucher and labeled as "Limit." i. The final total and the signatures of the traveler and the persons approving the claim should be on the FIRST page of the Travel Voucher. If the traveler is not an employee of the University, write "Non-MSU" in the signature block of the voucher. j. If it is not possible for the payee to sign the Travel Reimbursement Voucher due to the payee being out of the area or otherwise unavailable for an extended period of time, it is acceptable for the payee to sign a faxed copy of the fully completed voucher. The signed voucher must reflect the detailed and total claim submitted on their behalf. The departments should attach this faxed copy (marked as "COPY") to the original, which will state "Faxed Signature Attached" in the payee signature space prior to submitting the voucher for payment. In unusual circumstances, when the department is unable to obtain the certification of the payee either by original signature or by fax : http://ctlr.msu.edu/mbp/mbp 70 .htm 10/5/2001 MSU Manual of Business Procedures : Volume 1 Revised October 2001 Page 35 of 38 1. The payee may submit an endorsement of the claim made on their behalf using e-mail. The payee must acknowledge the business purpose, items purchased and voucher amount in their e-mail. This e mail should be printed out and attached to the original voucher, which will state "E-mail Attached" in the payee signature space. Or, 2. Someone administratively senior to the payee may sign in the payee signature space along with the statement "Signing for Payee." [Please note: By signing, the "signer" certifies that they have received verbal authorization to file the claim on behalf of the payee.] k. Travel Vouchers and the applicable receipts are forwarded to the MSU Travel Office, 370 Administration Building, 353-4882. If voucher is completed on computer, please make one (1) extra copy of voucher (two (2) extra copies if the travel is out of state) and submit all copies to the MSU Travel office. 1. The Travel Office audits all Travel Vouchers. If a travel advance related to a Travel Voucher being processed has not yet been repaid, the Travel Advance Section will deduct the amount owed and refund the difference or bill for the balance due. m. After audit, the Travel Office forwards the voucher to Accounting for verification of authorized signatures and correctness of account numbers. Accounting prepares a check and inserts the check number on the voucher. n. The Travel Voucher is distributed as follows: Original Copy 1 Copy 2 Retained by Accounting Office. Sent to payee with check. After audit, this copy is sent to the Office of Planning and Budget - - - - 1 ( ~ vJ VtJl{~lv o. The check is mailed to the payee at the address indicated on the voucher. p. Weekly Voucher Check Summary Report. Each week the Accounting Department distributes a report which summarizes, by account number, all checks written for that week. For each check; the summary report indicates the payee name, check number, pay date, type of voucher, account number and object code charged and the amount. C. Report of Out-of-State Travel 1. General Policy Employees returning from foreign or out-of-state travel , either with or without reimbursement, are required to complete this section of the Travel Voucher. http://ctlr.msu.edu/mbp/mbp 70. htm 10/5/2001 MSU Manual of Business Procedures: Volume 1 Revised October 2001 Page 36 of 38 2. Purpose The Report on Out-of-State Travel serves several purposes: a. It provides the permanent travel records for the Office of Planning and Budgets and the University Archives. b. It provides the basic data from which the Office of Planning and Budgets compiles the annual report of out-of-state and foreign travel. c. Each traveler is asked to indicate on the travel report the major purpose for which the trip was undertaken, as follows: 1) Travel in support of professional improvement. This includes attendance at meetings of professional societies, institutes, workshops, training courses, etc. (The traveler may present a paper, or serve on a committee at a national meeting, but the basic purpose of the meetings is professional improvement.) Travel in this category also includes visits to other institutions for the purpose of "keeping up to date" on methods, materials, procedures, policies, etc. 2) Travel in support of instructional programs. This includes travel to plan, coordinate, recruit faculty or secure resources for, or conduct programs of instruction for University students. 3) Travel in support of research. This includes travel to plan, coordinate, secure resources for, or conduct research programs. It also includes attendance at meetings or symposia in which the discussion involves a limited portion of the discipline and is centered primarily around the research interests of the participants. 4) Travel in support of the public service programs of the University. This includes travel to serve as a resource person at meetings of industrial, governmental, educational, grower or lay groups. It includes serving on federal panels, site visits and accreditation visits, and it includes many of the University Outreach and MSU Extension Service programs. 5) Travel in support of administration. This includes travel related primarily to the administrative or supportive functions of the University rather than to the disciplinary programs. 6) Travel in support of intercollegiate competition. This includes travel in support of or in connection with intercollegiate athletic contests, music or art competitions, debates, forensic programs, judging contests or other sanctioned University events. 7) Travel in support of international programs. Travel may be either foreign or domestic, but is concerned with programs designed to improve http://ctlr.msu.edu/mbp/mbp70.htm 10/5/2001 MSU M anual of Business Procedures: Volume 1 Revised October 2001 Page 37 of 38 conditions in foreign countries or to improve relationships with foreign countries. 8) Miscellaneous. Travel not defined in other categories. D. Insurance 1. Insurance on Vehicles - Refer to Sec:tion_3 5 Office of Risk Management & Insurance in the Manual of Business Procedures. 2. Travel Accident Insurance - Please refer to MSU Human Resource Staff Benefits. 3. Reporting Accidents - Refer to S~c:ti9nJ5JIL,E. Office of Risk Management & Insurance in the Manual of Business Procedures. E. Travel under Contract, Gift and Grant Funds 1. When travel is funded under contract, gift or grant funds, all requests for authorization and reimbursement must be in accordance with the regulations of the University, or research grant or contract, whichever is the most restrictive. 2. Travel must be restricted to those who are closely associated with the contract, gift or grant. Unit administrators and deans must make sure that travel authorizations and Travel Vouchers clearly state the relationship of the travel to the contract, gift or grant. Expenditures disallowed for failure to conform to contract gift or grant regulations are charged against departmental or college budgets. 3. Employees whose international travel is funded by the U.S. Agency for International Development (AID) contracts must be covered by Medical Emergency Evacuation insurance through the MEDEX Assistance Program purchased from the vendor specified by AID. This requirement does NOT apply to AID Grants or Cooperative Agreements ; employees traveling under these funding instruments are automatically covered by the University's Emergency Medical Evacuation insurance. For AID contract-funded international travel, the following procedure should be followed. At least three weeks prior to departure, an application to enroll in the MEDEX Assistance Program should be prepared and sent to the Office of Contract and Grant Administration for approval. The application should include the MSU account number to which the insurance should be charged. (Contracts which require this coverage, allow the expense to be charged to the contract.) Upon approval, Contract and Grant Administration will forward the application to the Office of Risk Management and Insurance for processing. Applications may be obtained from the Office of Risk Management and Insurance (5-5022). VI. EXHIBITS http://ctlr.msu.edu/mbp/mbp 70 .htm 10/5/2001 MSU Manual of Business Procedures: Volume 1 Revised October 2001 Page 38 of 38 Exhibit 70-A. Reimbursement Chart 1=',J<,hibit 7 0:::B . Federal Key Cities - Meal Per Diem Rates E;.:,hibit70:::C. In-State (One -Way) Mileage Chart Exhibit 70-D. Out-of-State (One-Way) Mileage Chart Exhibit?O~E. Travel Authorizati on Form. VD u..~ Exhibit}O-F. International Travel Per Diem And Lodging Reimbursement Work Sheet Exhibit 70-0. Work Sheet for International Travel Expense Other Than Lodging and M&IE E;.:,hibit70:::JJ. International Travel Scenario Exhibit ]QJ. Completed Travel Voucher/Work Sheets (Foreign) Exhibit 70-J. International Travel Per Diem and Lodging Reimbursement Work Sheet E1hibit}Q~K Direct Billing Application http://ctlr.msu.edu/mbp/mbp70.htm 10/5/2001 ~ Q /wrl~\11"1 ~ .51.-e,f, o -, 2{!_ · v' c. The unit administrator's signature guarantees repaym~nt of a travel advance from departmental funds if the appropriate vouchers are not submitted. The advance will remain an obligation of the traveler until the completed Travel Voucher is submitted. d. Payments may be made in person in the Cashier's Office, 110 Administration Building, or by mail to the University Travel Office, 370 Administration Building. 7. Graduate Fellow Advance a. A Graduate Fellow advance is available for graduate students going overseas to collect data for their doctoral dissertations under grants and contracts administered by MSU. In general, the period of travel is usually six months to one year. The advance will provide operating funds for such items as travel expenses, data collection expenses, assistant fees, clerical assistance, etc., whose costs are reimbursable under grants or contracts. The amount of the advance will normally be equal to three months estimated reimbursable expenditures where it is possible to mail replenishment vouchers back to MSU campus. The repayment date of the advance will be 30 days after the return to campus. In cases where a Fellow extends his/her travel en route to campus, the advance repayment date will be extended 30 days from the departure date from the research location. b. Requests for the advance should be in letter form addressed to the Director of Contract and Grant Administration. The letter should contain the following information: 1) Name and social security number of the Graduate Fellow 2) Dates of departure and return 3) Research location 4) Grant or contract account, account name, account number 5) Amount of estimated expenditures per month by expenditure type 6) Amount of advance requested 7) Requested payment date 8) Signature of unit administrator c. After approval, the advance may be obtained from the University Travel Office by the Graduate Fellow. B. Travel Vouchers 1. Voucher Forms a. If reimbursement is requested, travel expense claims should be itemized in the expense reimbursement section of the Travel Voucher form obtainable from the MSU Travel Office web site: ctlr.msu.edu/travel or General Stores, stock number 140-27860. The web site form may be completed using computer spreadsheet. b. Each traveler must submit a separate Travel Voucher for his/her own expenses unless the travel is team travel. c. Travel Vouchers may be completed via web site download and computer spreadsheet program. The Travel Vouchers may also be typed and all copies submitted according to instructions printed on the reverse side of the pink copy of the Travel Voucher form. The complete name and address of the payee must be included. If the payee is on campus, the address must conform to requirements established by the Campus Mail Service. TRAVEL Section 70, V.B . 2. Preparation of Vouchers a. Travel Vouchers for reimbursement are to be submitted to the Travel Office within 30 days after return from a trip. Additionally, Travel Vouchers should be submitted for reimbursement within the fiscal year to which they relate when practicable . b. If more than one account number is to be charged, the various costs claimed should be marked , e.g. using an asterisk, to indicate the appropriate account. c. The expense reimbursement section of the Travel Voucher must show detailed itemization of the travel and the type and cost of the accommodations used . If claiming expenses for business guests, give name(s) of person(s), position(s) and specific business purpose. d. Meal per diem will be paid only if the business trip includes an overnight stay . If an overnight stay has been required and documented, and the traveler was in travel status during an entire day, the meal per diem may be lumped together for the three meals and claimed as one amount for the entire day. For one business trip, per diem is also reimbursable for partial travel days which bracket an overnight stay . For such partial days, the per diem attributable to individual meal periods (e.g. BR, LU or DI) should be itemized on the travel reimbursement voucher. e. Tips for taxi or limousine service (not to exceed 20% of cost) should be listed on the left side of the voucher with other transportation expenses and labeled accordingly (e.g. Tips -- taxi). Each payment of a taxi/limousine tip should be listed adjacent to the expense for the taxi/limousine transportation. Other permissible tips should be listed on the right side of the voucher with other subsistence and miscellaneous expenditures. f. Original ticket receipts (travel agency invoices also required for international travel), unused flight coupons, and other original receipts are to be stapled to the original Travel Voucher. If airfare has been directly billed to the MSU account number, complete the "Airfare/Rail Direct Bill" portion of the voucher and add the airline ticket invoice number at the top of the voucher. Direct Bill airfare totals are not a part of reimbursments. g. Refer to the Reimbursement Chart (see Exhibit 70-A) for reimbursement rates . h. If the traveler's reimbursable expenses were limited to an amount less than actual , this limit amount should be clearly noted in the travel authorization section and below the "Total Claim" space of the voucher and labeled as "Limit." i. The final total and the signatures of the traveler and the persons approving the claim should be on the FIRST page of the Travel Voucher. If the travele·r is not an employee of the University, write "Non MSU" in the signature block of the voucher. j p9ssible for the payee to sign the Trav.el Reimburs~~ ent Voucher due totb~p~yeeb'~irig' area or otherwise unavailable for an extended perioqpftime, it is acceptapleforthe payee to sig . axed copy of the fully completed voucher. The sigdf;lg youcher must reflecfthe det.ailed and total claim submitted on their behalf:> The departments shoUldattach this faxed copy (marked as: "COPY")to the original , which w.m state "Faxed Signature .A.tt9c:;bf;ld" in the payee signaturf;l sgace prior to S!;!bmitting the voucher }qr payment. ·· · · ···· · · · • - '1n urfus ual circumstances, when the department is unable to obtain the certification of the payee eitbgL pyoriginal signature or by:f9~; ..... . . "' J:i!if: IP~ payee may sup · R~xef;l ~ ackno.yv1f;l voucher amount in thei vouqh,~r, wh ich will state ''E:..mail Attached" in the payee signature space. Or, seiij~nt of the q1aim iiiJ~s:J~ioqih~ir oehalfu~ing .e-rhaH: .T he · · usmess purpose, dates ottrave1. trave1 destinatian;";:1nd · .. 1.+This e-mail should be printed out and attached toJ hf;l original, 2. Someone administratively senior to the payee may sign in the payee signature space along [Please note: By signing , the "signer'' certifies that with the statement "Signing For Payee." !hey have received verbal authorization to file the claim on behalf of the payee.] 2. Preparation of Vouchers a. Travel Vouchers for reimbursement are to be submitted to the Travel Office within 30 days after return from a trip. Additionally, Travel Vouchers should be submitted for reimbursement within the fiscal year to which they relate when practicable. b. If more than one account number is to be charged, the various costs claimed should be marked, e.g. using an asterisk, to indicate the appropriate account. c. The expense reimbursement section of the Travel Voucher must show detailed itemization of the travel and the type and cost of the accommodations used. If claiming expenses for business guests, give name(s) of person(s), position(s) and specific business purpose. d. Meal per diem will be paid only if the business trip includes an overnight stay. If an overnight stay has been required and documented, and the traveler was in travel status during an entire day, the meal per diem may be lumped together for the three meals and claimed as one amount for the entire day. For one business trip, per diem is also reimbursable for partial travel days which bracket an overnight stay. For such partial days, the per diem attributable to individual meal periods ( e.g. BR, LU or DI) should be itemized on the travel reimbursement voucher. e. Tips for taxi or limousine service (not to exceed 20% of cost) should be listed on the left side of the voucher with other transportation expenses and labeled accordingly (e.g. Tips -- taxi). Each payment of a taxi/limousine tip should be listed adjacent to the expense for the taxi/limousine transportation. Other permissible tips should be listed on the right side of the voucher with other subsistence and miscellaneous expenditures. f. Original ticket receipts (travel agency invoices also required for international travel), unused flight coupons, and other original receipts are to be stapled to the original Travel Voucher. If airfare has been directly billed to the MSU account number, complete the "Airfare/Rail Direct Bill" portion of the voucher and add the airline ticket invoice number at the top of the voucher. Direct Bill airfare totals are not a part of reimbursments. g. Refer to the Reimbursement Chart (see :E:x:Jiil>it]Q:::A) for reimbursement rates. h. If the traveler's reimbursable expenses were limited to an amount less than actual, this limit amount should be clearly noted in the travel authorization section and below the "Total Claim" space of the voucher and labeled as "Limit." ~ J _ > write "Non-MSU" in the signature block of the voucher. i. The final total and the signatures of the traveler and the persons approving the claim should be on the FIRST page of the Travel Voucher. If the traveler is not an employee of the University, ~ / (__!:J' . ~ C. t) j. Travel Vouchers and the applicable receipts are forwarded to the MSU Travel Office, 370 Administration Building, 353-4882. If voucher is completed on computer, please make__twcf -~extra ~ofvoucheW:nd submit aU copies ~o th~ MSU Travel.office. {JO fi.( ( t--) ep{r~ ~ 1 e I L f- 'fk. --f'r.-w-t.,(' U ....... ,.+~ I) . () ivf O f J f~ _ .1- J ~ k. The Travel Office audits all Travel Vouchers. If a travel advance related to a Travel Voucher 1 ~ being processed has not yet been repaid, the Travel Advance Section will deduct the amount owed and refund the difference or bill for the balance due. 1. After audit, the Travel Office forwards the voucher to Accounting for verification of authorized signatures and correctness of account numbers. Accounting prepares a check and inserts the check number on the voucher. m . The B@n -gwputerize:art-ment-for-tlteirrecmds:- .Blue- Sent to payee with check. Retained by the Travel Advance Office when---a-tr-a-vel--advarrce--s-i-s-sttetl~- Aft~ i~~i~uC??Y is sent to the Office of Planning and Budgets. ~~O f - n. The check is mailed to the payee at the address indicated on the voucher. o. Weekly Voucher Check Summary Report. Each week the Accounting Department distributes a report which summarizes, by account number, all checks written for that week. For each check, the summary report indicates the payee name, check number, pay date, type of voucher, account number and object code charged and the amount. C. Report of Out-of-State Travel 1. General Policy Employees returning from foreign or out-of-state travel, either with or without reimbursement, are required to complete this section of the Travel Voucher. 2. Purpose The Report on Out-of-State Travel serves several purposes: a. It provides the permanent travel records for the Office of Planning and Budgets and the University Archives. b. It provides the basic data from which the Office of Planning and Budgets compiles the annual report of out-of-state and foreign travel. c. Each traveler is asked to indicate on the travel report the major purpose for which the trip was undertaken, as follows: 1) Travel in support of professional improvement. This includes attendance at meetings of professional societies, institutes, workshops, training courses, etc. (The traveler may present a paper, or serve on a committee at a national meeting, but the basic purpose of the meetings is professional improvement.) Travel in this category also includes visits to other institutions for the purpose of "keeping up to date" on methods, materials, procedures, policies, etc. 2) Travel in support of instructional programs. This includes travel to plan, coordinate, recruit faculty or secure resources for, or conduct programs of instruction for University students. 3) Travel in support of research . This includes travel to plan, coordinate, secure resources for, or conduct research programs. It also includes attendance at meetings or symposia in which the discussion involves a limited portion of the discipline and is centered primarily around the research interests of the participants. 4) Travel in support of the public service programs of the University. This includes travel to serve as a resource person at meetings of industrial, governmental, educational, grower or lay groups. It includes serving on federal panels, site visits and accreditation visits, and it includes many of the University Outreach and MSU Extension Service programs. 5) Travel in support of administration. This includes travel related primarily to the administrative or supportive functions of the University rather than to the disciplinary programs. 6) Travel in support of intercollegiate competition. This includes travel in support of or in connection with intercollegiate athletic contests, music or art competitions, debates, forensic programs, judging contests or other sanctioned University events. 7) Travel in support of international programs. Travel may be either foreign or domestic, but is concerned with programs designed to improve conditions in foreign countries or to improve relationships with foreign countries. 8) Miscellaneous. Travel not defined in other categories. D. Insurance 1. Insurance on Vehicles - Refer to Section_35 Office of Risk Management & Insurance in the Manual of Business Procedures. 2. Travel Accident Insurance - Please refer to MSU Human Resource Staff Benefits. 3. Reporting Accidents - Refer to Section 35 III., E Office of Risk Management & Insurance in the Manual of Business Procedures. E. Travel under Contract, Gift and Grant Funds 1. When travel is funded under contract, gift or grant funds, all requests for authorization and reimbursement must be in accordance with the regulations of the University, or research grant or contract, whichever is the most restrictive. 2. Travel must be restricted to those who are closely associated with the contract, gift or grant. Unit administrators and deans must make sure that travel authorizations and Travel Vouchers clearly state the relationship of the travel to the contract, gift or grant. Expenditures disallowed for failure to conform to contract gift or grant regulations are charged against departmental or college budgets. 3. Employees whose international travel is funded by the U.S. Agency for International Development (AID) contracts must be covered by Medical Emergency Evacuation insurance through the MEDEX Assistance Program purchased from the vendor specified by AID. This requirement does NOT apply to AID Grants or Cooperative Agreements; employees traveling under these funding instruments are automatically covered by the University's Emergency Medical Evacuation insurance. For AID contract-funded international travel, the following procedure should be followed. At least three weeks prior to departure, an application to enroll in the MEDEX Assistance Program should be prepared and sent to the Office of Contract and Grant Administration for approval. The application should include the MSU account number to which the insurance should be charged. (Contracts which require this coverage, allow the expense to be charged to the contract.) Upon approval, Contract and Grant )\dministration will forward the application to the Office of Risk Management and Insurance for processmg. Applications may be obtained from the Office of Risk Management and Insurance (5-5022). VI. EXHIBITS Exhibit 70-A. Reimbursement Chart 1:<'.;x.llfbit]Q~~- Federal Key Cities - Meal Per Diem Rates Exhibit 70-C. In-State (One -Way) Mileage Chart 1 Exhibit 70-D. Out-of-State (One-Way) Mileage Chart Exhibit 70-E. Travel Authorization Form J3xll,il:)it7Q::::E- International Travel Per Diem And Lodging Reimbursement Work Sheet .Ex}lil:)it7Q-Q. Work Sheet for International Travel Expense Other Than Lodging and M&IE Exhibit 70-H. International Travel Scenario Exhibit 70-I. Completed Travel Voucher/Work Sheets (Foreign) E\}1il_)it70-J. International Travel Per Diem and Lodging Reimbursement Work Sheet .Exhil:)it]Q~K Direct Billing Application / ~~· Y;o/{0 SECTION 7 4: INVOICE PROCESSING SYSTEM I. GENERAL The invoice processing system is used to process payments for all items obtained by purchase order (excluding purchase order drafts). II. PROCEDURES A. Upon receipt of a vendor invoice, Accounts Payable will enter the invoice into the procurement system. The invoice will then be audited against the corresponding purchase order. B. Once the invoice is matched by the system, approved and scheduled for orutmE*l'T-:-G...copy of the invoice along with a Negative Confirmation form ( Exhibit XXX · forwarded to the department for review. 7 'f~ll- c-I-Hccounts Payable is notified through the_,.S¥stem audit that the invoice submitted by the supplier is at variance with the terms of the University purchase order, a copy of the invoice is forwarded to the Purchasing Department buyer for resolution. All variances must be resolved. This may require a change order to the original purchase order, acceptance of the variance by the ordering and Purchasing departments, adjust the invoice to conform to the purchase order terms , or return of the invoice to the vendor for resolution. D. Three days before the scheduled due date of the invoice, a check is created to pay the appropriate vendor for the purchase. A Weekly Department Invoice Summary report is provided for each departmental account that invoice payments were issued to during the period. E. Upon receipt of the invoice and negative confirmation, the ordering department should verify receipt of materials or services covered by the vendor. invoice. 1. If the materials or services have been satisfactorily received, the department should retain the invoice copy for their records. No further action is required. The invoice will be paid just prior to the scheduled due date indicated. 2. If payment should not be made (damaged goods, incomplete shipment, etc.), the department should immediately contact the Accounts Payable department to stop the check creation process and follow up with the appropriate buyer in the Purchasing Department to resolve the issue. Without Purchasing approval, AP will only hold the check until the scheduled due date. F. Applicable credits and discounts, if any, will be deducted by Accounts Payable prior processing payments for the particular vendor. G. For any changes to the PO, a change order must be processed through the Purchasing Department. This includes increasing or decreasing the original order quantity, adding or deleting line items, changing specifications, changing account number, etc. H. Accounts Payable office maybe contacted via phone 353-2011, e-mail directly to invoice auditor, or web page, http://ctlr.msu.edu/acctg/invoiceconf.asp III. EXHIBITS Exhibit 74-A. Negative Confirmation [ l INVOICE PAYMENT NOTIFICATION (REALITY! SYSTEM) PROMPT DEPARTMENTAL REVIEW REQUIRED Instructions for Processing Please examine the payment(s) listed on the enclosed report(s). The invoice itemized on each report is scheduled to be paid in time to reach the supplier by the Scheduled Due Date noted on the report. If payment should proceed, no response from you is reqlJired . The Purchasing Department obtains the best payment terms from vendors and the Controller's Office pays suppliers based on those terms. Accordingly, the listed payments are due and will be paid by the Scheduled Date unless you advise us not to make payment. If the invoice should NOT be paid, you must notify Accounts Payable and the buyer (noted to the right side of the report) at least five days before the Scheduled Due Date. 1. You may notify Accounts Payable via our "Invoices" web page at http:llctlr.msu.edu/acctglinvoiceconf.asp. Please provide all information requested. We will follow up with you . Or, 2. You may telephone us at (517) 353-2011 to alert us to a problem with the transaction. Ask for the auditor named in the rightmost column of the report. Accounts Payable 360 Administration Bldg East Lansing, Ml 48824-1046 MBP Section 75 VII. NONRESIDENT ALIEN PAYEES Payments to nonresident alien payees of compensation, rents, royalties, prizes, awards, scholarships/fellowships for non-enrolled students, allowances, and reimbursement of undocumented travel expenses are subject to special Internal Revenue Service rules. See section 77 concerning payments to nonresident aliens . MICHIGAN STATE UNIVERSITY September 20, 2001 TO: FROM: MAU Budget Personnel David B. Brower, Controller ~ SUBJECT: DISBURSEMENT VOUCHER PROCESSING ISSUES The attached "Voucher Processing Issues" document will address certain processing requirements relating to disbursement vouchers; specifically, the signatures required to authorize them and the number of voucher copies that are to be submitted for processing . The signatures of payees and approvers serve an important internal control function supporting the payment of disbursement vouchers. In order to meet accountability documentation standards, the payee submitting the voucher is expected to personally sign the voucher. Unfortunately, a growing number of vouchers submitted for processing lack the payee's signature. The attached notice summarizes the existing signature requirements. It also announces special signature procedures for use in unique situations that will help units deal with obtaining/providing the signature of payees who are not physically present to provide their signature. 5 OFFICE OF THE CONTROLLER Michigan State University 305 Administration Building East Lansing, Ml 48824-1046 517/355-5020 FAX: 517/412-5269 http://ctlr.msu.edu The availability and increasing use of downloadable disbursement voucher forms via the Controller's Office Web site http://ctlr.msu.edu/download and other local sources has diminished the use of pre-printed forms available through University Stores. Unfortunately, many of the vouchers submitted using downloaded templates lack sufficient copies and notation as "COPY". This results in delayed processing for all vouchers. This reminder highlights the need to submit disbursement vouchers with sufficient, properly identified copies. Please review Section 75 of the Manual of Business Procedures for detailed policies and procedures for processing disbursement vouchers. The Manual is available on our Web site at http://ctlr.msu.edu/mbp. Our long-term goal is to provide an online facility for preparing and submitting disbursement "vouchers" including routing, authorization, documentation and storage. Until then, we hope the incremental technology we can make available to you is beneficial. Thank you for your assistance with this matter. Encl. MSU is an affirmative-action, equal-opportunity institution. Controller's Office Voucher Processing Issues September 19, 2001 Please review the following requ irements. Vouchers not meeting these requirements may be returned . A. Payee Signatures The payee signature is required on travel and reimbursement vouchers as it indicates their concurrence with the amount and content of the voucher submitted . The Manual of Business Procedures stipulates that only in instances of payments to non-MSU payees is the signature not required . (Even in these cases, while not required , it is preferable that the payee signs the voucher.) If it is not possible for the payee to sign the travel/reimbursement voucher due to the payee being out of the area or otherwise unavailable for an extended period of time, it is acceptable for the payee to sign a faxed copy of the fully completed voucher. The signed voucher must reflect the detailed and total claim submitted on their behalf. The departments should attach this faxed copy (marked as "COPY") to the original, which will state "Faxed Signature Attached" in the payee signature space prior to submitting the voucher for payment. In unusual circumstances, when the department is unable to obtain the certification of the payee either by original signature or by fax : 1. The payee may submit an endorsement of the claim made on their behalf using e-mail. For travel reimbursements, the payee must acknowledge the business purpose, dates of travel, travel destination , and voucher amount in their e mail. For other reimbursements, the business purpose and voucher amount must be acknowledged. This e-mail should be printed out and attached to the original voucher, which will state "E-mail Attached" in the payee signature space. Or, 2. Someone administratively senior to the payee may sign in the payee signature space along with the statement "Signing For Payee ." file the claim on behalf of the payee.] [Please note: By signing , the "signer'' certifies that they have received verbal authorization to B. Departmental Approval Signatures All vouchers require an original signature of an authorized signer for the account(s) charged . Before travel commences the travel authorization part of the travel voucher should be submitted to and approved by someone administratively senior to the traveler. The original authorized travel voucher should be maintained in the respective department. The final completed travel voucher submitted to the MSU Travel Office for reimbursement must be signed by an authorized signer in the "Reviewed and Verified" space. Reimbursement vouchers must have the approval and signature of an authorized signer who is administratively senior to the payee in the "Administrative Senior'' space. C. Missing Voucher Copies Please provide sufficient copies of vouchers when submitting them for processing. When copies are missing, Controller's Office staff must delay processing those vouchers to make sufficient copies to complete the voucher sets. Vouchers submitted without sufficient copies on an ongoing basis may be returned to the submitting department to complete the voucher sets. ALSO NOTE: When providing the necessary copies, please mark them clearly as copies to prevent them from being processed as originals, resulting in duplicate payments. Direct payment vouchers require one original and one copy. Multiple check vouchers require one original and one copy. Reimbursement vouchers require one original and one copy. Travel reimbursement vouchers require one original and one copy (plus one additional copy if for out-of-state travel). S:\COMMON\TEMP\Reimbursement Signatures & Voucher Copies.doc saved 09/19/01 5:04 PM by Greg Sober MICHIGAN srAre UNIVERSIDTY RECEIVE APR 1 9 2002 MICHIGAN STATE UN IVERS ITY PROFESSIONAL PERSONAL SERVICES CONTRACT WITH INDEPENDENT CONTRACTOR (This Contract form should be completed before work commences) Michigan t \ !W ~ ~ r~~~ilcontract as University) enters into a binding agreement with: Contractor: Address (home address, if individual): Phone No.: City: U.S. Citizen: Yes O No 0 Incorporated: Yes (') No Q If Yes, Profit Q Nonprofit Q . If No, pick type of business Sole Proorietorship Sole Proprietor, if ditferent from Contractor above: U.S. Social Security Number or U.S. Federal Employer Identification Number: Subject to backup withholding: Yes O No O If No, Country of Citizenship: If No, are you a non-resident alien? Visa Type State: Zip Code: and Residence: - - - - - - - - - - - - - - - Resident alien? - - - - - - - - - - - and give name of Partner or REPORTING PURPOSES ONLY COPY TO PURCHASING WHEN CONTRACT IS WITH WOMAN/MINORITY-OWNED VENDOR (EVEN IF < OR = $10,000). 51 % Ownerships: Woman OwnedQ Minority Owned: African Amer. 0 Hispanic Amer. 0 Native Amer.Q Asian-Pacific Amer.Q Asian-Indian Amer.O NATURE OF SERVfCES TO BE RENDERED: PERFORMED AT (LOCATION): PERFORMANCE SCHEDULE: Sta11ing date: COMPENSATION INFORMATION: Ending date: Total hours: Account(s) to be charged.:...: _ __ ___ _ ___ _____ __________ Payment t e rm s . : . . . : - - - - - - - - - - - - - - - Rate of Pay: (indicate hourly, daily, total project, e t c . ) " '$ - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Services shall not exceed: ~$ _ _ _ _ _ ______ _____ __ _ Expenses shall not exceed: $ - - - - - - - - - - - - - - - - Nature of Expenses: DEPARTMENTAL CONTACT PERSON: The Contractor should communicate with the following departmental representative regarding this contract: Name: Address: The Department's responsibility for supporting the performance of services is limited to the fo llowing: Phone No.: CONDrTIONS AND ROUTING PROCEDURE: I. INDEPENDENT CONTRACTOR. The Contractor will act as an independent contractor under this Contract, and neither the Contractor nor any employee or agent of the Contractor is an employee of the University due to this Contract. The Contractor will provide the services and achieve the results specified by the University free from the direction or control of the University as to means and methods of performance. 2. NONRESIDENT ALIEN . If the Contractor is a nonresident alien performing services in the United States or it's territories, the Contractor agrees that proof of visa status (194 Form) documenting authorization to receive payment for work performed along with a U.S social security number will be provided to the University prior to payment by the University. 3. ACCESS TO RECORDS. The Contractor shall maintain reasonable records, including evidence that the services actually were performed and the identity of all individuals paid for such services, and shall allow access to those records by the University, any sponsor, the State of Michigan, or the Comptroller General of the United States or their authorized representatives. ·4. OWNERSHIP OF WORK PRODUCTS. Any discovery, patent, copyright, invention, work papers, software, software applications, written materials, publications, data, information, by-product or end-product arising as a direct result of the performance of this Contract shall be the sole property of the University. The University hereby grants to Contractor a non-exclusive royalty-free 1ight and license to use for the Contractor's internal non-commercial a,i;c,h ~1.kl~rrrem-aerivi'tres-ath:mpnb'ltshed-data,-kncuM •. h materials and unpatented inventions or discoveries arising from this contract.,. reser , ing ,t t~e-l::>fl·tver"lJrt.~ e·sm 'tr robjem-mat,tel',J.o.-a~1:)'-11011~G€ Wntnere1a use .. (Continued on next page ... ) ~ [ ssmg payments for pa11ial perf01mance of services Current Payment (A) Prior Payment(s) B Total Payments (A+ B) Personal Services ... .. .. ............ .... ................................................. $ ___ _ _ Expenses ......... .................... ... ..... .. ... ... .. .............................. ... .. Total ............. ..... .......................... ............ .............. .......... .... ....... $ ___ 0~·~0~0 This is a Renewal Yes O No 0 o 00 $ 0.00 0.00 $ __ _...0..,.0..._0 MSU is an Affirmative Action/ Equal Opportunity Institution Page I 5. TERMINATION. Either the Universi ty or the Contractor may te1minate its ob ligations under this Contract by giving the other party prjor written notice of such termination, specifying the intended date of termination; provided, however, that upon request from the University, the Contractor shall continue performance until the University can find a replacement contractor or for an additional thirty (30) days after the specified termination date, whichever is the shorter time period. Upon termination, an equitable settlement shall be made for actual costs inculTed by the Contractor up to the date of termination. 6. UNIVERSITY EMPLOYEES. The Contractor will not hire any employee of the University to perform any services covered by thi s agreement without prior written approval from the Office of the Provost for academic employees or from the Assistant Vice President for Human Resources for non academic employees 7. CONFIDENT AL INFORMATION. The Contractor shall not publish or otherwise disclose, except to the University and except matters of public record, any infonnation or data obtained in the course of performance of this Contract from private indi viduals, organizations, or public agencies, in a publication by which th e information or data furnished by any particular person or establishment can be identified, except with the written consent of such person or estab lishment. 8. ACKNOWLEDGMENT OF SPONSORSH[P. The Contractor agrees that in any publication acknowledgment shall be made of sponsorship by the Univers ity and/or other sponsor by use of the following statement: "This work was performed under the sponsorship of THE BOARD OF TRUSTEES OF MICHIGAN ST ATE UNIVERSITY and (insert any other sponsor). This work does not necessarily represent the views of the University or the sponsoring agency." lfthe publication is copyrighted, the statement, "Reproduction of this ai1icle, with the customary credit to the so urce, is permitted." Shall be added. With the exception of acknowledging sponsorship of research, the name of the University may not be used in publications, news releases, advertis ing, speeches, technical papers, photographs, and other releases of inforn1ation regarding this Contract or data developed under this Contract without written approval of the University. 9. CONFLICT OF INTEREST. The Contractor affi rms that to the best of hi s/her knowledge there exists no actual or potential conflict between Contractor's family, business, or financial interests and hi s/her services under this Contract, and in the event of change in either hi s/her private interests or services under this Contract, he/s he will infotm the University regarding possib le conflict of interest which may arise as a result of such change. I 0. TOT AL AGREEMENT. This Contract contains the entire agreement between the parties supersed ing any prior or concurrent agreements as to the serv ices being provided, and no oral or written terms or conditions which are not contained in this Contract shall be binding. This Contract may not be changed except by mutual agreement of the parties reduced to writing and signed. 11. ASSIGNMENT/TRANSFER/SUBCONTRACTING. The Contractor shall not assign, transfer, subcon tract, or otherwise give to or impose on any other party any obligation or right of the Contractor under this Contract, without the prior written consent of the University. 12. INDEMNIFICATION. The Contractor shall indemnify, defend and hold the University hannless from any charge, fin e, penalty, or judgment arising out of, or in any way resulting from , the Contractor's performance under thi s Contract, and should the University be required to make payments or incur costs of defense (including reasonable attorney fees) for any such reason, the Contractor shall fully reimburse the University. The obligations of the Contractor under this paragraph 12 shall survive any termination of this Contract or completion of the Contractor's perfonnance under this Contract. CONTRACTOR ACCEPTANCE: I agree to the terms above and on the first page of this Contract. The amount of the charges for services under this Contract does not exceed my normal and customary rate. I certify that the Social Security Number or Federal Employer Id entification Number on the first page of this Contract is COITect and l am not subject to backup withholding unless otherwise noted. I am not a current Univenity employee or enrolled as an MSU student. Signature: Date: MICHIGAN STATE UNIVERSITY ACCEPTANCE: The service to be provided is necessary, the cost for the service is reasonable, and the service cannot now be provided by current University employees. The depa.rtment has retained documentation of the reasonableness of the cost and the selection process employed to secure the most qualified contractor available for contracts of $ 10,000 or less. Documentation of same is attached for all contracts for amounts greater than $ I 0,000. Signature: Signature: Signature: Signature : Authorized signer for account to be charged (also responsible for attaching documentation of bidding procedures followed or sole source justification). Date: Dean or Vice President or designate Contract and Grant approva l, if charging accounts 61-0000 to 6 1-9999 . Date: Date: Date: Purchasing Department for contracts greater than $ I 0,000. (See section 76 of the Manual of Business Procedures for guidance). Procedure for routing of Contract The Contract form should be comp leted before work commences. I. Originating department for Contractor' s signature and authorized signer for Copy Distribution: 2. 3. 4. account to be charged. Appropriate Dean or Vice President, if required. Contract and Grant Administration, if charging accounts 61 -0000 to 61-9999. Purchasing Department, ifreq uired (see section 76 of the University's Manual of Business Procedures for guidance). 5. Originating department, maintain until completion of services. 6. At comp letion of services (or for each partial payment), originating department acknowledges performance, forwards original contract with th e Direct Payment Voucher (for partial payments send original contract with the first payment and copies thereafter), original travel receipts , Contractor's signed invoice and other documentation, to Accounts Payable in the Controller' s Office for payment. Qiginal to Accounts Payable Copy to Originating Department Copy to Contractor Copy to Purchasing when contract is with Womail/ Minority-owned vendor ( even if < or = $10,000). Please refer to Section 76 of the Manual of Business Procedures for specifi c procedures on determining employee versus independent contractor status and processing of payments. Contact the Accounts Payable Department (5-0331) to determine proper payment procedure of nonresident alien Contractors and avai !able tax treaty provisions. Page 2 Pag From: To: Date: Subject: Hello Dave: "Loraine J. Hudson" 4/2/02 2:37PM Wording on Professional Services Contract We talked about an adjustment to the wording on MSU's standard Professional Services Contract. Here is some revised wording for the Ownership of Work Products section. Any discovery, patent, copyright, invention, work papers, software, software applications, written materials, publications, data, information, by-product or end-product arising as a direct result of the perfomance of this Contract shall be the sole property of the University. The University hereby grants to Contractor a non-exclusive royalty-free right and license to use for the Contractor's internal non-commercial research and development activities all unpublished data, know-how, materials and unpatented inventions or discoveries arising from this contract. Thanks, Lori From: To: Date: Subject: Loraine - Dave Brower Hudson , Loraine J. 4/20/02 2:27PM Re: [Fwd : Wording on Professional Services Contract] The revised wording noted below to Item 4, Ownership of Work Products, on the back of the Independent Contractor form, is fine . In reviewing this suggested revision, the only change is dropping the phrase ", .... reserving the right to the University to use such subject matter for any non-commercial uses." By means of this e-mail , I am requesting that Marge Toomey update the Manual of Business Procedures form (76-C) to reflect this revised wording asap. David Brower Assistant Vice President, Chief Financial Officer and Controller Michigan State University Phone - 517/355-5020 Fax - 517/432-5269 E-Mail - brower@ctlr.msu .edu »> "Loraine J . Hudson" 04/17/02 05:00PM »> Hi Dave - I just got the newsletter from Accounting containing reminders about the use of Professional Services contracts , which made me wonder about the issue below. Is the wording change I suggested underway, or were there other issues or concerns you wanted to discuss? Many thanks, Lori -------- Original Message -------- Subject: Wording on Professional Services Contract Date: Tue, 02 Apr 2002 14:45:26 -0500 From: "Loraine J. Hudson" To: brower@msu .edu Hello Dave: We talked about an adjustment to the wording on MSU's standard Professional Services Contract. Here is some revised wording for the Ownership of Work Products section. Any discovery, patent, copyright, invention, work papers, software, software applications, written materials, publications, data, information, by-product or end-product arising as a direct result of the perfomance of this Contract shall be the sole property of the University. The University hereby grants to Contractor a non-exclusive royalty-free right and license to use for the Contractor's internal non-commercial research and development activities all unpublished data, know-how, materials and unpatented inventions or discoveries arising from this contract. Thanks, Lori CC: Evon, Dan; Lynn, Pat; Sober, Greg; Toomey, Marge DIRECT PAYMENT Section 75.1.C. C. Preparation '7S-- ·/ .. )~ro1 l)i~ 1. The voucher must be typed by the initiating department, giving the complete name and address of the payee, the department name, account number(s), object code(s) and amount(s) to be charged . Payee tax identification is required for reportable payments (see below). 2. Special preparation is required if the payment is reportable to the Internal Revenue Service. a. If the payment represents rents, royalties, prizes or awards, advertising or compensation for services rendered by a nonemployee (including payment for related parts or materials) or reimbursement of undocumented travel expenses of a nonemployee (individual, sole proprietorship or partnership) the payment must be reported to the Internal Revenue Service on IRS Form 1099 MISC. (See the following paragraph for special case of payments for medical services and legal services.) In these instances, the payee's home or personal business address and social security number or federal employer identification number (FEIN) must be shown on the Direct Payment Voucher. b. For a sole proprietor or individual, the name of the individual (owner) and their social security number or federal employer identification number (FEIN) must be given. For reportable payments to partnerships, the FEIN is the appropriate tax identification number. For all payees, the business entity classification must also be clearly stated on the voucher (individual, sole proprietor, partnership or corporation). The University generally does not have to report these payments made to corporations. c. Payment for medical services and legal services must be reported on IRS Form 1099 MISC for all payees including corporations. For these payments, the payee's FEIN must be provided . d. If the payee is a nonprofit organization, none of the above-listed payments must be reported. If the payee is a nonprofit organization, this disclosure must be made on the Direct Payment Voucher. Documentation of this status can be obtained by having the payee complete an IRS Form W-9, Request for Taxpayer Identification Number and Certification to be submitted with the Direct Payment Voucher. An example of this form is provided in exhibit 75-B which may be copied for departmental use. 3. Only one person or company can be paid on a single voucher unless the check is to be made jointly payable. 4. The purpose for payment must be indicated in detail in the body of the voucher and should include dates, where applicable, such as in the case of performers or memberships . 5. All check mailing instructions and wire transfer instructions need to be highlighted in the body of the voucher. For Special Handling of voucher or check, see section VI. 6. Sales tax should not be included in the total payment as the University is sales tax exempt. The exception to this would be when proceeds have been collected from participants or a taxable agency account is being used (non-MSU funds), in which case Sales Tax should be included. 7. Any detail, including invoices or contracts explaining the reason for the payment, should be stapled to the original or white copy. aJ f tfi~~MsO Purcha§fi1g:~aI 2:2arino( Ji~:,~.[~:2!:!§'ri]if conferE:in c~ fee~. the voucher must detail the attendee, date, and location of the conference. Copies of the original conference materials (documenting specific items, such as meals included in the conference fee) must accompany any related travel reimbursement voucher. 9. Material to accompany the check, if any, should be attached to the 2nd or blue copy. 10. The voucher must be signed by an authorized signer for the account(s) being charged . Please sign this voucher using blue ink to help distinguish the original from copies . 11. A Direct Payment Voucher of $25,000 or more must be cosigned by someone administratively higher unless the voucher is signed by a dean or an officer of the University. For personal service payments, see section 76 for further signature authorization requirements . II. MULTIPLE CHECK VOUCHER A. Purpose This voucher facilitates payments of a common nature to more than one payee ( e.g. fee refunds, payments to conference participants, etc.) and eliminates the need to prepare a separate voucher for each payee. (Note: Refunds of $2.00 or less will not be issued.) B. Form Multiple Check Voucher forms (see exhibit 75-C) may be obtained from Stores, stock order #140- 25700. Downloadable forms are available from the Controller's Office web site at h!!R ://ctlr.msu.edu/download. When departments are using downloaded forms, be sure to mark your copies using either a red rubber stamp or red marker with the word "COPY" in the lower right comer of the form. C. Preparation 1. The form must be typed by the initiating department giving the complete name and address of each payee, the department name, account number and object code to be charged. If the payee is on campus, the address must conform to requirements established by the Campus Mail Service. If the payments represent compensation to individuals for services performed as independent contractors, the social security number and home address of each payee must be included on the form in order to comply with IRS regulations. See Sectiop](i for the criteria for independent contractor status. 2. If more than one page is necessary, separate Multiple Check Vouchers must be prepared with the total indicated on each multiple check voucher submitted. 3. Multiple Check Vouchers may only be charged to one account and one object code. 4. Receipts, where applicable (conference receipts, etc.), should be stapled to the top white copy. 5. The Multiple Check Voucher must be signed by an authorized signer. Please sign the voucher using blue ink to help distinguish the original from copies. D. Routing 1. The original ~fe) and the~ below for Contract and Grant accounts). The initiating department should retain a copy ~ files. opy (J1.1i.() should be forwarded to Accounts Payable (see item D.2 ) for their 2. Multiple Check Vouchers with charges to research grant accounts (account numbers in the range 61- 0000 through 61-9999) must be forwarded to the Office of Contract and Grant Administration, 301 Administration Building, for approval. Contract and Grant Administration will forward the voucher to Accounts Payable. 3. After approval, Accounts Payable will forward the voucher to Accounting for payment. 4. Accounting compares the signature on the Multiple Check Voucher to the signature on authorized signature forms . 5. Accounting will assign voucher check numbers and prepare a check for each payee listed. 6. The checks are mailed directly to the payees. 7. The paid voucher is retained in the Accounting Department. ~lS- E. Routing bf J 1. Departments should retain a copy# and forward the othoc~pi@s to Accounts Payable for verification and approval. / h · 7 mi ~ /J *Lt ~~ . ._% ~ ~ @~ L n 2. A Direct Payment Voucher charged to a research grant account (account numbers in the range 61- 0000 through 61-9999) must be forwarded to the Office of Contract and Grant Administration, 301 Administration Building, for approval. Contract and Grant Administration will forward the voucher to Accounts Payable. 3. After audit, Accounts Payable will forward the voucher to Accounting for payment. 4. Accounting compares the signature on the Direct Payment Voucher to the signature on authorized signature forms. 5. Accounting will assign a voucher check number and prepare the check. 6. The check is mailed directly to the payee with th~e copy. 7. The paid voucher is distributed as follows: Original (Wf['.i"te5 - Accounting Departmen kpottiug~ · ~ Copy ~ffiie) - Payee II. MULTIPLE CHECK REIMBURSEMENT Section 75.111.C. (Reimbursement Vouchers) C. Preparation "\. ~ to help distinguish the original from copies. 1. The form must be typed by the initiating department giving the complete name and address of the payee, the department name, account number(s) and object code(s) to be charged . If the payee is on campus, the address must conform to requirements established by the Campus Mail Service. THE PURPOSE OF THE EXPENDITURE MUST BE NOTED ON THE VOUCHER. 2. Several purchases may be listed on one voucher. A Reimbursement Voucher will not be prepared until the total to be reimbursed exceeds $2 .00 . 3. An original paid receipt showing date of purchase and amount of payment should be attached to the original voucher for each purchase. If no receipt is available and the amount is less than $25 .00, the p-urchaser's signature is required in the signature column. If no receipt is available for an expenditure greater than $25.00, a memo explaining the purchase and the reason why a receipt is not available must accompany the voucher. This memo must be signed by the purchaser and approved by the chairperson or director of the department. 4. The voucher requires the signature of the person to be reimbursed and the signature of someone administratively senior to the payee who is also an authorized signer for the account(s) charged. It is generally not appropriate for the payee to also authorize their own reimbursement. However, deans and ·v .. ic. e presidents may auth.·o·· rize their own reimbu. rsement. Please sign the voucher using .blu .. e··· ink . . ... ;5. If it is not possible for the payee to sign the Reimbursement Voucher due to the payee bein~(out of sign the are~ ofptherwise unava!la ~ faxed c.8PY .. 8fJhe f.ylly compl tal claim submitted.on their behalf. '(") to the· original, which will state" ........ subrriittipg tb~ "P:t .:.. S~n f1J§ t~Et l?ay~~<~!2ng with thEtglj~pk or Dit~c::fDeposit ~g!ifl§ation form: IV. TRAVEL VOUCHER (SEE SECTION 70) Travel regulations in general are written in Section 70. These regulations include procedures for use and preparation of Travel Vouchers . V. WEEKLY VOUCHER CHECK SUMMARY Each week the Accounting Department distributes a report yi9 lnfopac that summarizes, by account number, all checks and.direct deposit f~irriburserrients issued for that week. For each ~ lter:isaction, the summary report indicates the payee name, check number or <;lirect dep6sit number, pay date, type of voucher, account number and object code charged and the amount. VI. SPECIAL HANDLING Departments requesting special handling of their voucher checks or.~ir~§t deposlfreimbursements are assessed a processing fee of $10 per voucher and must contact Accounts Payable directly. (Multiple check vouchers are charged $10 for the first check and $2 for each additional check.) Special handling situations subject to the fee include checks requiring expedited handling (e .g. "in-by-ten, out-by-four"), "call when ready" and pick up . MSU Manual of Business Procedures : Volume 1 Revise March 2001 Page? of 9 V. NONRESIDENT ALIEN INDEPENDENT CONTRACTORS A. A nonresident alien IC who is to be paid for services rendered in the United States, must have been issued a visa which permits him/her to receive compensation. (For example, nonresident alien contractors holding a Type B visa may not be paid compensation.) The nonresident alien must provide proof of this work/compensation authorization by a copy of a validated Form 194 which the department must submit with the Direct Payment Voucher. It is also mandatory that the IC provide a U .S. social security number. If a social security number has not yet been assigned, the contractor must have applied for one. Proof of application from the Social Security Administration must be provided with the Direct Payment Voucher. Departments should clear the engagement of nonresident alien IC's with the Office for International Students and Scholars before employing them for a compensated work engagement (353-1720) . B. All payments to alien contractors should be formalized on a PSC. The University is required to collect the information specified on the PSC (visa type/number, country of citizenship and residence, U.S. resident alien/nonresident alien status, U.S. social security number or U.S. employer ID number, nature of services rendered, location where work is performed). The PSC provides a consistent format for collecting this information. L , ·ct 1 ~c· · h subject to federa 1~me tax withholding of 30% Ok..., f country o c1t1zens 1p, · · 11 ~ ~ t {A., 7'- ( V' ~ ·, 0'--r"' h. · ct· -L wi·-/-f...)-._·t;/c-1 .-"'~ ..) . n ess exempte ya current tax treaty wit an m 1v1 ua C U 1 db payments for services rendered by the IC a a be exempt if payments to them are United States. Tax treaty info 353-2011. Lf, / % { ~ , ·u-1._ 1 / ;;._c,o~J . N nresident alien partnerships or corporations may -r ufable to their engaging in a trade or business in the tion can be obtained from the Accounts Payable Department, D. A listing of countries whose citizens may be eligible for limited exemption under tax treaty is provided (see Exhibit 76-E). The actual treaty may not exempt any or all of the payment you may anticipate making to your nonresident alien IC. In order to learn the details of the tax treaty provisions for a particular country, please call Accounts Payable at 353-2011. If the country of residence for your nonresident alien is not listed on Exhibit 76-E, the payment made to the IC will be subject to income tax withholding. E. In order for an individual IC to claim exemption from income tax withholding under a current tax treaty, the contractor must complete IRS Form 8233, Exemption from Withholding on Compensation for Independent Personal Services of a Nonresident Alien Individual (see E0chihit7fi::F). 1. IRS Form 8233 can be obtained from the Accounts Payable Department, 360 Administration Bldg., 353-2011. Departments may also make copies of the sample for their use. 2. The contractor should complete IRS Form 8233 through item 5 and sign where indicated. http://ctlr.msu .edu/mbp/mbp76.htm 11/27 /01 SECTION 76: INDEPENDENT CONTRACTORS I. II. III . DETERMININ G EMPLOYMENT STATUS INDEPENDENT CONTRACTOR STATUS DETERMINATION AND DOCUMENTATION FORM (ICSDD) INDEPENDENT CONTRACTOR PROFESSIONAL PERSONAL SERVICES CONTRACT (PSC) - ............... -·· A. Fo1m · ·-·--·····--······· B. Purpose C. Restrictions D. Preparation, Process ing and Routing ~ ..;I;l.,i;/-: -'Pl"l!iA~Y~M~E-.;Ni.Tai.Po+.R!l'IO...,Ci!t-El--lS.!iiSIN+i!-tG~rtt'l'ffll:l'M'fl'll:l"T"TTTm,nrr-1TT1:~ .J ~ EXHIBITS = ·--·========================== ======== SECTION 76: INDEPENDENT CONTRACTORS I. DETERMINING EMPLOYMENT STATUS Michigan State University must comply with Internal Revenue Service (IRS) regulations in our role as an employer. Failure to do so can result in assessments of taxes, penalties and interest. One University responsibility in this regard is the accurate categorization of workers as either employees or as independent contractors (IC), with the corresponding tax withholding and reporting functions inherent in each category of worker. Categorizing a worker as an IC exposes the University to the greatest amount of risk in this regard, since the IRS assumes that all workers are employees unless it can be documented otherwise. A. Employee 1. Every individual performing services for the University and compensated by the University is presumed to be an employee unless she/he can meet the criteria ofIC status (discussed in item I.B.). Generally, every individual who performs services that are subject to the will and control of the University as to both what must be done and how it must be done, is an employee. It does not matter that the University allows the employee considerable discretion and freedom of action, as long as the University has the legal right to control both the method and the result of the services. 2. University policy requires that the following workers be compensated as employees: a. Anyone teaching a credit or non credit course offered by the University to the public. b. Anyone currently employed by the University who performs additional services outside his/her regular job description (discussed in Section 55 of this manual). c. Anyone currently enrolled as a University student. d. Any Michigan State University graduate employed by the department in which they earned their most recent degree (within three months of completing their degree). 3. The status of any worker not falling into one of the above categories must be evaluated based on the IRS common law rules for distinguishing between employees and IC's. The Independent Contractor Status ' ~ployer ID number. The sole proprietor's individual name must always be provided in addition to a business name. The IRS requires that the University report these payments at the end of each calendar year on Form 1099- MISC. C. Documentation on the Direct Payment Voucher should include a full description and the dates of the services rendered and/or products provided. D. Attachments to the Direct Payment Voucher should include: 1. Invoice requirements a. For contracts less than $600 (with or without a PSC), no invoice is required for payments unless it is charged to a Contract and Grant account (61-0000 through 61-5999). Payments against this range of accounts require an invoice in all instances due to federal regulations. b. For contracts greater than or equal to $600, invoices are required for any partial payments. An invoice will not be required for those contracts where only one payment is issued once the entire contract has been satisfied (rather than a series of payments). c. For any payments charged against Contract and Grant accounts (61-0000 through 61-9999), the supporting invoice must be signed by the contractor. 2. Original receipts and tickets for travel expenses reimbursed. If documented by these original receipts and tickets, any portion of the payment to the IC that is designated as reimbursement for travel expenses is not included in the amount reported to the IRS on Form 1099-MISC. 3. If applicable, the original copy of the PSC, documentation on the bidding and selection process or sole source justification, and the completed ICSDD form must also be attached. E. When partial payments against a contract are being made, a copy of the fully executed PSC must be attached to the Direct Payment Voucher with each payment. The first partial payment against the contract must be accompanied by the original PSC form. Copies of the PSC reflecting all required approvals must accompany subsequent payments. The bottom section on the front side of the contract must be completed indicating the current payment, prior payment(s) and total payments. F. By policy, the University does not differentiate between honoraria and contractual payments of fees charged for services rendered. Therefore, all payments for services rendered are authorized, processed and documented consistently. G. A table is provided (see Exhibit 76-D) which summarizes documentation required for Direct Payment Voucher payments to IC's. ······················ V.NO SIDENT ALIEN INDEPENDENT CONTRACTORS its him/her to re e paid com authorization by copy paid for services rendered in the United States, must have been issued a ve compensation. (For example, nonresident alien contractors holding a Type sation.) The nonresident alien must provide proof of this work/compensation a validated Form I94 which the department must submit with the Direct Payment clatory that the IC provide a U.S. social security number. If a social security number has the contractor must have applied for one. Proof of application from the Social Security ust b rovided with the Direct Payment Voucher. Departments should clear the engagement of ien IC's wit the Office for International Students and Scholars before employing them for a not yet been assig Administratio nonresiden ed work engage nt (353-1720). B. All payments to alien contrac ors should be formalized on a PSC. The University is required to collect the I dformation specified on the PSC (visa type/number, country of citizenship and residence, lien/nonresident alien status, U.S. social security number or U.S. employer ID number ature of services ndered, location where work is performed). The PSC provides a consistent format fi collecting this .S. resident C. Un ess exempted by a current tax treaty with an individual IC's country of c· zenship, payments for services rendere by the IC are subject to federal income tax withholding of 30% and ate income tax withholding of 4.1 % ( e attributable o their engaging in a trade or business in the United States. T from the Ace unts Payable Department, 353-2011. ctive 1/2002). Nonresident alien partnerships or corporations ma be exempt if payments to them are treaty information can be obtained tries whose citizens may be eligible for limited e mption under tax treaty is provided (see ent you may anticipate making to your D. A listing of co Exhibit 76-E). The ctual treaty may not exempt any or all of the pa nonresident alien IC. n order to learn the details of the tax treaty ovisions for a particular country, please call Accounts Payable at 3 -2011. If the country ofresidence for yo r nonresident alien is not listed on ~xhi~j!76- E, the payment made to f e IC will be subject to income tax wi olding. E. In order for an individual contractor must complete IRS orm 8233, Exemption from Personal Services of a Nonresi nt Alien Individual (see xhibit _76-F). e tax withholding under a current tax treaty, the ithholding on Compensation for Independent 1. IRS Form 8233 can be obt ·ned from the Ace · nts Payable Department, 360 Administration Bldg., 353- 2011. Departments may also m e copies of th sample for their use. 2. The contractor should complete 3. Generally, payees holding a Type exemption must also complete a suppo i g statement to satisfy IRS requirements. The completed statement should be stapled to the comp ted IRS Form 8233. The statement required will vary by country. Please call Accounts Payable at 353-2 1 obtain guidance. (stu ent) or Type J (researcher/scholar) visa who are applying for 4. The contractor's U.S. social secur· y numb must be provided. If a U.S. SSN has not been assigned, the contractor must have applied for a ocial secu y number. Proof of application from the Social Security Administration must be attached IRS Form 8 5. IRS Form 8233 must accom any the Direct Pa documentation and be forwar ed to the Accounts P able Department, 360 Administration Building. ent Voucher and the PSC, and other required 6. The Accounts Payable D partment will review and nalize IRS Form 8233 and mail it to the IRS. 7. The exemption from 1thholding must be approved b the IRS before payment is made. It takes approximately 15 days or the IRS to respond to a reques to exempt payment from withholding. 8. If the payee choos s not to avail him/herself of available x treaty benefits, a statement documenting this and signed by t e payee must be included with the Direc Payment Voucher (or on the face of it). F. Foreign fiduciaries, artnerships or corporations engaged in a trad or business in the United States may claim exemption from wit Effectively Connect With the Conduct of a Trade or Business in the exemption does no apply to compensation for personal services perfo lding by completing IRS Form 4224, Exemptio From Withholding of Tax on Income ited States (see Exhibit 76-G). This • . ed by an individual. 4224 can be obtained from the Accounts Payable Dep ment, 360 Administration Building, . Departments may also make copies of the sample for their use. Form 4224 must be completed in duplicate by the contractor and should accompany the Direct ayment Voucher, the PSC, and other required documentation and be forwarded D artment, 360 Administration. 3. The ontractor's U.S. tax identification number (TIN) must be pr assigned, application om the Internal Revenue Service must be atta ed to IRS Form 4224. e contractor must have applied for an employer ide · 1cation number (EIN). Proof of G. If the payment is the Direct Payment Vo her. ermined to be exempt from withh mg, a check will be issued for the gross amount of H. If the payment is determi d not to be ex the Direct Payment Voucher a er deduct· g taxes. Departmental accounts will be charged for the federal and state income tax withheld using Jou al Voucher entry prepared by Accounts Payable. pt from withholding, a check will be issued for the net amount of I. IRS Form 1042S, Foreign E son US. Source Income Subject to Withholding, is issued annually to each nomesident alien IC, whe Payroll Department n Questions about F 'ndividual has taxes withheld. Form 1042S, which is issued by the , reports all payments made during the previous calendar year. 1042S should be ad ressed to the Payroll Department, 355-5010. r or not th ter than March yr.' EXHIBITS ". Exhibit 76-A. Independent Contractor (IC) Status - Determination and Documentation (ICSDD) Procedure Form Exhibit 76-B. Independent Contractor (IC) Status - Determination and Documentation (ICSDD) Guidelines For Completion ofICSDD Form Exhibit 76-C. Independent Contractor (IC) - Professional Personal Services Contract (PSC) Exhibit 76-D. Direct Payment Voucher Documentation Required For Payments To Independent Contractors --- - -- . ~ ~ _:;I" ~;.wi.bil~.L:.~~esttleitt-"t~~mdCP"C~temrt,ITTitm:mr~- IRS Form 8233 - Exemption From Withholding On Garupeusatio:n For Independent Personal Services of a Nomesident Alien Individual Exlli~it 7a C. Nomesidettt Alien tm:lependent Contractor - IRS Form 4224 - Exemption From Withholding Of Ta* OH lfleorae Bffeeti ..-ely Connected With The Conduct Of A Trade Or Business In The United States Exhibit 76-D Direct Payment Voucher Documentation Required for Payments To Independent Contractors Direct Payfent Voucher effecting · payment ai~t ICSDD One contract for < $600 total Optional Optional Optional (I) One contract for< $600, but multiple, separate contracts '.'.'.. $600 in total Required Optional Optional (I) Any contract~ $600 Required Required Required (2) ,spedald contrac,t Any contract including reimbursement for travel expenses Any contract for any amount with nonresident alien (including honoraria) See Above See Above See Above Required for non-taxable reporting of travel expense reimbursements See Above Required (3) See Above Documentation on the Direct Payment Voucher should include a full description and the dates of the services rendered and/ or products provided. (1) (2) (3) For Federal Contract and Grant accounts (61-0000 through 61-5999) an invoice is required in all cases. An invoice is optional for all other accounts. Under certain circumstances, an invoice will not be required to accompany the voucher to issue payment. Payments qualifying for this treatment would be: a. Any payment of less than $600 (except for Contract and Grant accounts in the range 61-0000 through 61- 5999). b. Those payments effecting settlement for satisfactory completion of a contract where only one payment is issued once the-entire contract has been satisfied (rather than a series of partial payments). All payments to alien contractors should be formalized on a PSC. The University is required to collect the information specified on the PSC (visa type/number, country of citizenship and residence, U.S. resident alien/nonresident alien status, nature of services rendered, location where work is performed). The PSC provides a consistent format for collecting this information. See Manual of Business Procedures Section 77 for additional details. MBP Section 76 D. Preparation, Processing and Routing 1. The contract must be typed by the initiating department. 2. Only one person or company can be paid on a single contract. 3. All applicable sections of the contract must be completed. 4. The contract must be routed in the following order for acceptance and signature to: ( a. The independent contractor. (When the PSC executed between the department and the contractor will be faxed between the parties to obtain signatures, the contractor must sign, date and return both the front and back sides of the form to acknowledge agreement with the contract terms.) b. An authorized signer on the account being charged . c. The dean or vice president (or designee within the dean/vice president office) for contracts between $5,000 and $10,000 (services). d. Contract and Grant Administration, if charging accounts 61-0000 through 61-9999. e. The Purchasing Department for contracts (services) greater than $10 ,000 or in any instances when the PSC form is not used or its contractual terms are modified by the department. Documentation of the reasonableness of the cost of the service obtained and the selection process used to choose the IC must be submitted along with the PSC. REVISED SECTION!!! / /s ]opies oiompleted contract form with all required signatures are distributed as follows: L/ a. One(co of the signed contract is given to the contractor. f the signed contract remains in the originating department. ntracts that document contractor status as woman or minority owned (51 % b. One opy c. For a ownership) a copy must be sent to the Purchasing Department. If the contract is greater than $10,000, Purchasing will make the required copy when the contract is submitted for approval. For those contracts less than or equal to $10,000 the department should send Purchasing a separate copy of the signed contract. d. At the completion of the services, the original signed contract, along with a Direct Payment Voucher and the appropriate documentation, should be sent to Accounts Payable, 360 Administration Bldg., for payment. (See IV.E. below for documenting partial payments.) MICHIGAN STATE U N VERS ITY PROFESSIONAL PERSONAL SERVICES CONTRACT WITH INDEPENDENT CONTRACTOR (This Contract form should be completed before work commences) Michigan State University treforred to in the Contract as University) enter, into a binding agreement with: Contractor: Address (home address, if individual): Phone No.: City: U.S. Citizen: Yes O No O and Residence: - - - - - - - - - - - - - - - - . .. Resident alien'! , , , , , - - - - - - - - - - - Incorporated: Yes O No O If Yes, Profit O Nonprofit O . TfNo, pick type of business ISQl~.P!:QPJiiforihfo ...... " .... J and give name of Partner or Sole Proprietor, if dillcrent from Contractor above: - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - U.S. Social Security Number or U.S. Federal Employer Identification Number: Subject to backup withholding: Yes C) No Q lfNo, Country of Citizenship: If No, are you a non-resident alien? Visa Type ... .. Zip Code: State: REPORTING PURPOSES ONLY (COPY TO PURCHASING) 5 I% Ownerships: Woman Owned() Minority Owned: African Amer. 0 Hispanic Amer. Q Native Amer.Q Asian-Pacific Amer.Q Asian-Indian Amer.Q NATURE OF SERVCCES TO BE RENDERED: PERFORMED AT (LOCATCON): PERFORMANCE SCHEDULE: Starting date: Ending date: Total hours: COMPENSATION INFORMATION: Account(s) to be charged.,_: _ ___ ___ ___ ________________ Payment tem1s . .,_: _ ____ _ _________ _ Rate of Pay: (indicate hourly, daily, total project. e t c . ) " ' - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Services shall not exceed: "'$ ___ _____ ___________ Expenses shall not exceed: $ - - - - - - - - - - - - - - - - - Nature of Expenses: DEPARTME1''TAL C01''TACT PERSON: The Contractor should communicate with the following departmental representative regarding this contract: Name: Address: The Department's responsibility for supporting the performance of services is limited to the following: Phone No.: CONDITIONS AND ROUTING PROCEDURE: 1. CNDEPENDENT C01'TRACTOR. The Contractor will act as an independent contractor under this Contract, and neither the Contractor nor any employee or agent of the Contractor is an employee of the University due to this Contract. The Contractor will provide the services and achieve the results specified by the University free from the direction or control of the University as to means and methods of performance. 2. NONRESIDENT ALIEN. Tfthe Contractor is a nonresident alien performing services in the United States or it's ten-itories, the Contractor agrees that proof of visa status (194 Fonn) documenting authorization to receive payment for work perfmmed along with a U .S social security number will be provided to the University prior to payment by the University. 3. ACCESS TO RECORDS. The Contractor shall maintain reasonable records, including evidence that the services actually were performed and the identity of all individuals paid for such services, and ~all allow access to those records by the University. any sponsor, the State of Michigan, or the Comptroller General of the United States or their authorized representatives. 4. OWNERSHIP OF WORK PRODUCTS . Any discovery, patent, copyright, invention, work papers, software, soJlwarc applications, written materials, publications, data, information, by-product or end-product arising as a direct result of the performance of this Contract shall be the sole property of the University. The University hereby grants to Contractor a non-exclusive royalty-free right and license to use for the. Contractor 's internal non-commercial research and development activities all unpublished data, know-how, materials and unpatented inventions or discoveries arising from this contract, reserving a right to the University to use such subject matter for any non-commercial uses .. (Continued on next page ... ) Complete this section when processing payments for partial performance of services Personal Services .................... ..... ...... .......................................... $ ____ _ Ex penses ... ............ .............. ......... ... ..... .... .. ....... ........ ... ....... ... .... .. .. ____ _ Total .... ............. ..... ............ .. .......... ...... .. ....................................... $ __ ~0~.0~0 This is a Renewal Yes O No 0 000 Current Payment (A) Prior Payment(s) B Total Payments (A+ B) $ 0.00 0.00 $ __ __...o .... o ... o MSU is an Aflirmative Actiou!Equal Oppo1tunity Institution Pagel 5. TERMINATION. Either the University or the Contractor may terminate its obligations under this Contract by giving the other party prior written notice of such tem1ination, specifying the intended date of termination; provided, however, that upon request from the University, the Contractor shall continue perfonnance until the University can find a replacement contractor or for an additional thi1ty (30) days after the specified termination date, whichever is the shorter time period. Upon termination, an equitable settlement shall be made for ac tual costs incurred by the Contractor up to the date of termination. 6. UNIVERSITY EMPLOYEES. The Contractor will not hire any employee of the University to perform any services covered by this agreement without prior written approval from the Office of the Provost for academic employees or from the Assistant Vice President for Human Resources for non academic employees 7. CONFIDENT AL INFORMATION. The Contractor shall not publish or otherwise disclose, except to the University and except matters of public record, any information or data obtained in the course ofpetformance of th is Contract from private individuals, organizations, or public agencies, in a publication by which the information or data furnished by any particular person or establishment can be identified, except ,vith the written consent of such person or establishment. 8. ACKNOWLEDGMENT OF SPONSORSHIP. The Contractor agrees that in any publication acknowledgment shall be made of sponsorship by the University and/or other sponsor by use of the following statement: "This work was perfo1med under the sponsorship of THE BOARD OF TRUSTEES OF MICHIGAN ST ATE UNIVERSITY and (insert any other sponsor). This work does not necessarily represent the views of the University or the sponsoring agency." Tfthe publication is copyrighted, the statement, "Reproduction oftJ1is mticle, with the customary credit to the source, is permitted." Shall be added. V/ith the exception of acknowledging sponsorship of research, the name of the University may not be used in publication~. news relea,,es, advertising, speeches, technical papers, photographs, and other releases of information regarding this Contract or data developed under this Contract without written approval of the University. 9. CONFLICT OF INTEREST. The Contractor affirms that to the best ofhisiher knowledge there exists no actual or potential conflict between Contractor's family, business, or financial interests and his/her services under this Contract, and in the event of change in either his/her private interests or services under this Contract, he/she will infonn the University regarding possible conflict of interest which may arise as a result of such change. l 0. TOT AL AGREEMENT. This Contract contains the entire ai,,,reement bet.ween the parties superseding any prior or concurrent agreements as to the services being provided, and no oral or written terms or conditions which are not contained in this Contract shall be binding. This Contract may not be changed except by mutual agreement of the parties reduced to writing and signed. 11. ASSIGNMENT/TRANSFER/SUBCONTRACTING. The Contractor shall not assign, transfer, subcontract, or otherwise give to or impose on any other party any obligation or right of the Contractor under this Contract, without the prior written consent of the University. 12. INDEMNIFICATION. The Contractor shall indemnify, defend and hold the University harmless from any charge. fine , penalty, or judgment arising out ot: or in any way re~ulting from, the Contractor's performance under this Contract, and should tbe University be required to make payments or incur costs of defense (including reasonable attomey foes) for any such reason, the Contractor shall ftilly reimburse the University. The obligations of the Contractor under this paragraph 12 shall survive any tcm1ination of this Contract or completion of the Contractor's perfonnance. under th.is Contract. CONTRACTOR ACCEPTANCE: I agree to the terms above and on the first page of this Contract. The amount of the charges for services under this Contract docs not exceed my normal and customary rate. I certify that the Social Security Number or Federal Employer Identification Number on the first page of this Contract is correct and l am not subject to backup withholding unless otherwise noted. I am not a current University employee 01· enrolled as an MSU student. Signature: Date: MICBIGAN STATE L'NIVERSITY ACCEPTANCE: The service to be provided is necessary, the cost for the service is reasonable, and the service cannot now be provided by current University employees. The department has retained documentation of the reasonableness of the cost and the selection process employed to secure the most qualified contractor available for contracts of$10,000 or less. Docmnentation of same is attached for all contracts for amounts greater than $ 10,000. Signature: Signature: Signature: Signature: Authorized signer for account to he charged (also responsible for attaching docW11ent.ation of bidding. procedures followed or sole source ju~tification). Date: Dean or Vice Prt,sident or designate Contract and Grant approval, if charging accounL~ 61-0000 to 61-9999 . Date: Date: Date: Purchasing Department for contracts greater than Sl0,000. (See section 76 of the Manual of Business Procedures for guidance). Procedure for routing of Contract The Contract form should be completed before work commences. l. Originating department for Contractor's signature and authorized signer for Copy Distribution: account to be charged. · 2. Appropriate Dean or Vice President, ifrequired. 3. Contract and Grant Administration, if charging accow1ts 61-0000 to 61-9999. Purchasing Department. ifrequired (see section 76 of'the University's Manual 4. of Business Procedures for guidance). 5. Originating department, maintain until completion ofsc.rviccs. 6. At completion ofservicc.s (or for each partial payment), originating department acknowledges perfonnance, forwards original contract with the Direct Payment Voucher (for partial payments send original contract with the first payment and copies thereafter), original travel receipts, Contractor's signed invoice and other docw11entation, to Accounts Payable in the Controller's Office for payment. Oiginal to Accounts Payable Copy to Originating Department Copy to Contractor Copy to Purchasing if < or"' $10,000 & Woman/minority-owned contractor. Please refer to Section 76 of the Manual of Business Procedures for specific procedures on determining employee versus independent contractor status and processing of payments. Contact the Accounts Payable Department (5-0331) to determine proper payment procedure of nonresident alien Contractors and available tax treaty provisions. Page 2 MICHIGAN STATE U N YERS ITY PROFESSIONAL PERSONAL SERVICES CONTRACT WITH INDEPENDENT CONTRACTOR (This Contract form should be completed before work commences) Michigan State University (referred to in the Contract as University) enters into a binding agreement with : Contractor: Address (home address, if individual): Phone No.: City: U.S. Citizen: Yes No IfNo, Country of Citizenship: IfNo, are you a non-resident alien? Visa Type and Residence: - - - - - - - - - - - - - - - Resident alien? - - - - - - - - - - - - State: Zip Code: No Incorporated: Yes Sole Proprietor, if different from Contractor above: - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - U.S. Social Security Number or U.S. Federal Employer Identification Number: - - - - - - - - - - - - - - - - - - - - - - - - - - - - Subject to backup withholding: Yes If Yes, Profit Nonprofit __ If No, circle type of business (Partnership/Sole Proprietorship) and give name of Partner or No REPORTING PURPOSES ONLY (COPY TO PURCHASING) 51% Ownerships: Woman Owned D Minority Owned: African Amer. D Hispanic Amer. D Native Amer. D Asian-Pacific Amer. D Asian-Indian Amer. D NATURE OF SERVICES TO BE RENDERED: PERFORMED AT (LOCATION): PERFORMANCE SCHEDULE: Starting date: COMPENSATION INFORMATION: Ending date: Total hours: Account(s) to be charged.:..: - - - - - - - - - - - - - - - - - - - - - - - -~P a ym e n t terms . .:..: ______________ _ Rate of Pay: (indicate hourly, daily, total project, etc.)!£$ ___ _____ _______ _ ____ _ ___ __ __ _____ _ Services shall not exceed: ~$ _______ _____ ___ _ _ _ _ Expenses shall not exceed: $ - - - - - - - - - - - - - - - - Nature of Expenses: - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - DEPARTMENTAL CONTACT PERSON: The Contractor should communicate with the following departmental representative regarding this contract: Name: Address: The Department's responsibility for supporting the performance of services is limited to the following : Phone No. : CONDITIONS AND ROUTING PROCEDURE: I. INDEPENDENT CONTRACTOR. The Contractor will act as an independent contractor under this Contract, and neither the Contractor nor any employee or agent of the Contractor is an employee of the University due to this Contract. The Contractor will provide the services and achieve the results specified by the University free from the direction or control of the University as to means and methods of performance. 2. NONRESIDENT ALIEN. If the Contractor is a nonresident alien performing services in the United States or it's territories, the Contractor agrees that proof of visa status (194 Form) documenting authorization to receive payment for work performed along with a U.S social security number will be provided to the University prior to payment by the University. 3. ACCESS TO RECORDS. The Contractor shall maintain reasonable records, including evidence that the services actually were performed and the identity of all individuals paid for such services, and shall allow access to those records by the University, any sponsor, the State of Michigan, or the Comptroller General of the United States or their authorized representatives. 4. OWNERSHIP OF WORK PRODUCTS. Any discovery, patent, copyright, invention, work papers, software, software applications, written materials, publications, data, information, by-product or end-product arising as a direct result of the performance of this Contract shall be the sole property of the University. The University hereby grants to Contractor a non-exclusive royalty-free right and license to use for the Contractor's internal non-commercial research and development activities all unpublished data, know-how, materials and unpatented inventions or discoveries arising from this contract, reserving a right to the University to use such subject matter for any non-commercial uses .. (Continued on next page ... ) Complete this section when processing payments for partial performance of services Personal Services ............. ... ... .. .............. .... ..... ........... .. .. .... ...... .. ... $ ____ _ Expenses ..... .. .......... ..... ..... ........... ... ......... .... .... .. .............. .. ...... ....... ____ _ Total ... ... .. ....... .... .... .. ..... ... .. .......... .. ..................... ........ .. .. ............ . $ _ __ _ _ This is a Renewal Yes D No D Current Payment (A) Prior Payment(s) B Total Payments (A + B) $. ___ _ $. ___ _ MSU is an Affirmative Action/Equal Opportunity Institution Page I 5. TERMINATION. Either the University or the Contractor may terminate its obligations und er this Contract by giving the other party p~ior written notice of such termination, specifying the intended date of termin ation; provided, however, that upon request from the University, the Contractor shall continue performance until the University can find a replacement contractor or for an additional thirty (30) days after the specified term ination date, whichever is the shorter time period. Upon termination, an equitable settlement shall be made for actual costs incurred by the Contractor up to the date of termination. 6. UNIVERSITY EMPLOYEES. The Contractor will not hire any employee of the University to perform any services covered by this agreement without prior written approval from the Office of the Provost for academic employees or from the Assistant Vice President for Human Resources for non academic employees 7. CONFIDENT AL INFORMATION. The Contractor shall not publish or otherwise disclose, except to the University and except matters of public record, any information or data obtained in the course of performance of this Contract from private individuals, organizations, or public agencies, in a publication by which the information or data furnished by any particular person or establishment can be identified, except with the written consent of such person or establishment. 8. ACKNOWLEDGMENT OF SPONSORSHIP. The Contractor agrees that in any publication acknowledgment shall be made of sponsorship by the University and/or other sponsor by use of the following statement: "This work was performed under the sponsorship of THE BOARD OF TRUSTEES OF MICHIGAN ST ATE UNIVERSITY and (insert any other sponsor). This work does not necessarily represent the views of the University or the sponsoring agency." If the publication is copyrighted, the statement, "Reproduction of this article, with the customary credit to the source, is permitted." Shall be added. With the exception of acknowledging sponsorship of research, the name of the University may not be used in publications, news releases, advertising, speeches, technical papers, photographs, and other releases of information regarding this Contract or data developed under this Contract without written approval of the University. 9. CONFLICT OF INTEREST. The Contractor affirms that to the best of his/her knowledge there exists no actual or potential conflict between Contractor's family, business, or financial interests and his/her services under this Contract, and in the event of change in either his/her private interests or services under this Contract, he/she will inform the University regarding possible conflict of interest which may arise as a result of such change. 10. TOTAL AGREEMENT. This Contract contains the entire agreement between the parties superseding any prior or concurrent agreements as to the services being provided, and no oral or written terms or conditions which are not contained in this Contract shall be binding. This Contract may not be changed except by mutual agreement of the parties reduced to writing and signed. 11. ASSIGNMENT/TRANSFER/SUBCONTRACTING. The Contractor shall not assign, transfer, subcontract, or otherwise give to or impose on any other party any obligation or right of the Contractor under this Contract, without the prior written consent of the University. 12. INDEMNIFICATION. The Contractor shall indemnify, defend and hold the University harmless from any charge, fine, penalty, or judgment arising out of, or in any way resulting from, the Contractor' s performance under this Contract, and should the University be required to make payments or incur costs of defense (including reasonable attorney fees) for any such reason, the Contractor shall fully reimburse the University. The obligations of the Contractor under this paragraph 12 shall survive any termination of this Contract or completion of the Contractor's performance under this Contract. CONTRACTOR ACCEPTANCE: I agree to the terms above and on the first page of this Contract. The amount of the charges for services under this Contract does not exceed my normal and customary rate. I certify that the Social Security Number or Federal Employer Identification Number on the first page of this Contract is correct and I am not subject to backup withholding unless otherwise noted. I am not a current University employee or enrolled as an MSU student. Signature: Date: MICHIGAN STATE UNIVERSITY ACCEPTANCE: The service to be provided is necessary, the cost for the service is reasonable, and the service cannot now be provided by current University employees. The department has retained documentation of the reasonableness of the cost and the selection process employed to secure the most qualified contractor available for contracts of $10,000 or less. Documentation of same is attached for all contracts for amounts greater than $10,000. Signature: Signature: Signature: Signature: Authorized signer for account to be charged (also responsible for attaching documentation of bidding procedures followed or sole source justification). Date: Dean or Vice President or designate Contract and Grant approval , if charging accounts 61-0000 to 61-9999. Date : Date: Date: Purchasing Department for contracts greater than $10,000. (See section 76 of the Manual of Business Procedures for guidance). Procedure for routing of Contract The Contract form should be completed before work commences. I. Originating department for Contractor's signature and authorized signer for Copy Distribution : account to be charged. 2. Appropriate Dean or Vice President, if required. 3. Contract and Grant Administration, if charging accounts 61-0000 to 61-9999. Purchasing Department, if required (see section 76 of the University's Manual 4. of Business Procedures for guidance). 5. Originating department, maintain until completion of services. 6. At completion of services ( or for each partial payment), originating department acknowledges performance, forwards original contract with the Direct Payment Voucher (for partial payments send original contract with the first payment and copies thereafter), original travel receipts, Contractor's signed invoice and other documentation, to Accounts Payable in the Controller' s Office for payment. White to Accounts Payable Copy to Originating Department Copy to Contractor Copy to Purchasing if < or= $10,000 & Woman/minority-owned contractor. Please refer to Section 76 of the Manual of Business Procedures for specific procedures on determining employee versus independent contractor status and processing of payments. Contact the Accounts Payable Department (5-0331) to determine proper payment procedure of nonresident alien Contractors and available tax treaty provisions. Page 2 MICHIGAN STATE T y U N V E R S PROFESSIONAL PERSONAL SERVICES CONTRACT WITH INDEPENDENT CONTRACTOR (This Contract form should be completed before work commences) Michigan State University (referred to in the Contract as University) enters into a binding agreement with: Contractor: Address: -------------------------------- Phone No.: City: State: Zip Code: -\:: :J....C..tL \ ---------- U.S. Citizen: Yes No ___ If No, Country of Citizenship: if No, are you a non-resident alien? -------------- Vis a Type and Residence: Resident alien? Incorporated: Yes If Yes, Profit Nonprofit If No, circle type of business (Partnership/Sole Proprietorship) and give name of Partner or Sole Proprietor, if different from Contractor above: No ---- U.S. Social Security Number or U.S. Federal Employer Identification Number: Subject to backup withholding: Yes No __ __ _ REPORTING PURPOSES ONLY (COPY TO PURCHASING) 51% Ownership: Woman Owned Minority Owned: African Amer. Hispanic Amer. Native Amer. Asian-Indian American Asian-Pacific Amer. NATURE OF SERVICES TO BE RENDERED: PERFORMED AT (LOCATION): PERFORMANCE SCHEDULE: Starting date: - - - - - - - - - - - - - COMPENSATION INFORMATION: Ending date: ---------- Total hours: --------------- Account(s) to be ch a r g ed : - - - - - - - - - - - - - - - - - - - - - - Payment terms: Rate of Pay: $ - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - . , . . - - - - - ( i nd i c a t e hourly, daily, total project, etc.) Services shall not exceed:_$ ______________ _ _ Expenses shall not exceed: $ Nature of Expenses: DEPARTMENTAL CONTACT PERSON: The Contractor should communicate with the following departmental representative regarding this contract: Name: Phone No.: Address: ----------------------------------------------------- The Department's responsibility for supporting the performance of services is limited to the following: CONDITIONS AND ROUTING PROCEDURE: 1. INDEPENDENT CONTRACTOR. The Contractor will act as an independent contractor under this Contract, and neither the Contractor nor any employee or agent of the Contractor is an employee of the University due to this Contract. The Contractor will provide the services and achieve the results specified by the University free from the direction or control of the University as to means and methods of performance. 2 . NONRESIDENT ALIEN. If the Contractor is a nonresident alien performing services in the United States or it's territories, the Contractor agrees that proof of visa status (194 Form) documenting authorization to receive payment for work performed along with a U.S . social security number will be provided to the University prior to payment by the University. 3. ACCESS TO RECORDS. The Contractor shall maintain reasonable records, including evidence that the services actually were performed and the identity of all individuals paid for such services, and shall allow access to those records by the University, any sponsor, the State of Michigan, or the Comptroller General of the United States or their authorized representatives. 4. OWNERSHIP OF WORK PRODUCTS. Any discovery, patent, copyright, invention, work papers, software, software applications, written materials, publications, data, information, by-product or end-product arising as a direct result of the performance of this Contract shall be the sole property of the University. The University hereby grants to Contractor a non-exclusive royalty-free right and license to use for the Contractor's internal non-commercial research and development activities all unpublished data, know-how, materials and unpatented inventions or discoveries arising from this contract, reserving a right to the University to use such subject matter for any non-commercial uses. (Continued on next page . . . ) Complete this section when processing payments for partial performance of services Personal Services .. .. . .. ........ . . ... . .. . . . Expenses . . .... . . .. . . . . .. . . . .... . . ... . .... . . Total .. . . .... . . ... . . ....... . . ... .. ... .. . .. . This is a Renewal Yes D No D Current Payment (A) $ Prior Payment(s) (B) $ $ $ Total Payments (A+ 8) $ $ MSU is an Affirmative Action/Equal Opportunity Institution 5. TERMINATION. Either the University or the Contractor may terminate its obligations under this Contract by giving the other party prior written notice of such termination, specifying the intended date of termination; provided, however, that upon request from the University, the Contractor shall continue performance until the University can find a replacement contractor or for an additional thirty (30) days after the specified termination date, whichever is the shorter time period. Upon termination, an equitable settlement shall be made for actual costs incurred by the Contractor up to the date ofterminatjon. 6. UNIVERSITY EMPLOYEES. The Contractor will not hire any employee of the University to perform any services covered by this agreement without prior written approval from the Office of the Provost for academic employees or from the Assistant Vice President for Human Resources for non-academic Employees. 7. CONFIDENTIAL INFORMATION. The Contractor shall not publish or otherwise disclose, except to the University and except matters of public record, information or data obtained in the course of performance of this Contract from private individuals, organizations, or public agencies, in a publication by which the information or data furnished by any particular person or establishment can be identified, except with the written consent of such person or establishment. 8. ACKNOWLEDGMENT OF SPONSORSHIP. The Contractor agrees that in any publication acknowledgment shall be made of sponsorship by the University and/or other sponsor by use of the following statement: "This work was performed under the sponsorship of THE BOARD OF TRUSTEES OF MICHJGAN ST ATE UNIVERSITY and (insert any other sponsor). This work does not necessarily represent the views of the University or the sponsoring agency." If the publication is copyrighted, the statement, "Reproduction of this article, with the customary credit to the source, is permitted." shall be added. With the exception of acknowledging sponsorship of research, the name of the University may not be used in publications, news releases, advertising, speeches, technical papers, photographs, and other releases of information regarding this Contract or data developed under this Contract without written approval of the University. 9. CONFLICT OF INTEREST. The Contractor affirms that to the best of his/her knowledge there exists no actual or potential conflict between Contractor's family , business, or financial interests and his/her services under this Contract, and in the event of change in either his/her private interest or service under this Contract, he/she ·will inform the University regarding possible conflict of interest which may arise as a result of such change. 1 O. TOTAL AGREEMENT. This Contract contains the entire agreement between the parties superseding any prior or concurrent agreements as to the services being provided, and no oral or written terms or conditions which are not contained in this Contract shall be binding. The Contract may not be changed except by mutual agreement of the parties reduced to writing and signed. 11. ASSIGNMENT/TRANSFER/SUBCONTRACTING. The Contractor shall not assign, transfer, subcontract, or otherwise give to or impose on any other party any obligation or right of the Contractor under this Contract, without the prior written consent of the University. 12. INDEMNIFICATION. The Contractor shall indemnify, defend and hold the University harmless from any charge, fine, penalty, or judgment arising out of, or in any way resulting from, the Contractor's performance under this Contract, and should the University be required to make payments or incur costs of defense (including reasonable attorney fees) for any such reason, the Contractor shall fully reimburse the University. The obligations of the Contractor under this paragraph 12 shall survive any termination of this Contract or completion of the Contractor's performance under this Contract. CONTRACTOR ACCEPTANCE: I agree to the terms above and on the first page of this Contract. The amount of the charges for services under this Contract does not exceed my normal and customary rate . I certify that the Social Security Number or Federal Employer Identification Number on the first page of this Contract is correct and I am not subject to backup withholding unless otherwise noted. I am not a current University employee or enrolled as an MSU student. Signature: __ __ ___ ________________ _ ___ _ __ _ __ Date: MICHIGAN STATE UNIVERSITY ACCEPTANCE: The service to be provided is necessary, the cost for the service is reasonable, and the service cannot now be provided by current University employees. The department has retained documentation of the reasonableness of the cost and the selection process employed to secure the most qua! ified contractor available for contracts of I 0,000 or less. Documentation of same is attached for all contracts for amounts greater than $10,000. Signature: _____________ __ __ _ _ _ _ _ ___________ Date: Authorized signer for account to be charged (also responsible for attaching documentation of bidding procedures followed or sole source justification). Signature: _____________ __ __ _ _ _ _ _ ___________ Date: Dean or Vice President or designate. Signature: Date: --,.C-on-t-ra-ct-a-n""d""'G,-ra-n-t-ap-p-r-ov-a"'""i,"'"if""c"'"h-ar-g"'""in-g,-·a-cc-o-u-nt-s""'6"'""1-""'"0""oo'"'o,-t-o""'6"'""1-""'"9""99'"'9,-.---------- Signature: _____________ __ __ _ _ _ _ _ ___________ Date: Purchasing Department for contracts greater than $10,000. (See section 76 of the Manual of Business Procedures for guidance). Procedure for routing of Contract: The Contract form should be completed before work commences. 1. Originating department for Contractor's signature and authorized signer for account to be charged. 2. Appropriate Dean or Vice President, if required. 3. Contract and Grant Administration, if charging accounts 61-0000 to 61-9999. 4. Purchasing Department, if required (see section 76 of the University's Manual of Business Procedures for guidance). 5. Originating department, maintain until completion of services. 6. At completion of services ( or for each partial payment), originating department acknowledges performance, forwards original Contract with the Direct Payment Voucher (for partial payments send original Contract with the first payment and copies thereafter), original travel receipts, Contractor's signed invoice and other documentation, to Accounts Payable in the Controller's Office for payment. Copy Distribution: Original to Accounts Payable Copy to Originating Department Copy to Contractor Copy to Purchasing if < or= $10,000 & Woman/minority-owned contractor. Please refer to Section 76 of the Manual of Business Procedures for specific procedures on determining employee versus independent contractor status and processing of payments. Contact the Accounts Payable Department (5-0331) to determine proper payment procedure of nonresident alien Contractors and available tax treaty provisions. Excel Version Revised 03/01 MICHIGAN STATE U N VERS ITY PROFESSIONAL PERSONAL SERVICES CONTRACT WITH INDEPENDENT CONTRACTOR (This Contract form should be completed before work commences) Michigan State University (referred to in the Contract as University) enters into a binding agreement with: Contractor: Address (home address, if individual): City: U.S. Citizen: Yes Q No Q Phone No.: State: Zip Code: and Residence: IfNo, Country of Citizenship: IfNo, are you a non-resident alien? Visa Type ====R:::e:::s::id=e::n:;.:t;::a:::li~en::?;,..· ~ =;----------- Incorporated: Yes O No Q If Yes, Profit Q Nonprofit Q. If No, pick type of business l$.ole Proprietorship I and give name of Partner or Sole Proprietor, if different from Contractor above: - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - U.S. Social Security Number or U.S. Federal Employer Identification Number: Subject to backup withholding: Yes Q No Q y REPORTING PURPOSES ONLY {~.GI-I-A.SING' 51 % Ownerships: ; · ( e-fO I ~ t.V (COPY TO PURCHASING IF ~ $10,000) lUC,V\,~ 0 Q MinorityOwned ~ fricanAmer. Q HispanicAmer.Q NativeAmer.Q Asian-PacificAmer.Q Asian-IndianAmer.Q NATURE OF SERVICES TO BE RENDERED: PERFORMED AT (LOCATION): PERFORMANCE SCHEDULE : Starting date: COMPENSATION INFORMATION: Ending date: Total hours: Account(s) to be charged.:..: _______________ __ __ __ __ __ Payment terms.:..: - - - - - - - - - - - - - - - Rate of Pay: (indicate hourly, daily, total project, etc.) " ' - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Services shall not exceed: ~ - - - - - - - - - - - - - - - - - -Exp e n s e s shall not exceed: $ - - - - - - - - - - - - - - - - Nature of Expenses: - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - DEPARTMENTAL CONTACT PERSON: The Contractor should communicate with the following departmental representative regarding this contract: Name: Address: The Department's responsibility for supporting the performance of services is limited to the following: Phone No.: CONDITIONS AND ROUTING PROCEDURE: 1. INDEPENDENT CONTRACTOR. The Contractor will act as an independent contractor under this Contract, and neither the Contractor nor any employee or agent of the Contractor is an employee of the University due to this Contract. The Contractor will provide the services and achieve the results specified by the University free from the direction or control of the University as to means and methods of performance. 2. NONRESIDENT ALIEN. If the Contractor is a nonresident alien performing services in the United States or it's territories, the Contractor agrees that proof of visa status (I94 Form) documenting authorization to receive payment for work performed along with a U.S social security number will be provided to the University prior to payment by the University. 3. ACCESS TO RECORDS. The Contractor shall maintain reasonable records , including evidence that the services actually were performed and the identity of all individuals paid for such services, and shall allow access to those records by the University, any sponsor, the State of Michigan, or the Comptroller General of the United States or their authorized representatives. 4. OWNERSIDP OF WORK PRODUCTS. Any discovery, patent, copyright, invention, work papers, software, software applications, written materials, publications, data, information, by-product or end-product arising as a direct result of the performance of this Contract shall be the sole property of the University. The University hereby grants to Contractor a non-exclusive royalty-free right and license to use for the Contractor's internal non-commercial research and development activities all unpublished data, know-how, materials and unpatented inventions or discoveries arising from this contract, reserving a right to the University to use such subject matter for any non-commercial uses .. (Continued on next page ... ) Complete this section when processing payments for partial performance of services Current Payment (A) Prior Payment(s) B Total Payments (A + B) Personal Services .. .. ........ ...... ........ ................... .. ................... ....... $ ____ _ Expenses ....... ...... ........ ... ...... ..... ... ... ..... ........ ...................... ............ ____ _ Total .... ........... ... ... ......... ... ... .. ... ..... ........ .. ..... .... ....... ..... ....... ......... $ __ ~0~.0~0 This is a Renewal Yes Q No 0 O 00 $ 0.00 0 .00 $ __ _.....o ""'o"'"o MSU is an Affirmative Action/Equal Opportunity Institution Page I 5. TERMINATION. Either the University or the Contractor may terminate its obligations under this Contract by giving the other party prior written notice of such termination, specifying the intended date of termination; provided, however, that upon request from the University, the Contractor shall continue performance until the University can find a replacement contractor or for an additional thirty (30) days after the specified termination date, whichever is the shorter time period. Upon termination, an equitable settlement shall be made for actual costs incurred by the Contractor up to the date of termination. 6. UNIVERSITY EMPLOYEES. The Contractor will not hire any employee of the University to perform any services covered by this agreement without prior written approval from the Office of the Provost for academic employees or from the Assistant Vice President for Human Resources for non academic employees 7. CONFIDENT AL INFORMATION. The Contractor shall not publish or otherwise disclose, except to the University and except matters of public record, any information or data obtained in the course of performance of this Contract from private individuals, organizations, or public agencies, in a publication by which the information or data furnished by any particular person or establishment can be identified, except with the written consent of such person or establishment. 8. ACKNOWLEDGMENT OF SPONSORSHIP. The Contractor agrees that in any publication acknowledgment shall be made of sponsorship by the University and/or other sponsor by use of the following statement: "This work was performed under the sponsorship of THE BOARD OF TRUSTEES OF MICHIGAN STATE UNIVERSITY and (insert any other sponsor). This work does not necessarily represent the views of the University or the sponsoring agency." If the publication is copyrighted, the statement, "Reproduction of this article, with the customary credit to the source, is permitted." Shall be added. With the exception of acknowledging sponsorship of research, the name of the University may not be used in publications, news releases, advertising, speeches, technical papers, photographs, and other releases of information regarding this Contract or data developed under this Contract without written approval of the University. 9. CONFLICT OF INTEREST. The Contractor affirms that to the best of his/her knowledge there exists no actual or potential conflict between Contractor's family, business, or financial interests and his/her services under this Contract, and in the event of change in either his/her private interests or services under this Contract, he/she will inform the University regarding possible conflict of interest which may arise as a result of such change. I 0. TOTAL AGREEMENT. This Contract contains the entire agreement between the parties superseding any prior or concurrent agreements as to the services being provided, and no oral or written terms or conditions which are not contained in this Contract shall be binding. This Contract may not be changed except by mutual agreement of the parties reduced to writing and signed. 11. ASSIGNMENT/TRANSFER/SUBCONTRACTING. The Contractor shall not assign, transfer, subcontract, or otherwise give to or impose on any other party any obligation or right of the Contractor under this Contract, without the prior written consent of the University. 12. INDEMNIFICATION. The Contractor shall indemnify, defend and hold the University harmless from any charge, fine, penalty, or judgment arising out of, or in any way resulting from, the Contractor's performance under this Contract, and should the University be required to make payments or incur costs of defense (including reasonable attorney fees) for any such reason, the Contractor shall fully reimburse the University. The obligations of the Contractor under this paragraph 12 shall survive any termination of this Contract or completion of the Contractor's performance under this Contract. CONTRACTOR ACCEPTANCE: I agree to the terms above and on the first page of this Contract. The amount of the charges for services under this Contract does not exceed my normal and customary rate. I certify that the Social Security Number or Federal Employer Identification Number on the first page of this Contract is correct and I am not subject to backup withholding unless otherwise noted. I am not a current University employee or enrolled as an MSU student. Signature: Date: MICHIGAN STATE UNIVERSITY ACCEPTANCE: The service to be provided is necessary, the cost for the service is reasonable, and the service cannot now be provided by current University employees. The department has retained documentation of the reasonableness of the cost and the selection process employed to secure the most qualified contractor available for contracts of $10,000 or less. Documentation of same is attached for all contracts for amounts greater than $10,000. Signature: Signature: Signature: Signature: Authorized signer for account to be charged (also responsible for attaching documentation of bidding procedures followed or sole source justification). Date: Dean or Vice President or designate Contract and Grant approval, if charging accounts 61-0000 to 61-9999. Date: Date: Date: Purchasing Department for contracts greater than $10,000. (See section 76 of the Manual of Business Procedures for guidance). Procedure for routing of Contract The Contract form should be completed before work commences. I. Originating department for Contractor's signature and authorized signer for 2. 3. 4. account to be charged. Appropriate Dean or Vice President, if required. Contract and Grant Administration, if charging accounts 61-0000 to 61-9999. Purchasing Department, if required (see section 76 of the University's Manual of Business Procedures for guidance). 5. Originating department, maintain until completion of services. 6. At completion of services (or for each partial payment), originating department acknowledges performance, forwards original contract with the Direct Payment Voucher (for partial payments send original contract with the first payment and copies thereafter), original travel receipts, Contractor's signed invoice and other documentation, to Accounts Payable in the Controller's Office for payment. r ~ Distribution: 0<'1.5 1~ .... l -'AAtite <'.or '1 -Accounts Payable ~ -Originating Department Cc I' 1 ~ f''1 -Depsrtm@Ht Y-GU-ew -Contractor ·-/'() ~Purchasing , ~ $10,000 & woma n/minority-owned - contractor.} • Please refer to Section 76 of the Manual of Business Procedures for specific procedures on determining employee versus independent contractor status and processing of payments. Contact the Accounts Payable Department (5-0331) to determine proper payment procedure of nonresident alien Contractors and available tax treaty provisions. Page 2 03 / 26 / 2001 MON 10:51 FAX 517 353 2024 MSU PURCHASING DEPT 14] 001 / 001 ~ - MICHIGAN STATE UNIV[RSITY PROFESSIONAL PERSONAL SERVICES CONTRACT WITH INDEPENDENT CONTRACTOR (This Contract form should be completed beforls' work commences) Michigan State University (rderred LO in this Contr.:ict .:is University) enters into a binding agreement with: Contractor: Phone No.: Address: - - . . . . , . , . - - - , - , - - - , - , - , -~~ - - - - - - - - - - - - - - - - - - - - - - - - - - - - -~ - - - - - - - - . City: sr;itc: ___________ Zip Code: __ ____ _ _ (I lnmc •ddrr.ss. ,r 1,iuiviuu,l) U.S. Citizen: Yes __ No __ If No, Country of Citizenship: - - - - - - - - - - - and Residence: If No, arc you a non-resident alien? ___ Visa Type __ ___ _ Resident alien? __ _ Incorporated: Yes __ No __ If Yes, Profit __ Nonprofit _ _ If No, circle lype of business (P.:irtncrship/Sole Pruprietorship) and give name of l';llinC'r or Sole Proprietor, if different frorn Contractor above: - - - - - - - - - - - - - - U.S. Social Security Number or U.S. Federal Employf'r lnC'ntific::cition Number - - - - · - - - - - - - - - - - ~ - - - - - - - - ~ubjecl lo b,Khtp withholding: Yes __ No NATURE OF Sl:KVICES TO BE R.ENDERED: PERFORMED AT (LOCATION): 51% Ownershi Woman Owned Minoricy Owned~ Asian Indian ...Black Eskimo Hispanic Na.t'ive Oriental COPY--TO PURCHASING PERFORMANCE SCHEDULE: Starting date: Endi.ng date: Tocal Hours COMPENSATION INFORMATION: Accounl(s) lo be charged: - - - - - - - - - - Rate of P ay - - - - - - - - - - - - - - - - - - - - - - - - - - - - (indicate hQlirly, daily, total project, etc.) Servir.cs shill! not exceed: $ - - - - - - - - - -~ - - - - - Nature of Ex p e n s e s : - - - - - - - - - - - - - - - - - P-dyment terms:----- l:x:penses shall not exceed: $ - - - - - - - - ·~ - - - - -- --,.- - - - : - - - - · - - - - DEPARlMENTAL CONTACT PERSON: The Contractor should communicate with the following departmental rep,.cscntalive regarding this contr;ict: N;ime: Phone No. : - - - - - - - - - - Address: _. - - - - - - - - - - - - - - - - - - - - The Departmenrs responsibility for supporting the performance uf services is limited to the following: ... - - - - - - - - - - - - CONTRACTOR ACCEPTANCE: I .igree to the terms above ar1d on the reverse of this Contract. The amount of the charges for services under this C:onlr;)Cl dties not exceed my norm.ii .:ind customary rate. I certify th;it the above Soci,·ll Seet1rity Number or l'edernl Employer Identification Number i~ corrl;!ct and l am not ,ubject to backup withhold ing unless otherwise 11011?.d. I am not a current University employee or enrolled as an MSU student. Signalur,>.: ____ Date: _ ________ _ When the ,igned Contrnc::t is foxe.d between the parlics, the Cunlrdclur must sign ;ind date the front and the terms 011 the reverse $ide o( the form . A signature/date sp.icc is provided at the bouorn uf the p;ige on the reverse side. MICHIGAN STATE UNIVERSITY ACCEPlANCE: The servir.c to be provided is necess;iry, the cost for the service is reasonable, and the service cannot now be provided by current University employee:~. Tlw dt'pc1.rlment has ret.:iincd donimentation uf the re;isonahlC'ncss of the cost and the sclC'ction process employed to scc:urC' thC' n10Sl qualified contractor available for contracts of $10,000 ur le~~. Documentation of same is attached for .ill contracts for (1rnounts greater than $10,000. Signature: Aulhoriz:ed !'iignr-1 r,·H M,·o~Jlll {1,., I.it' 1.l1dr~~ (.sb.r., r~:-.p 3/28/01 1 :09PM Re: Independent Contractor Service Contract It looks great to me. I don't have a problem eliminating the hard copy. However, I will check with Desiree and Bob Eash and let you know their opinions as well. Thanks for all of the assistance. Pam Pamela D. George Purchasing Director 102 Angell Building East Lansing Ml 48824-1234 Phone: 517-355-0357 Fax: 517-353-2024 »> "Marge Toomey" 03/28/01 10:56AM »> I had the revisions Desiree faxed to me made to the forms on our web site. The web address (Controller Forms Download) is provided below. The forms are in Word, Excel and PDF format. Let me know of any further modifications. http://www.ctlr.msu.edu Once you are at the web site, at the top of the page, click on Forms Download, choose Accounting/Accounts Payable, then scroll down to ex76c and look at each form in each of the three formats. NOTE: My suggestion is to do away with the inventoried forms at Stores. I know Purchasing has no concern with just having the form available on the web; Greg has some concerns and I will review ordering stats {from Jan Rouse) with him . Please advise me on what the next step will be. MICHIGAN STATE U N VERS ITY PROFESSIONAL PERSONAL SERVICES CONTRACT WITH INDEPENDENT CONTRACTOR (This Contract form should be completed before work commences) Michigan State University (referred to in the Contract as University) enters into a binding agreement with: Contractor: Address (home address, if individual): City: U.S. Citizen: Yes Q No Q Phone No.: State: Zip Code: If No, Country of Citizenship: - - - - - - - - - - - and Residence: IfNo, are you a non-resident alien? _____ Visa Type If Yes, Profit O Nonprofit O If No, pick type of business Sole Proprietorship Resident alien? - - - - - - - - - - - and give name of Incorporated: Yes Q No Q Partner or Sole Proprietor, if different from Contractor above: U.S. Social Security Number or U.S. Federal Employer Identification Number: Subject to backup withholding: Yes Q No Q ~ ATURE OF SERVICES TO BE RENDERED: PERFORMED AT (LOCATION): PERFORMANCE SCHEDULE: Starting date: Ending date: Total hours: COMPENSATION INFORMATION: Account(s) to be charged.:..: _ __ __ ___ _ _____ _ ___ _ ___ _ __ Payment terms . .:..: _________ ____ _ _ Rate of Pay: (indicate hourly, daily, total project, e t c . ) " "$ - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Services shall not exceed: ~ - - - - - - - - - - - - - - - - - - Expenses shall not exceed: $ ____ ____ ___ _ __ _ _ Nature of Expenses: DEPARTMENTAL CONTACT PERSON: The Contractor should communicate with the following departmental representative regarding this contract: Name: Address: The Department's responsibility for supporting the performance of services is limited to the following: Phone No.: CONDITIONS AND ROUTING PROCEDURE: 1. INDEPENDENT CONTRACTOR. The Contractor will act as an independent contractor under this Contract, and neither the Contractor nor any employee or agent of the Contractor is an employee of the University due to this Contract. The Contractor will provide the services and achieve the results specified by the University free from the direction or control of the University as to means and methods of performance. 2. NONRESIDENT ALIEN. If the Contractor is a nonresident alien performing services in the United States or it's territories, the Contractor agrees that proof of visa status (I94 Form) documenting authorization to receive payment for work performed along with a U.S social security number will be provided to the University prior to payment by the University. 3. ACCESS TO RECORDS. The Contractor shall maintain reasonable records, including evidence that the services actually were performed and the identity of all individuals paid for such services, and shall allow access to those records by the University, any sponsor, the State of Michigan, or the Comptroller General of the United States or their authorized representatives. 4. OWNERSHIP OF WORK PRODUCTS. Any discovery, patent, copyright, invention, work papers, software, software applications, written materials, publications, data, information, by-product or end-product arising as a direct result of the performance of this Contract shall be the sole property of the University. The University hereby grants to Contractor a non-exclusive royalty-free right and license to use for the Contractor's internal non-commercial research and development activities all unpublished data, know-how, materials and unpatented inventions or discoveries arising from this contract, reserving a right to the University to use such subject matter for any non-commercial uses. TERMINATION. Either the University or the Contractor may terminate its obligations under this Contract by giving the other party prior written notice of such tennination, specifying the intended date of termination; provided, however, that upon request from the University, the Contractor shall continue performance until the University can find a replacement contractor or for an additional thirty (30) days after the specified termination date, whichever is the shorter time period. Upon tennination, an equitable settlement shall be made for actual costs incurred by the Contractor up to the date f() termination. D 6. UNIVERSITY EMPLOYEES. The Contractor will not hire any employee of the University to perform any services covered by this agreement Q., ·J 1 without prior written approval from the Office of the Provost for academic employees or from the Assistant Vice President for Human Resources for -1'.) n n-academic employees. (Continued on next page ... ) Complete this section when processing payments for partial performance of services Personal Services ...... ..... ..... ........ .. ......... ........................... ... .... . $ ____ _ Expenses .. .......................................... ....... ..... .. ...... ...... .. .......... .. _ _ _ _ _ -i;~ T~ ~~ ····; : = ····;v~~S~ :s ,: Affi~ati,:A:olliEq,al Oppommlcy IOITT'.:ti:o $ $ 0.00 0.00 0.00 Page I Current Payment (A) Prior Payment(s) B Total Pavments (A+ B) 7. CDNFIDENTAL INFORMATION. The Contractor shall not publish or otherwise disclose, except to the University and except matters of public record, any information or data obtained in the course of performance of this Contract from private individuals, organizations, or public agencies, in a publication by which the information or data furnished by any particular person or establishment can be identified, except with the written consent of such person or establishment. 8. ACKNOWLEDGMENT OF SPONSORSHIP. The Contractor agrees that in any publication acknowledgment shall be made of sponsorship by the University and/or other sponsor by use of the following statement: "This work was performed under the sponsorship of THE BOARD OF TRUSTEES OF MICHIGAN STATE UNIVERSITY and (insert any other sponsor). This work does not necessarily represent the views of the University or the sponsoring agency." If the publication is copyrighted, the statement, "Reproduction of this article, with the customary credit to the source, is permitted." Shall be added. With the exception of acknowledging sponsorship of research, the name of the University may not be used in publications, news releases, advertising, speeches, technical papers, photographs, and other releases of information regarding this Contract or data developed under this Contract without written approval of the University. 9. CONFLICT OF INTEREST. The Contractor affirms that to the best of his/her knowledge there exists no actual or potential conflict between Contractor's family, business, or financial interests and his/her services under this Contract, and in the event of change in either his/her private interests or services under this Contract, he/she will inform the University regarding possible conflict of interest which may arise as a result of such change. 10. TOTAL AGREEMENT. This Contract contains the entire agreement between the parties superseding any prior or concurrent agreements as to the services being provided, and no oral or written terms or conditions which are not contained in this Contract shall be binding. This Contract may not be changed except by mutual agreement of the parties reduced to writing and signed. 11. ASSIGNMENT/TRANSFER/SUBCONTRACTING. The Contractor shall not assign, transfer, subcontract, or otherwise give to or impose on any other party any obligation or right of the Contractor under this Contract, without the prior written consent of the University. 12. INDEMNIFICATION. The Contractor shall indemnify, defend and hold the University harmless from any charge, fine, penalty, or judgment arising out of, or in any way resulting from, the Contractor's performance under this Contract, and should the University be required to make payments or incur costs of defense (including reasonable attorney fees) for any such reason, the Contractor shall fully reimburse the University. The obligations of the Contractor under this paragraph 12 shall survive any termination of this Contract or completion of the Contractor's performance under this Contract. CONTRACTOR ACCEPTANCE: I agree to the terms above and on the first page of this Contract. The amount of the charges for services under this Contract does not exceed my normal and customary rate. I certify that the Social Security Number or Federal Employer Identification Number on the first page of this Contract is correct and I am not subject to backup withholding unless otherwise noted. I am not a current University employee or enrolled as an MSU student. Signature: Date: MICIDGAN STATE UNIVERSITY ACCEPTANCE: The service to be provided is necessary, the cost for the service is reasonable, and the service cannot now be provided by current University employees. The department has retained documentation of the reasonableness of the cost and the selection process employed to secure the most qualified contractor available for contracts of $10,000 or less. Documentation of same is attached for all contracts for amounts greater than $ I 0,000. Signature: Signature: Signature: Signature: Authorized signer for account to be charged (also responsible for attaching documentation of bidding procedures followed or sole source justification). Date: Dean or Vice President or designate Contract and Grant approval, if charging accounts 61-0000 to 61-9999. Date: Date: Date: Purchasing Department for contracts greater than $10,000. (See section 76 of the Manual of Business Procedures for guidance). Procedure for routing of Contract The Contract form should be completed before work commences. I . Originating department for Contractor's signature and authorized signer for Copy Distribution: account to be charged. 2. Appropriate Dean or Vice President, if required. 3. Contract and Grant Administration, if charging accounts 61-0000 to 61-9999. 4. Purchasing Department, if required (see section 76 of the University's Manual of Business Procedures for guidance). 5. Originating department, maintain until completion of services. 6. At completion of services ( or for each partial payment), originating department acknowledges performance, forwards original contract with the Direct Payment Voucher (for partial payments send original contract with the first payment and copies thereafter), original travel receipts, Contractor's signed invoice and other documentation, to Accounts Payable in the Controller's Office for payment. White Pink -Accounts Payable -Originating -Department Yell ow -Contractor Please refer to Section 76 of the Manual of Business Procedures for specific procedures on determining employee versus independent contractor status and processing of payments. Contact the Accounts Payable Department (5-0331) to determine proper payment procedure of nonresident alien Contractors and available tax treaty provisions. Paee 2 From: To: Date: Subject: Greg Sober Georgep@msu .edu; quinney@msu .edu; Toomey, Marge 3/29/01 7:38AM Re: Independent Contractor Service Contract Should we include a statement like "Check all that apply" ? >» Marge Toomey 03/28/01 10:56AM >» I had the revisions Desiree faxed to me made to the forms on our web site. The web address (Controller Forms Download) is provided below. The forms are in Word, Excel and PDF format. Let me know of any further modifications . http://www.ctlr.msu.edu Once you are at the web site, at the top of the page, click on Forms Download, choose Accounting/Accounts Payable, then scroll down to ex76c and look at each form in each of the three formats. NOTE: My suggestion is to do away with the inventoried forms at Stores . I know Purchasing has no concern with just having the form available on the web; Greg has some concerns and I will review ordering stats (from Jan Rouse) with him. Please advise me on what the next step will be. INSTRUCTIONS: 1. Prepare typewritten in quadruplicate and obtain required signatures. 2. Refer to manual of Business Procedure for correct preparation. 3. Send first three copies to Accounts Payable. Room 360, Administration Building. NAME ADDRESS TAXID MICHIGAN STATE UN VERS TY DIRECT PAYMENT VOUCHER DISTRIBUTION : WHITE - Controller's Office GREEN - Return to Department with BLUE - Check Number Remittance Advice (to be returned with check) PINK - Department Copy PAYEE ACCOUNT TO BE CHARGED PURPOSE: This voucher is to be used when the issue of a requistion and purchase order is not possible because of the nature of the payment .A PLEASE BE EXPLICIT IN THE REASON FOR EXPENDITURE WHERE A REFUND IS INVOLVED. GIVE THE RECEIPT NUMBER THAT RECORDED PAYMENT. WI / \ DEPARTMENT ADDRESS ACCOUNT NUMBER ..JI· ~ I a~ 0'7 I ~OBJ ECT CLASS -- l I AMOUNT AMOUNT o d cL· Ll r1 I I e,oDL ~ - l lt~tl c) - add c:: " V oa e_ H e_,t f/..£P/rft~D Gj .,, I CERTIFY THIS PAYMENT IS APPROPRIATE, CORRECT, AND MADE IN ACCORD WITH UNIVERSITY POLICY AND PROCEDURE. TOTAL PAYMENT $0.00 APPROVED TELEPHONE UNIT ADMINISTRATOR EMAIL DATE AUDIT CHECK NUMBER AND DATE BUDGET APPROVAL DATE 1 40 24 780 (REV. 4 92) INSTRUCTIONS: 1. Refer to Manual of Business Procedure Section 75. 2. Send white and blue copies to Accounts Payable, 360 Administration Building. MICHIGAN STATE u N I V E R s I T y REIMBURSEMENT VOUCHER DISTRIBUTION: White--Controller's Office Blue--Mailed to payee with check. Pink--Department copy PAYEE ACCOUNT TO BE CHARGED Name Dept. Room/Building PURPOSE: DATE ITEM DESCRIPTION (Ada / UMt+ O,nJl-/ / / / Department Account Name Account Number Object Class Amount - q/ I I I / / Total TOTAL SIGNATURE (Required when lacking receipt--items $25 or Jess) $0.00 ~dd,. VOuc._!LV JJrL ,(£1_ l.R:: b ..__, -- - I I ---- I CERTIFY THE EXPENSES CLAIMED HEREIN WERE NECESSARY AND REASONABLE IN CARRYING OUT MY UN IVERSITY RESPONSIBILITIES AND ARE REIMBURSABLE UNDER UNIVERSITY POLICY Signed Approved Telephone Payee's Signature Administrative Senior I I Date Date Fax Contracts & Grants Accounts Payable Accounting TOTAL CLAIM $0.00 CHECK NUMBER and DATE Stock # 140-2646 0-19183 MSU rs an Affrrmatrve Actron/Equal Opportunrty lnstrtutron MICHIGAN STATE U N VERSITY PROFESSIONAL PERSONAL SERVICES CONTRACT WITH INDEPENDENT CONTRACTOR (This Contract form should be completed before work commences) Michigan State University (referred to in the Contract as University) enters into a binding agreement with: Contractor: Address (home address, if individual): City: U.S. Citizen: Yes Q No Q Phone No.: State: Zip Code: and Residence: - - - - - - - - - - - - - - - Visa Type ~=a===R:..:;::es::..:i.:::de::.:n:;.:t:.;.a:::li:.:e:,;;n.:.?~= . - - - - - - - - - - Incorporated: Yes O No Q If Yes, Profit O Nonprofit O . If No, pick type of business !Sole Proprietorship i and give name of Partner or Sole Proprietor, if ditferent from Contractor above: - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - U.S. Social Security Number or U.S. Federal Employer Identification Number: Subject to backup withholding: Yes O No Q IfNo, Country of Citizenship: If No, are you a non-resident alien? REPORTING PURPOSES ONLY COPY TO PURCHASING WHEN CONTRACT IS WITH WOMAN/MINORITY-OWNED VENDOR (EVEN IF< OR = $10,000). 51 % Ownerships: Woman OwnedQ Minority Owned: African Amer. Q Hispanic Amer. Q Native Amer.Q Asian-Pacific Amer.Q Asian-Indian Amer.Q NATURE OF SERVICES TO BE RENDERED: PERFORMED AT (LOCATION): PERFORMANCE SCHEDULE: Starting date: COMPENSATION INFORMATION: Ending date: Total hours: Account(s) to be charged.,_: _ __ __ ___ ___ _ _____________ Payment terms . .,_: ___________ ___ _ Rate of Pay: (indicate hourly, daily, total project, e t c . )~ - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Services shall not exceed: " ' - - - - - - - - - - - - - - - - - - -E xp en s e s shall not exceed : $ Nature of Expenses: DEPARTMENTAL CONTACT PERSON: The Contractor should communicate with the following departmental representative regarding this contract: Name: Address: The Department's responsibility for supporting the performance of services is limited to the following: Phone No.: CONDITIONS AND ROUTING PROCEDURE: I. INDEPENDENT CONTRACTOR. The Contractor will act as an independent contractor under this Contract, and neither the Contractor nor any employee or agent of the Contractor is an employee of the University due to this Contract. The Contractor will provide the services and achieve the results specified by the University free from the direction or control of the University as to means and methods of performance. 2. NONRESIDENT ALIEN. If the Contractor is a nonresident alien performing services in the United States or it's territories, the Contractor agrees that proof of visa status (I94 Form) documenting authorization to receive payment for work performed along with a U.S social security number will be provided to the University prior to payment by the University. 3. ACCESS TO RECORDS. The Contractor shall maintain reasonable records, including evidence that the services actually were performed and the identity of all individuals paid for such services, and shall allow access to those records by the University, any sponsor, the State of Michigan, or the Comptroller General of the United States or their authorized representatives. 4. OWNERSHIP OF WORK PRODUCTS. Any discovery, patent, copyright, invention, work papers, software, software applications, written materials, publications, data, information, by-product or end-product arising as a direct result of the performance of this Contract shall be the sole property of the University. The University hereby grants to Contractor a non-exclusive royalty-free right and license to use for the Contractor's internal non-commercial research and development activities all unpublished data, know-how, materials and unpatented inventions or discoveries arising from this contract, reserving a right to the University to use such subject matter for any non-commercial uses .. (Continued on next page ... ) Complete this section when processing payments for partial performance of services Current Payment (A) Prior Payment(s) B Total Payments (A + B) Personal Services .. ...... .... .... .. ... ........ .... .. ... .... .... ...................... .... . $ ____ _ Expenses .. .. .... ....... ....... ......... .... ..... ....... ........ ............. ........ ......... ... ____ _ Total .... ... .... .................... ........... ... .... .............. ... ....... .... ........ .... .... $ 0.00 This is a Renewal Yes O No 0 O 00 $ 0.00 0.00 $ __ _ 0-0-0 MSU is an Affirmative Action/Equal Opportunity Institution Page I 5. TERMINATION. Either the University or the Contractor may terminate its obligations under this Contract by giving the other party prior written notice of such termination, specifying the intended date of termination; provided, however, that upon request from the University, the Contractor shall continue performance until the University can find a replacement contractor or for an additional thirty (30) days after the specified termination date, whichever is the shorter time period. Upon termination, an equitable settlement shall be made for actual costs incurred by the Contractor up to the date of termination. 6. UNIVERSITY EMPLOYEES. The Contractor will not hire any employee of the University to perform any services covered by this agreement without prior written approval from the Office of the Provost for academic employees or from the Assistant Vice President for Human Resources for non academic employees 7. CONFIDENT AL INFORMATION. The Contractor shall not publish or otherwise disclose, except to the University and except matters of public record, any information or data obtained in the course of performance of this Contract from private individuals, organizations, or public agencies, in a publication by which the information or data furnished by any particular person or establishment can be identified, except with the written consent of such person or establishment. 8. ACKNOWLEDGMENT OF SPONSORSHIP. The Contractor agrees that in any publication acknowledgment shall be made of sponsorship by the University and/or other sponsor by use of the following statement: "This work was performed under the sponsorship of THE BOARD OF TRUSTEES OF MICHIGAN STATE UNIVERSITY and (insert any other sponsor). This work does not necessarily represent the views of the University or the sponsoring agency." If the publication is copyrighted, the statement, "Reproduction of this article, with the customary credit to the source, is permitted." Shall be added. With the exception of acknowledging sponsorship of research, the name of the University may not be used in publications, news releases, advertising, speeches, technical papers, photographs, and other releases of information regarding this Contract or data developed under this Contract without written approval of the University. 9. CONFLICT OF INTEREST. The Contractor affirms that to the best of his/her knowledge there exists no actual or potential conflict between Contractor's family, business, or financial interests and his/her services under this Contract, and in the event of change in either his/her private interests or services under this Contract, he/she will inform the University regarding possible conflict of interest which may arise as a result of such change. I 0. TOT AL AGREEMENT. This Contract contains the entire agreement between the parties superseding any prior or concurrent agreements as to the services being provided, and no oral or written terms or conditions which are not contained in this Contract shall be binding. This Contract may not be changed except by mutual agreement of the parties reduced to writing and signed. 11. ASSIGNMENT/TRANSFER/SUBCONTRACTING. The Contractor shall not assign, transfer, subcontract, or otherwise give to or impose on any other party any obligation or right of the Contractor under this Contract, without the prior written consent of the University. 12. INDEMNIFICATION. The Contractor shall indemnify, defend and hold the University harmless from any charge, fine, penalty, or judgment arising out of, or in any way resulting from, the Contractor's performance under this Contract, and should the University be required to make payments or incur costs of defense (including reasonable attorney fees) for any such reason, the Contractor shall fully reimburse the University. The obligations of the Contractor under this paragraph 12 shall survive any termination of this Contract or completion of the Contractor's performance under this Contract. CONTRACTOR ACCEPTANCE: I agree to the terms above and on the first page of this Contract. The amount of the charges for services under this Contract does not exceed my normal and customary rate. I certify that the Social Security Number or Federal Employer Identification Number on the first page of this Contract is correct and I am not subject to backup withholding unless otherwise noted. I am not a current University employee or enrolled as an MSU student. Signature: Date: MICHIGAN STATE UNIVERSITY ACCEPTANCE: The service to be provided is necessary, the cost for the service is reasonable, and the service cannot now be provided by current University employees. The department has retained documentation of the reasonableness of the cost and the selection process employed to secure the most qualified contractor available for contracts of $10,000 or less. Documentation of same is attached for all contracts for amounts greater than $10,000. Signature: Signature: Signature: Signature: Authorized signer for account to be charged (also responsible for attaching documentation of bidding procedures followed or sole source justification). Date: Dean or Vice President or designate Contract and Grant approval, if charging accounts 61-0000 to 61-9999. Date: Date: Date: Purchasing Department for contracts greater than$ I 0,000. (See section 76 of the Manual of Business Procedures for guidance). Procedure for routing of Contract The Contract form should be completed before work commences. I. Originating department for Contractor's signature and authorized signer for Copy Distribution: 2. 3. 4. account to be charged. Appropriate Dean or Vice President, ifrequired. Contract and Grant Administration, if charging accounts 61-0000 to 61-9999. Purchasing Department, ifrequired (see section 76 of the University's Manual of Business Procedures for guidance). 5. Originating department, maintain until completion of services. 6. At completion of services (or for each partial payment), originating department acknowledges performance, forwards original contract with the Direct Payment Voucher (for partial payments send original contract with the first payment and copies thereafter), original travel receipts, Contractor's signed invoice and other documentation, to Accounts Payable in the Controller's Office for payment. Qiginal to Accounts Payable Copy to Originating Department Copy to Contractor Copy to Purchasing when contract is with Woman/ Minority-owned vendor (even if < or= $10,000). Please refer to Section 76 of the Manual of Business Procedures for specific procedures on detennining employee versus independent contractor status and processing of payments. Contact the Accounts Payable Department (5-0331) to determine proper payment procedure of nonresident alien Contractors and available tax treaty provisions. Page 2 Copy to Purchasing when contract is with woman/minority-owned vendor ( even if < or = $10,000). Copy to Purchasing when contract is with woman/minority-owned vendor (regardless of dollar amount). l~~\ 1J01MICHICAN STATE , 0 \11\:JU N I V E R S I T Y PROFESSIONAL PERSONAL SERVICES CONTRACT WITH INDEPENDENT CONTRACTOR (This Contract form should be completed before work commences) f d-P / {loe:_ / K Is Michigan State University (referred to in the Contract as University) enters into a binding agreement with: Contractor: Address (home address, if individual}: Phone No.: Ci : U.S. Citizen: Yes No If No, Country of Citizenship: If No, are you a non-resident alien? Visa Type and Residence: - - - - - - - - - - - - - - - Resident alien? - - - - - - - - - - - - State: Zi Code: No Incorporated : Yes Sole Proprietor, if different from Contractor above: - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - U.S. Social Security Number or U.S. Federal Employer Identification Number: - - - - - - - , - - - - - - - , - - - - - - - - - - - - - , . , - - - - - - Subject to backup withholding: Yes If Yes, Profit Nonprofit __ If No, circle type of business (Partnership/Sole Proprietorship) and give name of Partner or .c. c£- ~ $/Otz'i, (COPY TO PuicHASING IF < OR = $ 10,000) V /hS u f- ~ 1_ ~ 'h /'h f:z Y'/)r;:,c_f-5 i,y /lJ 1ntv/Yy f/Lh(l/c;-5 REPORTING PURPOSES ONLY 51% Ownerships: Woman Owned D Minority Owned: African Amer. D Hispanic Amer. D Native Amer. D Asian-Pacific Amer. D Asian-Indian Amer. D /i..~ No NATURE OF SERVICES TO BE RENDERED: PERFORMED AT (LOCATION): PERFORMANCE SCHEDULE: Starting date: COMPENSATION INFORMATION: Ending date: Total hours: Account(s) to be charged~: __ ___________ __ _ ___ ___ ___ Payment t e rm s~ : - - - - - - - - - - - - - - - Rate of Pay: (indicate hourly, daily, total project, etc.)~ -- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Services shall not exceed: ~ - -- - - - - - - - - - - - - - - -Exp en s e s shall not exceed: $ - - - - - - - - - - - - - - - Nature of Expenses: DEPARTMENTAL CONTACT PERSON: The Contractor should communicate with the following departmental representative regarding this contract: Name: Phone No.: The Department's responsibility for supporting the performance of services is limited to the following: CONDITIONS AND ROUTING PROCEDURE: I. INDEPENDENT CONTRACTOR. The Contractor will act as an independent contractor under this Contract, and neither the Contractor nor any employee or agent of the Contractor is an employee of the University due to this Contract. The Contractor will provide the services and achieve the results specified by the University free from the direction or control of the University as to means and methods of performance. 2. NONRESIDENT ALIEN. If the Contractor is a nonresident alien performing services in the United States or it's territories, the Contractor agrees that proof of visa status (194 Form) documenting authorization to receive payment for work performed along with a U.S social security number will be provided to the University prior to payment by the University. 3. ACCESS TO RECORDS. The Contractor shall maintain reasonable records, including evidence that the services actually were performed and the identity of all individuals paid for such services, and shall allow access to those records by the University, any sponsor, the State of Michigan, or the Comptroller General of the United States or their authorized representatives. 4. OWNERSHIP OF WORK PRODUCTS . Any discovery, patent, copyright, invention, work papers, software, software applications, written materials, publications, data, information, by-product or end-product arising as a direct result of the performance of this Contract shall be the sole property of the University. The University hereby grants to Contractor a non-exclusive royalty-free right and license to use for the Contractor' s internal non-commercial research and development activities all unpublished data, know-how, materials and unpatented inventions or discoveries arising from this contract, reserving a right to the University to use such subject matter for any non-commercial uses .. (Continued on next page ... ) Complete this section when processing payments for partial performance of services Personal Services .... ........ .. ........ .... ................................................ $ ____ _ Expenses ....... ... .......... .... ........ ........ ..... .... .............. ....... ........ ........... _ __ _ _ Total ........... ..................... .. .. ..... .... ................... ..... ........... ............. $ ____ _ This is a Renewal Yes D No D Current Payment (A) Prior Payment(s) B Total Payments (A + B) $ ____ _ $ ____ _ MSU is an Affirmative Action/Equal Opportunity Institution Page I 5. TERMINATION. Either the Uni versity or th e Contractor may terminate its obl igations under this Contract by gi ving the other party prior written notice of such termination, specifying the intended date of termination ; provided, however, that upon request from th e University, the Contractor shall continue perform<)rice unti l the Un iversity can find a replacement contractor or for an additional thirty (30) days after the specified termination date, whichever is the shorter time period. Upon termination, an equitable settlement shall be made for actual costs incurred by the Contractor up to the 'date of termination. 6. UNIVERSITY EMPLOYEES. The Contractor will not hire any employee of the University to perform any services covered by this agreement without prior written approval from the Office of the Provost for academic employees or from the Assistant Vice President for Human Resources for non academic employees 7. CONFIDENT AL INFORMATION. The Contractor shall not publish or otherwise disclose, except to the University and except matters of public record, any information or data obtained in the course of performance of this Contract from private individuals, organizations, or public agencies, in a publication by which the information or data furnished by any particular person or establishment can be identified, except with the written consent of such person or establishment. 8. ACKNOWLEDGMENT OF SPONSORSHIP. The Contractor agrees that in any publication acknowledgment shall be made of sponsorship by the University and/or other sponsor by use of the following statement: "This work was performed under the sponsorship of THE BOARD OF TRUSTEES OF MICHIGAN ST A TE UNIVERSITY and (insert any other sponsor). This work does not necessarily represent the views of the University or the sponsoring agency." If the publication is copyrighted, the statement, "Reproduction of this article, with the customary credit to the source, is permitted." Shall be added . With the exception of acknowledging sponsorship of research, the name of the University may not be used in publications, news releases, advertising, speeches, technical papers, photographs, and other rel eases of information regarding this Contract or data developed under this Contract without written approval of the University. 9. CONFLICT OF INTEREST. The Contractor affirms that to the best of his/her knowledge there exists no actual or potential conflict between Contractor's family, business, or financial interests and his/her services under this Contract, and in the event of change in either his/her private interests or services under this Contract, he/she will inform the University regarding possible conflict of interest which may arise as a result of such change. I 0. TOTAL AGREEMENT. This Contract contains the entire agreement between the parties superseding any prior or concurrent agreements as to the services being provided, and no oral or written terms or conditions which are not contained in this Contract shall be binding. This Contract may not be changed except by mutual agreement of the parties reduced to writing and signed. 11. ASSIGNMENT/TRANSFER/SUBCONTRACTING. The Contractor shall not assign, transfer, subcontract, or otherwise give to or impose on any other party any obligation or right of the Contractor under this Contract, without the prior written consent of the University. 12. INDEMNIFICATION. The Contractor shall indemnify, defend and hold the University harmless from any charge, fine, penalty, or judgment arising out of, or in any way resulting from, the Contractor's performance under this Contract, and should the University be required to make payments or incur costs of defense (including reasonable attorney fees) for any such reason, the Contractor shall fully reimburse the University. The obligations of the Contractor under this paragraph 12 shall survive any termination of this Contract or completion of the Contractor's performance under this Contract. CONTRACTOR ACCEPTANCE: I agree to the terms above and on the first page of this Contract. The amount of the charges for services under this Contract does not exceed my normal and customary rate. I certify that the Social Security Number or Federal Employer Identification Number on the first page of this Contract is correct and I am not subject to backup withholding unless otherwise noted. I am not a current University employee or enrolled as an MSU student. Signature: Date: MICHIGAN STATE UNIVERSITY ACCEPTANCE : The service to be provided is necessary, the cost for the service is reasonable, and the service cannot now be provided by current University employees. The department has retained documentation of the reasonableness of the cost and the selection process em Joyed to secure the most qualified contractor available for contracts of $10,000 or less. Documentation of same is attached for all contracts for amounts greater than $10,000. Signature: Signature: Signature: Signature: Authorized signer for account to be charged (also responsible for attaching documentation of bidding procedures followed or sole source justification). Date: Dean or Vice President or designate Contract and Grant approval, if charging accounts 61 -0000 to 61-9999. Date: Date: Date: Purchasing Department for contracts greater than $10,000. (See sectfon 76 of the Manual of Business Procedures for guidance). Procedure for routing of Contrac The Contract form should be completed before work commences. 1. Originating department for Contractor's signature and authorized signer for account to be charged . 2. Appropriate Dean or Vice President, if required. 3. Contract and Grant Administration, if charging accounts 61-0000 to 61-9999. Purchasing Department, if required (see section 76 of the University's Manual 4. of Business Procedures for guidance). 5. Originating department, maintain until completion of services. 6. At completion of services ( or for each partial payment), originating department acknowledges performance, forwards original contract with the Direct Payment Voucher (for partial payments send original contract with the first payment and copies thereafter), original travel receipts, Contractor's signed invoice and other documentation, to Accounts Payable in the Controller' s Office for payment. Please refer to Section 76 of the Manual of Business Procedures for specific procedures on determining employee versus independent contractor status and processing of payments. Contact the Accounts Payable Department (5-0331) to determine proper payment procedure of nonresident alien Contractors and available tax treaty provisions. Page 2 MICHIGAN STATE UNIVERSITY 77 April 29, 2002 TO: FROM: MAU Budget Pr sonnel Greg Sober Ws i/;.ll--- (} SUBJECT: NONRESIDENT ALIEN PAYMENT PROCESSING UPDATE The Manual of Business Procedures has been updated to clarify issues relating to compensating certain nonresident aliens. (This information does not relate to payments to MSU employees or enrolled students.) Both the Immigration and Naturalization Service (INS), and the Internal Revenue Service (IRS) have promulgated a number of regulatory changes relating to issuing payments to nonresident aliens (NRA). The INS has provided relief in the area of international visitors admitted to the United States on B1, B2, (WB1 or WB2) visas . The IRS has introduced several new forms along with more stringent procedural requirements . A new Section 77 "Nonresident Alien (NRA) Independent Contractors and NRA Recipients of Honorarium, Rents, Royalties and Awards" is provided in the Manual of Business Procedures . Section 76 "Independent Contractors" has been modified by removing reference to nonresident aliens (all transactions with independent contractors are to conform to the requirements of Section 76.) A summary of the changes is · provided below. INS Allows Payment of Honorarium Under very limited circumstances, NRA entering the USA with B1 (Visitor for Business) or B2 (Visitor for Tourism) visa status may be paid a non-contractual honorarium in appreciation for their providing personal service to MSU (similarly for those issued visas designated as WB1, WB, WB2 or WT). Previously, holders of these visas were not eligible to receive compensation of any kind. While the INS has not yet promulgated the regulations necessary to fully administer this, they have issued an advisory letter that we will use to enable our issuing payments under the enabling legislation . Payment of an honorarium to these individuals must be formalized on a "Professional Personal Services Contract With Independent.Contractor'' form consistent with MSU policy. The partner form "Independent Contractor Determination and Documentation" must also be completed as specified by University policy. Finally, a new MSU form, "Certification for International Visitors .Entering the U.S. With B1/WB1, Or B2/WB2 Visa Status" has been designed for use in documenting our compliance with the restrictions imposed by the INS when making honorarium payments to B1 or B2 international visitors . Please refer to Section 76 and Section 77 of the Manual of Business Procedures for specific guidance. INS Allows Reimbursernent of Travel Expenses The INS relief also permits paying reimbursement of documented travel expenses to visitors entering with B2/WB2 visa status . (B1/WB1 visa holders were already eligible for these reimbursements). Note these expenses must be documented in accord with University travel regulations (Section 70 of the Manual of Business Procedures) to qualify. The new MSU form, "Certification for International Visitors Entering the U.S . With B1/WB1, Or B2/WB2 Visa Status" must be completed to document compliance with INS restrictions . Please note that INS has taken these preliminary steps pending their promulgation of regulations to enable the American Competitiveness and Workforce Improvement Act (ACWIA) of 1998. It may be necessary for MSU to modify procedures again to conform to the final regulations. 5 OFFICE OF THE CONTROLLER Accounting Department Michigan State University 360 Administration Building East Lansing, Ml 48824-1046 Accounting Section 517 /355-5000 FAX: 517/353-1706 Accounts Payable Section 517/353-2011 FAX: 517/353-1706 http://ctlr.msu.edu/acctg MSU is an affirmative-action, equal-opportunity institution. MAU Budget Personnel Nonresident Alien Payment Processing Update April 29, 2002 Page 2 IRS Introduces New Forms The IRS has introduced several new or revised forms and has mandated additional procedures. IRS Form 8233 has been updated . A more complex Form W-8ECI has replaced IRS Form 4224. A more complex Form W-8BEN has replaced Form 1001 . A new form W-8EXP applicable to payments made to non-profit nonresident alien organizations is now required . Perhaps the most significant change promulgated by the IRS is the new requirement that all NRA individuals compensated for rendering independent personal services must complete either an IRS Form 8233, "Exemption From Withholding on Compensation for Independent (and Certain Dependent) Personal Services of a Nonresident Alien Individual", or an IRS Form W-8BEN, "Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding". Previously, only those NRA applying for tax treaty benefits were required to complete an IRS form. On the bright side, the new IRS regulations facilitate paying a NRA who has not been issued a U.S. tax identification number (Social Security Number, Individual Tax Identification Number, or Employer Identification Number as appropriate) . While tax treaty benefits cannot be extended without the benefit of a U.S. tax ID number, payment can still be made after withholding income taxes. Please refer to Section 77 of the Manual of Business Procedures for specific guidance. Obtain Guidance In Advance The Office for International Students and Scholars (OISS) should be consulted prior to extending any invitation to a nonresident alien. If you are not certain about whether a particular visa classification or set of circumstances allows for payment, OISS can help. Please contact Chris Bargerstock, Immigration Specialist, at 353-1720. If you have questions about honorarium or contractual fee payments, please call Phyllisia Pryor or Pat Lynn at 353-2011. If you need assistance on reimbursing documented travel expenses, please call the Travel Office at 353-4882 . MEM 0429 INS IRS UPDATE MSU Manual of Business Procedures: Volume I April 2002 Page I of 10 SECTION 77: NONRESIDENT ALIEN (NRA) INDEPENDENT CONTRACTORS AND NRA RECIPIENTS OF HONORARIUM, RENTS, ROYALTIES AND A WARDS I. OVERVIEW IL GEN ERAL INS AND IRS REQUIREMENTS III. !RS FORMS AND FILINGS Individual recipients of compensation A. B. Fore ign fiduciaries. paitnerships or corporations C. Foreign tax-exempt organizations D. A1tists, athletes and ente1tain ers E. Recipients of scho larships, fe ll owships or royalty income F. Recipients of rental income derived from property located in the U.S. G. Payments of U.S. source income made to a U.S. agent fo r the benefit of a NRA payee IV. PAYMENT PROCESSING AND REPORTING V. PERIOD OF VALIDITY FOR IRS FORMS VI. FREQUENTLY ASKED QU ESTIONS VII. EXHIBITS SECTION 77: NONRESIDENT ALIEN (NRA) INDEPENDENT CONTRACTORS AND NRA RECIPIENTS OF HONORARIUM, RENTS, ROY AL TIES AND AW ARDS I. OVERVIEW Michigan State University carries out its mission on an international scale. As such, those with whom we collaborate include U.S. citizens/residents and those who are not. This section of the Manual pertains to issuing compensation and other payments to those individuals who are neither U.S. citizens nor U.S. residents . (This section will not address matters relating to compensating employees or issuing payments to enrolled students. For information on compensating employees, see Manual of Business Procedures Section 55 "Payroll Department"~ he Payroll Department Internet address is httJ://ctlr.msu.edu/ a roll/int_info.htm. For mformation on issuing scholarships, fellowships or other awards to enrolled students, please call 5050.) tudent Accounts-Fees/Sponsored Aid/Fellowships at 355- Issuing payments to international visitors and guests is a complex matterJ\The U.S. Immigration and Naturalization Service (INS) administers the immigration laws of the U.s,immigration law refers to anyone who is not a U.S. citizen as an "alien". MSU Manual of Business Procedures: Volume 1 April 2002 Page 2 of 10 · Immigration law categorizes aliens into three groups. .) A. Non-immigrants. These are aliens to whom the INS has given permission to reside temporarily in the United States. Generally, a non-immigrant has represented to the INS that he/she is a permanent resident of a foreign country to which he/she fully intends to return after a temporary ' stay in the U.S. The U.S. Internal Revenue Service (IRS) refers to these individuals as "nonresident aliens" (NRA). It is this category of alien that will be addressed in this Section" B. Immigrants. These are aliens who have the right to reside permanently in the United States. Eventually, these aliens can earn a "green card" (INS Form 1-551). A green card is tangible proof of immigrant status. The IRS refers to these individuals as "resident-aliens" .~ esident-aliens are paid in the same manner as U.S. citizens.,folicies and procedures addressing payments to resident-aliens are included in other sections of the Manual. C. Undocumented aliens. This category of alien is present in the U.S. illegally (either having entered without proper authorization, or due to having violated or overstayed the terms of their entry permit). This Section will not address payments to these individuals since they cannot be issued. Successful completion of a payment transaction to a NRA is informed by INS and IRS federal government regulations and by MSU policy and procedure) ssuing payments to NRA individuals and companies for services rendered as independent contractors, guest lecturers, researchers, artists or performers; or as recipients of rents or royalties; or as recipients of scholarships/fellowships as non enrolled students is a complex process to navigate successfully .,Jn the course of planning for and completing these transactions, the University must meet the regulatory requirements of both the INS and the IRS . A summary of requirements for payments to nonresident aliens is provided in table form in Exhibit 77- ¥ series of diagrams that summarize transaction processing are presented in Exhibit 77-M. II. GENERAL INS AND IRS REQUIREMENTS A. Departments should clear the engagement of a NRA independent contractor with the Office for International Students and Scholars (OISS) Immigration Specialist BEFORE employing him/her for a compensated work engagement performed in the U.S. including payment of a contractual fee, non-binding honorarium, or undocumented travel expenses. The phone number for OISS is 353-1720. The Internet address for OISS is http://www.isp.msu.edu/oiss/. Accounts Payable should also be consulted to obtain guidance on the payment documentation required to satisfy INS and IRS rules, and to avoid misunderstandings relating to the payment. Accounts Payable may be reached by phone at 353-2011. Obtaining guidance in advance of inviting the NRA will help to ensure that payments you intend to make to the NRA are permissible and will avoid embarrassment or ill-will between your guest and your department. B. A NRA who is to be paid either a contractual fee, a non-binding honorarium or reimbursement for undocumented travel expenses for services rendered in the United States, must have entered the United States under a visa status that permits him/her to receive compensation from MSU as an independent contractor, and must be within the visa's limitations. The NRA must provide proof of this work/compensation authorization by a copy of a validated INS Form 1-94 "Arrival Departure Record". A validated Form 1-94 is proof oflNS permission to enter the U.S., the date of entry, the place of arrival, the "class of admission" (which corresponds to the visa class), the length of time the traveler may remain in the United States, and any special conditions which may apply to the visit. The department must submit a copy of the validated Form 1-94 with the Direct Payment Voucher (DPV) . MSU Manual of Business Procedures: Volume 1 April 2002 Page 3 of 10 1. A Canadian national might not be provided an 1-94 if they are entering the U.S. as a Bl or B2 category visitor (see 11.D. below) ~A Canadian national lacking a validated INS Form 1-94 may complete the MSU "Substitute Form I-94 for Use By Certain Bl Or B2 Visitors From Canada" (see Exhibit 77-B) ,. 2. A Native American visitor needs neither a visa status nor a Form 1-94 to enter the U.S )Iowever, as per the discussion that follows, a Native American payee is subject to income tax withholding. With a U.S. tax identification number and proper application, a Native American may obtain exemption as a resident of a treaty country if he/she provides his/her U.S. tax identification number on the application. C. For payments to NRA who have entered the U.S. under a visa status that permits compensation (such as a Jl) it is mandatory that the NRA provide the department with his/her U.S. social security number (SSN). If a SSN has not yet been assigned, the contractor must apply for one at the Social Security Administration on Form SS-5 "Application for Social Security Card" (see Exhibit 77-Cl) or Form SS-5-FS (see Exhibit 77-C2) if applying from the NRA country of residence. A copy of the validated SS-5 (or SS-5-FS) can be submitted along with the DPV, 1-94, and other payment documentation. Once the SSN has been assigned, the NRA must provide it to Accounts Payable. D. Payments to NRA who have entered the U.S. under a Bl or B2 (or Waiver Bl, WBl or Waiver B2, WB2) visa status present unique challenges. (NOTE: The INS is still finalizing federal regulations relating to payments made to B 1 /B2 visitors.) 1. B 1 and B2 visitors cannot be paid contractual compensation. Under very limited circumstances, they are permitted to receive non-binding honorarium, or reimbursement for documented or undocumented travel expenses. See Manual of Business Procedures Section 70 for travel expense reimbursement policies and procedures. 2. If a B 1/B2 visitor is to be paid an honorarium, or reimbursed for undocumented travel expenses he/she must satisfy certain limitations imposed by the INS. The MSU form "Certification for International Visitors Entering the U.S. With B 1/WB 1 or B2/WB2 Visa Status" (see Exhibit 77-D) is provided to document and attest to the NRA's eligibility to receive such payments. The NRA and an authorized departmental person must sign the form. The limitations the NRA must satisfy are: a. The payment to the international visitor is an honorarium or reimbursement for documented or undocumented travel expenses. b. The payment relates to service that the international visitor performed for MSU that is considered to be usual academic activity (teaching, research, public service). c. The duration of the international visitor\ stay at MSU does not exceed nine days. d. The international visitor has received similar payments from no more than five U.S. institutions or organizations during the previous six month period. 3. For payments to NRA who have entered the U.S. under a Bl or B2 visa status, it is mandatory that the NRA provide either a U.S. SSN, or a U.S. Individual Tax ID Number (ITIN). If the NRA has neither a SSN nor an ITIN, the payee must apply for an ITIN on IRS Form W-7 "Application for IRS Individual Taxpayer Identification Number" (see Exhibit 77-E). If an IRS Acceptance Agent is available in the NRA's country of residence, they may be able to apply for the ITIN prior to coming to the MSU Manual of Business Procedures: Volume 1 April 2002 Page 4 of 10 U.S. (refer to IRS W-7 instructions). (If the NRA does not have a U.S. social security number, he/she is not permitted to apply for one while visiting under a B 1 or B2 visa.) Generally, application must be made by the NRA in person at an office of the IRS. Proof of application ( copy of IRS Form W-7) must be provided with the DPV and other payment documentation. Once the ITIN has been assigned, the NRA must provide it to Accounts Payable. E. Agreements to pay a contractual fee, non-binding honorarium, or undocumented travel expense reimbursement for personal services rendered in the United States must be formalized using the MSU form "Personal Services Contract With Independent Contractor" (PSC) and MSU form "Independent Contractor Status Determination and Documentation" (ICSDD). (See Manual of Business Procedures Section 76.II and 76.III for further discussion.) F. Unless exempted by a current tax treaty with an NRA IC's country ofresidence, payments for services rendered, reimbursement of undocumented travel expenses, payment of rents, royalties or awards to an NRA are subject to federal income tax withholding of 30% and state income tax withholding of 4.1 %. G. A listing of countries whose residents may be eligible for limited exemption under tax treaty is provided (see Exhibit 77-F). The actual treaty may not exempt any or all of the payment you anticipate making to your nonresident alien IC. In order to learn the details of the tax treaty provisions for a particular country, please call Accounts Payable at 353-2011. If the country of residence for your nonresident alien is not listed on Exhibit 77-F, the payment made to the IC will be subject to income tax withholding. III. IRS FORMS AND FILINGS A. Individual recipients of compensation: All individual recipients of compensation, honorarium or reimbursement of undocumented travel expenses for performance of personal services ( excluding compensation as an employee), who choose to apply for tax treaty benefits must complete IRS Form 8233, "Exemption from Withholding on Compensation for Independent Personal Services of a Nonresident Alien Individual" (see Exhibit 77-G). NRA IC's who do not qualify for tax treaty benefits ( or those who choose not to apply for them) must complete (in part) an IRS Form W-8BEN "Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding" (see Exhibit 77-H) in order to document their status as an NRA. 1. IRS Form 8233 and Form W-8BEN can be obtained from.the Accounts Payable Department, 360 Administration Bldg., 353-2011. Departments may also download a copy of the forms and instructions for their use from the Controller's Office Web site at http ://ctlr.msu.edu/download. 2. A contractor applying for tax treaty benefits must complete IRS Form 8233 through item 14 and sign where indicated. 3. A contractor not applying for treaty benefits should complete Form W-8BEN through item 8 and sign where indicated. 4. Generally, payees holding a Type F (student) or Type J (researcher/scholar) visa who are applying for treaty exemption must also complete a supporting statement to satisfy IRS requirements. The completed statement should be stapled to the completed IRS Form 8233. The statement required will vary by country. Please call Accounts Payable at 353-2011 to obtain guidance. 5. Payees holding a Type F (student) visa are seldom authorized to engage in MSU Manual of Business Procedures: Volume 1 April 2002 Page 5 of 10 I performing independent personal services for compensation. When "curricular practical training" is authorized, they must provide a copy oflNS Form I-20 endorsed by the MSU Office for International Students and Scholars, or the Designated School Official (DSO) from their sponsoring U.S. university. When "optional practical training" is authorized, they must present INS Form I-688B, or I- 766 issued and approved by INS. 6. Payees holding a Type J (researcher/scholar) visa must present a copy oflNS Form IAP-66 endorsed by the Designated School Official from their sponsoring U.S. university. This approval is employer-specific, so MSU must be named as the approved employer . 7. The NRA contractor's U.S. tax identification number (U.S. social security number or U.S. Individual Tax ID Number - see discussion above at 77.II.C. and 77.II.D.3.) must be provided. If a U.S. tax identification number has not been assigned, the contractor must apply for one and provide proof of application to Accounts Payable. If neither a U.S. TIN nor proof of application for a TIN is provided, the NRA cannot apply for treaty benefits and the university must withhold income taxes from the payment. 8. IRS Form 8233 or Form W-8BEN (as appropriate), together with the DPV, I-94, PSC, the ICSDD and other required documentation should be forwarded to the Accounts Payable Department, 360 Administration Building. 9. The Accounts Payable Department will review and finalize IRS Form 8233 and mail it to the IRS if the NRA has applied for tax treaty benefits. 10. If the NRA IC has applied for tax treaty benefits, the exemption from withholding must be approved by the IRS before payment is made. It takes 10 business days for the IRS to respond to a request to exempt payment from withholding. 11. If the payee chooses not to avail himself/herself of available tax treaty benefits, a statement documenting this and signed by the payee must be included with the DPV ( or on the face of it). B. Foreign fiduciaries, partnerships or corporations: Foreign fiduciaries, partnerships or corporations engaged in a trade or business (and individuals providing something other than independent personal services such as rental operations - see III.A. above for individual personal services) in the United States are subject to income tax withholding. Internal Revenue Code Section 864 includes the provision of personal service in the U.S. in the definition of engaging in a trade or business in the U.S. Exemption from withholding may be accomplished by completing IRS Form W-8ECI, "Certificate of Foreign Person's Claim for Exemption From Withholding of Tax on Income Effectively Connected With the Conduct of a Trade or Business in the United States" (see Exhibit 77-I). Those NRA completing this form must file a U.S. income tax return. This exemRtion does not a12pjy to com12ensation or reimbursement of undocumented travel ex12enses related to 12ersonal services 12erformed by an individual. (Unless it relates to the conduct of a trade or business in the U.S. , fiduciaries, partnerships and corporations receiving income should file IRS Form W-8BEN rather than the W-8ECI. This would relate to receipt of royalties earned in the U.S., for example.) 1. IRS Form W-8ECI can be obtained from the Accounts Payable Department, 360 Administration Building, 353-2011. Departments may also download a copy of the form and instructions for their use from the Controller's Web site at htt12://ctlr.msu.edu/download/. 2. Once the contractor completes IRS Form W-8ECI, the form together with the DPV, MSU Manual of Business Procedures: Volume 1 April 2002 Page 6 of 10 I PSC, the ICSDD and other required documentation should be forwarded to the Accounts Payable Department, 360 Administrationr~ · 3. The contractor's U.S. tax identification number (TIN) must be provided. If a U.S.TIN has not been assigned, the contractor must apply to the IRS for an employer identification number (EIN) using Form SS-4 "Application for Employer Identification Number" (see Exhibit 77-J). Application may be submitted through the mail, by fax or by phone (refer to IRS SS-4 instructions). Individuals providing something other than personal services should apply for an ITIN from the IRS using IRS Form W-7. Proof of application must be provided to Accounts Payable. If a U.S. TIN is not provided, the university must withhold income taxes from the payment. C. Foreign tax-exempt organizations: Foreign tax-exempt organizations may be exempt from withholding. To obtain the benefit of tax-exempt status, these organizations must file IRS Form W-8EXP "Certificate of Foreign Government or Other Foreign Organization for United States Tax Withholding" (see Exhibit 77-K). This exemption does not agply to compensation or reimbursement of undocumented travel expenses related to personal services gerformed by an individual. 1. IRS Form W-8EXP can be obtained from the Accounts Payable Department, 360 Administration Building, 353-2011. Departments may also download a copy of the form and instructions for their use from the Controller's Web site at http://ctlr.msu.edu/download/. 2. Note that certain categories of declaration of tax-exempt entity status require written supporting statements from either the U.S. IRS or a U.S. attorney. 3. Once the contractor completes IRS Form W-8EXP, the form together with the DPV, PSC, the ICSDD and other required documentation should be forwarded to the Accounts Payable Department, 360 Administration,:~ · 4. The contractor's U.S. employer ID number (EIN) must be provided. If a U.S. EIN has not been assigned, the contractor must apply to the IRS for one using Form SS-4 "Application for Employer Identification Number". Proof of application must be provided to Accounts Payable. If a U.S. EIN is not provided, the university must withhold income taxes from the payment. 5. If a foreign tax-exempt organization is not applying for exemption from withholding, they must complete IRS Form W-8BEN. See item E.l. through E.3. below. D. Artists, athletes and entertainers: 1. Payments to NRA artists, athletes and entertainers can be problematic. This is a sub category of independent personal services. Typically, payments to artists, athletes and performers are subject to 34.1 % withholding. 2. This category of NRA can be an individual, partnership or corporation, or a tax exempt organization. As a general rule, processing payment to the NRA will be determined by the nature of the entity (e.g., individual, corporation, non-profit entity). See previous paragraphs for processing requirements of each category. 3. For individuals who may be eligible for reduced withholding due to a tax treaty, if the tax treaty with their country of residence contains a separate article that applies to "artists, athletes and entertainers", that article takes precedence over the "independent personal services" article. 4. For individual performers not eligible for tax treaty benefits, or for other entities, a MSU Manual of Business Procedures: Volume 1 April 2002 Page 7 of 10 reduced rate of federal withholding may be negotiated under an agreement prepared in accordance with IRS central withholding agreement procedure (see Exhibit 77-L) as stipulated in IRS Publication 515 "Withholding of Tax on Nonresident Aliens and Foreign Entities" . This agreement will incorporate all United States performance engagements by the NRA for withholding purposes. The agreement must be signed by the Commissioner of the IRS, all NRA(s) covered by the agreement, and by each withholding agent (including Michigan State University). 5. If payment for the benefit of a NRA artist, athlete or entertainer is issued to a U.S. agent, withholding taxes must be deducted. See Section 77.111.G. E. Recipients of scholarships, fellowships or royalty income: Scholarships and fellowships for non-degree candidates engaged in study, training or research are subject to income tax withholding at a rate of 18.1 % (14% Federal and 4.1 % State). Royalties are subject to 34.1 % income tax withholding. Recipients of scholarships or fellowships (not enrolled in a degree program engaged in study, training or research) or royalty income may be exempt from withholding. Fiduciaries, partnerships and corporations may also be eligible for reduced withholding on royalties. A listing of countries whose residents may be eligible for limited exemption of withholding from royalty income under tax treaty is provided (see Exhibit 77-F). The actual treaty may not exempt any or all of the royalty income you anticipate paying to the NRA. In order to learn the details of the tax treaty provisions for a particular country, please call Accounts Payable at 353-2011. If the country ofresidence for your NRA is not listed on Exhibit 77-F, the payment will be subject to income tax withholding. Amounts of per diem for subsistence paid by the U.S. Government Agency for International Development (USAID) to NRA engaged in a training program in the U.S. are exempt from withholding even though the amounts may be subject to income taxation. Confirmation of USAID as the source of the scholarship must be documented by award correspondence. J The NRA recipient of a scholarship or fellowship award (including a USAID stipend) or royalty income must complete IRS Form W-8BEN "Certificate of Foreign Status of Beneficial Owner for United States)\Withholding" whether or not they apply for tax treaty benefits. ,"1 f\ ~ " 1. IRS Form W-8BEN can be obtained from the Accounts Payable Department, 360 Administration Building, 353-2011. Departments may also download a copy of the form and instructions for their use from the Controller's Web site at http://ctlr.msu.edu/download/. 2. Once the recipient completes IRS Form W-8BEN, the form together with the DPV, and other required documentation (including Form 1-94 for scholarship/fellowship recipients) should be forwarded to the Accounts Payable Department, 360 Administratiollh 6 ~ · J 3. The income recipient's U.S. tax identification number (TIN) must be provided. If a U.S. TIN has not been assigned to an individual, the income recipient must apply to the IRS for a)(:U.S. Individual Tax ID Number (ITIN) using an IRS Form W-7 . If a · U.S . ITIN is not provided, the university must withhold income taxes from the · payment. Fiduciaries, partnerships and corporations and tax-exempt organizations must provide a U.S. Employer ID number to be eligible for any treaty benefits available i:;1roviding for reduced withholdin& These organizations may also request MSU Manual of Business Procedures: Volume 1 April 2002 Page 8 of 10 exemption from tax withholding by submitting IRS Form W-8ECI or W-8EXP as appropriate, (see Section 77.111.B . and 77.111.C. above). If W-8ECI or W-8EXP are filed, exemption will not be based on tax treaty, but rather on exemption for conduct of a trade or business in the U.S . or based on their status as a tax-exempt organization. F. Recipients of rental income derived from property located in the U.S.: 1. NRA recipients ofrental income that is derived from property located in the U.S. are generally subject to income tax withholding. Withholding may be avoided if they complete IRS Form W-8ECI , "Certificate of Foreign Person's Claim for Exemption From Withholding ~ on Income Effectively Connected With the Conduct of a Trade or Business in the United States" (Exhibit 77-1) and file the form with the university. A U.S. tax ID number is required. 2. See Section 77.111.B for instructions for completing Form W-8ECI. 3. If the NRA payee does not desire to or cannot complete Form W-8ECI, he/she may complete IRS Form W-8BEN to simply establish their status as a nonresident alien for tax purposes. Income taxes will be withheld from the payment. G. Payments of U.S. source income made to a U.S. agent for the benefit of a NRA payee: / J 1. According to IRS Regulation 1.1441-1 (b )(2)(ii), if the university makes a payment to a U.S. person (individual, partnership or corporation, etc.) with actual knowledge that the U.S. person is receiving the payment as an agent of an NRA individual, partnership, or corporation, the university must treat the payment as if it were made to the foreign person. This may occur relative tQ....'1artists and entertainers. This IRS Regulation mandates that withholding taxes be deducted from the payment made to the agent and that the entire payment be reported on IRS Form I042S in the name of the agent. The taxes withheld are refundable to neither the agent, nor to the NRA. 2. If payment must be made to an agent, making sure the contract(s) stipulate which payment( s) and the dollar amount( s) thereof are for the services of the agent, and which are to be passed through to the NRA recipient will be of benefit in avoiding an over withholding situation. Alternatively, if payment is made directly to the NRA, withholding may be avoided by the NRA submitting the appropriate IRS form noted in previous paragraphs (Form 8233, Form W-8ECSI and Form W-8EXP) . IV. PAYMENT PROCESSING AND REPORTING A. Upon receipt of the disbursement voucher, relevant IRS form and supporting documentation, Accounts Payable will review eligibility for payment and any requested treaty benefits. If the payment is determined to be exempt from withholding, a check will be issued for the gross amount of the DPV. B. If the payment is determined not to be exempt from withholding, a check will be issued for the net amount of the DPV after deducting taxes. Departmental accounts will be charged for the federal and state income tax withheld using a Journal Voucher Entry prepared by Accounts Payable. C. If the payment is determined to be subject to income tax withholding and the department would like to gross up the payment to result in an agreed-upon net payment amount to the NRA, the additional payment amount will also be reportable income and subject to income tax withholding. MSU Manual of Business Procedures: Volume 1 April 2002 Page 9 of 10 The formula for calculating the grossed-up amount is: (desired net amount) divided by 0.659 (which is 1.0 - 0.341) or, in the case of scholarship/fellowship, 0.819 (which is 1.0 - 0.181 ). This grossed-up amount will then be subject to income tax withholding at 34.1 % (18.1 % in the case of a scholarship/fellowship). D. IRS Form 1042S, "Foreign Person's U.S. Source Income Subject to Withholding" , is issued annually to each NRA IC, whether or not the individual has taxes withheld. Form 1042S, which is issued by the Payroll Department no later than March 15, reports all payments made during the previous calendar year. Questions about Form 1042S should be addressed to the Payroll Department, 355-5010. Payroll Department staff will refer inquiries to one of several sources for information on the underlying payments reported on the Form 1042S. V. PERIOD OF VALIDITY FOR IRS FORMS A. The IRS documents (8233 , W-8BEN, W-8ECI and W-8EXP) filed by the payee have defined expiration dates. B . IRS Form 823 3 is valid starting on the date the form is signed through December 31 of the same C. calendar year. IRS Form W-8BEN submitted with a U.S. TIN is valid until a change in circumstances makes information on the form invalid as long as one payment is issued annually to the NRA and is reported on IRS Form 1042-S. A W-8BEN submitted without a U.S . TIN is valid starting on the date the form is signed through December 31 of the same calendar year and continuing through the last day of the third succeeding calendar year unless a change in circumstances makes any information on the form incorrect. D. IRS Form W-8ECI is valid starting on the date the form is signed through December 31 of the same calendar year and continuing through the last day of the third succeeding calendar year unless a change in circumstances makes any information on the form incorrect. E. IRS Form W-8EXP submitted with a U.S . TIN is valid until a change in circumstances makes information on the form invalid as long as MSU issues one payment annually to the NRA and the payment is reported on IRS Form 1042-S. A W-8EXP submitted without a U.S. TIN is valid starting on the date the form is signed through December 31 of the same calendar year and continuing through the last day of the third succeeding calendar year unless a change in circumstances makes any information on the form incorrect. If the W-8EXP (without a U.S . TIN) has been submitted by an integral part of a foreign government, the form will remain in effect until a change in circumstances makes any information on the form incorrect. VI. FREQUENTLY ASKED QUESTIONS A. Where can I obtain guidance at MSU to ensure that I make the proper arrangements for a future visit of an international guest? B. Are payments to all international visitors handled the same way ? C. What is a visa? D. What is the INS Form I-94? E. What is a U .S. tax identification number? F. Can a nomesident alien avoid U.S. income tax withholding on taxable payments received from MSU? G. Are Native Americans who live outside the U.S. considered to be NRA? H. My NRA consultant tells me that MSU is his/her only client that requires this information. Is this true? I. My NRA consultant is subject to income tax withholding. We don't want to cause hard feelings with the NRA by issuing a check that is netted down by the withholding taxes. How can we make MSU Manual of Business Procedures: Volume 1 April 2002 Page 10 of 10 a pavment that will result in him/her receiving a net check in the amotmt we originally agreed to pav? VII. EXHIBITS Exhibit 77-A. Table - Summary of Requirements for Payments to Nonresident Aliens Exhibit 77-B. Substitute Form I-94 for Use By Certain Bl or B2 Visitors From Canada Exhibit 77-Cl. SSA Form SS-5 "Application for U.S. Social Security Card" Exhibit 77-C2. SSA Form SS-5-FS "Application for U.S. Social Security Card" (used when applying from NRA country of residence) Exhibit 77-D. Certification for International Visitors Entering the U.S. With Bl/WBl or B2/WB2 Visa Status Exhibit 77-E. IRS Form W-7 "Application for IRS Individual Taxpayer Identification Number (ITIN)" Exhibit 77-F. Table - Tax Treaty Summary Exhibit 77-G. IRS Form 8233 "Exemption from Withholding on Compensation for Independent Personal Services of a Nonresident Alien" Exhibit 77-H. IRS Form W-8BEN "Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding" Exhibit 77-I. IRS Form W-8ECI "Certificate of Foreign Person's Claim for Exemption From Withholding ~ on Income Effectively Connected With the Conduct of a Trade or Business in the United States" Exhibit 77-J. IRS Form SS-4 "Application for Employer Identification Number" Exhibit 77-K. IRS Form W-8EXP "Certificate of Foreign Government or Other Foreign Organization for United States Tax Withholding" Exhibit 77-L. Central Withholding Agreement Proceduri (excerpt from IRS Publication 515) ? Exhibit 77-M. Summary Transaction Diagrams t)f-\ SECTION 77: NONRESIDENT ALIEN (NRA) INDEPENDENT CONTRACTORS AND NRA RECIPIENTS OF HONORARIUM, RENTS, ROYALTIES AND AW ARDS OVERVIEW Michigan State University carries out its mission on an international scale. As such, those with whom we collaborate include U.S. citizens/residents and those who are not. This section of the Manual pertains to issuing compensation and other payments to those individuals who are neither U.S . citizens nor U.S. residents. (This section will not address matters relating to compensating employees or issuing payments to enrolled students. For information on compensating employees, see Manual of Business Procedures Section 55 "Payroll Department". The Payroll Department Internet address is htt_p://ctlr.msu.edu/payroll/int info.htm. For information on issuing scholarships, fellowships or other awards to enrolled students, please call Student Accounts-Fees/Sponsored Aid/Fellowships at 355-5050.) Issuing payments to international visitors and guests is a complex matter. The U .S. Immigration and Naturalization Service (INS) administers the immigration laws of the U.S. Immigration law refers to anyone who is not a U.S. citizen as an "alien". Immigration law categorizes aliens into three groups . A. Non-immigrants. These are aliens to whom the INS has given permission to reside temporarily in the United States. B. Generally, a non-immigrant has represented to the INS that he/she is a permanent resident of a foreign country to which he/she fully intends to return after a temporary stay in the U .S. The U.S. Internal Revenue Service (IRS) refers to these individuals as "nonresident aliens" (NRA). It is this category of alien that will be addressed in this Section. Immigrants. These are aliens who have the right to reside permanently in the United States. Eventually, these aliens can earn a "green card" (INS Form 1-551 ). A green card is tangible proof of immigrant status. The IRS refers to these individuals as "resident-aliens". Resident-aliens are paid in the same manner as U.S . citizens. Policies and procedures addressing payments to resident-aliens are included in other sections of the Manual. C. Undocumented aliens. This category of alien is present in the U.S. illegally ( either having entered without proper authorization, or due to having violated or overstayed the terms of their entry permit). This Section will not address payments to these individuals since they cannot be issued. Successful completion of a payment transaction to a NRA is informed by INS and IRS federal government regulations and by MSU policy and procedure. Issuing payments to NRA individuals and companies for services rendered as independent contractors, guest lecturers, researchers, artists or performers; or as recipients of rents or royalties; or as recipients of scholarships/fellowships as non-enrolled students is a complex process to navigate successfully. In the course of planning for and completing these transactions, the University must meet the regulatory requirements of both the INS and the IRS. A summary of requirements for payments to nonresident aliens is provided in table form in Exhibit 77-A. A series of diagrams that summarize transaction processing are presented in ;Exhtl?it:77-M. '9 ri- II. GENERAL INS AND IRS REQUIREMENTS A . Departments should clear the engagement of a NRA independent contractor with the Office for International Students and Scholars (OISS) Immigration Specialist BEFORE employing him/her for a compensated work engagement performed in the U.S. including payment of a contractual fee, non-binding honorarium, or undocumented travel expenses. The phone number for OISS is 353-1720. The Internet address for OISS is ht1;p://www.isp .msu.edu/oiss/mtiex:,'lrtmt. Accounts Payable should also be consulted to obtain guidance on the payment documentation required to satisfy INS and IRS rules, and to avoid misunderstandings relating to the payment. Accounts Payable may be reached by phone at 353-2011. Obtaining guidance in advance of inviting the NRA will help to ensure that payments you intend to make to the NRA are permissible and will avoid embarrassment or ill-will between your guest and your department. B. A NRA who is to be paid either a contractual fee, a non-binding honorarium or reimbursement for undocumented travel expenses for services rendered in the United States, must have entered the United States under a visa status that permits him/her to receive compensation from MSU as an independent contractor, and must be within the visa 's limitations. The NRA must provide proof of this work/compensation authorization by a copy of a validated INS Form 1-94 "Arrival Departure Record". A validated Form 1-94 is proof of INS permission to enter the U.S., the date of entry, the place of arrival, the "class of admission" (which corresponds to the visa class), the length of time the traveler may remain in the I United States, and any special conditions which may apply to the visit. The department must submit a copy of the validated Form 1-94 with the Direct Payment Voucher (DPV). 1. A Canadian national might not be provided an 1-94 if they are entering the U.S . as a Bl or B2 category visitor (see 11.D. below). A Canadian national lacking a validated INS Form 1-94 may complete the MSU ''Substitute Form 1-94 foiUse By Certain Bf Or B2 Visitors From Canada" (see Exhibit 77-B) 2. A Native American visitor needs neither a visa status nor a Form 1-94 to enter the U.S. However, as per the discussion that follows, a Native American payee is subject to income tax withholding. With a U.S. tax identification number and proper application, a Native American may obtain exemption as a resident of a treaty country if he/she provides his/her U.S. tax identificaticm number on the application. C. For payments to NRA who have entered the U.S. under a visa status that permits compensation (such as a Jl) it is mandatory that the NRA provide the department with his/her U.S. social security number (SSN). If a SSN has not yet been assigned, the contractor must apply for one at the Social Security Administration on Form SS-5 "Application for Social Security Card" (see Exhibit 77-Cl) or Form SS-5-FS (see Exhibit 77-C2) if applying from the NRA country ofresidence. A copy of the validated SS-5 (or SS-5-FS) can be submitted along with the DPV, 1-94, and other payment documentation. Once the SSN has been assigned, the NRA must provide it to Accounts Payable. D. Payments to NRA who have entered the U.S . under a Bl or B2 (or Waiver Bl, WBl or Waiver B2, WB2) visa status 2 present unique challenges. (NOTE: The INS is still finalizing federal regulations relating to payments made to B 1/B2 visitors.) 1. B 1 and B2 visitors cannot be paid contractual compensation. Under very limited circumstances, they are permitted to receive non-binding honorarium, or reimbursement for documented or undocumented travel expenses. See Manual of Business Procedures Section 70 for travel expense reimbursement policies and procedures. If a B 1/B2 visitor is to be paid an honorarium, or reimbursed for undocumented travel expenses he/she must satisfy certain limitations imposed by the INS. The MSU forn1 "Certification for International Visitors Entering the U.S . With Bl /WBl or B2/WB2 Visa Status" (see Exhibit 77-D) is provided to document and attest to the NRA ' s eligibility to receive such payments. The NRA and an authorized departmental person must sign the form. The limitations the NRA must satisfy are: a) The payment to the international visitor is an honorarium or reimbursement for documented or undocumented travel expenses. b) The payment relates to service that the international visitor performed for MSU that is considered to be usual academic activity (teaching, research, public service). c) The duration of the international visitor's stay at MSU does not exceed nine days. d) The international visitor has received similar payments from no more than five U.S. institutions or organizations during the previous six-month period. 3. For payments to NRA who have entered the U.S. under a Bl or B2 visa status, it is mandatory that the NRA provide either a U.S. SSN, or a U.S. Individual Tax ID Number (ITIN). If the NRA has neither a SSN nor an ITIN, the payee must apply for an ITIN on IRS Form W-7 "Application for IRS Individual Taxpayer Identification Number" (see Exhibit,77-E). Ifan IRS Acceptance Agent is available in the NRA's country of residence, they may be able to apply for the ITIN prior to coming to the U.S. (refer to IRS W-7 instructions). (If the NRA does not have a U.S. social security number, he/she is not permitted to apply for one while visiting under a Bl or B2 visa.) Generally, application must be made by the NRA in person at an office of the IRS. Proof of application ( copy of IRS Form W-7) must be provided with the DPV and other payment documentation. Once the ITIN has been assigned, the NRA must provide it to Accounts Payable. E. Agreements to pay a contractual fee, non-binding honorarium, or undocumented travel expense reimbursement for personal services rendered in the United States must be formalized using the MSU form "Personal Services Contract With Independent Contractor" (PSC) and MSU form "Independent Contractor Status Determination and Documentation" (ICSDD). (See Manual of Business Procedures Section 76.II and 76.Ill for further discussion.) F. Unless exempted by a current tax treaty with an NRA IC's country ofresidence, payments for services rendered, reimbursement of undocumented travel expenses, payment of rents, royalties or awards to an NRA are subject to federal income tax withholding of 30% and state income tax withholding of 4.1 %. G. A listing of countries whose residents may be eligible for limited exemption under tax treaty is provided (see Exhibit 77~f) . The actual treaty may not exempt any or all of the payment you anticipate making to your nonresident alien IC. In order to learn the details of the tax treaty provisions for a particular country, please call Accounts Payable at 353-2011. If the country of residence for your nonresident alien is not listed on Exhibit 77-F, the payment made to the IC will be subject to income tax withholding. ~ ~ III.IRS FORMS AND FILINGS A. Individual recipients of compensation: All individual recipients of compensation, honorarium or reimbursement of undocumented travel expenses for performance of personal services (excluding compensation as an employee), who choose to apply for tax treaty benefits must complete IRS FoIJl18233, "Exemption from Withholding on Compensation for Independent Personal Services of a Nonresident Alien Individual" (see Exhibit 77-G). NRA IC ' s who do not qualify for tax treaty benefits (or those who choose not to apply for them) must complete (in part) an IRS Fonri\£:E.8BEN "Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding" (see Exhibit 77-H) in order to document their status as an NRA. 1. IRS Form 8233 and Form W-8BEN can be obtained from the Accounts Payable Department, 360 Administration Bldg., 353-2011. Departments may also download a copy of the forms and instructions for their use from the Controller's Office Web site at http://ctlLmsu.edu/download. 0 2. A contractor applying for tax treaty benefits must complete IRS Form 8233 through item 14 and sign where indicated. 3. A contractor not applying for treaty benefits should complete Form W-8BEN through item 8 and sign where indicated. 4. Generally, payees holding a Type F (student) or Type J (researcher/scholar) visa who are applying for treaty exemption must also complete a supporting statement to satisfy IRS requirements. The completed statement should be stapled to the completed IRS Form 8233 . The statement required will vary by country. Please call Accounts Payable at 353-2011 to obtain guidance. 5. Payees holding a Type F (student) visa are seldom authorized to engage in performing independent personal services for compensation. When "curricular practical training" is authorized, they must provide a copy of INS Form I-20 endorsed by the MSU Office for International Students and Scholars, or the Designated School Official (DSO) from their sponsoring U.S. university. When "optional practical training" is authorized, they must present INS Form I- 688B, or I-766 issued and approved by INS. 6. Payees holding a Type J (researcher/scholar) visa must present a copy of INS Form IAP-66 endorsed by the Designated School Official from their sponsoring U.S . university. This approval is employer-specific, so MSU must be named as the approved employer 7. The NRA contractor's U.S. tax identification number (U.S. social security number or U.S. Individual Tax ID Number - see discussion above at 77.II.C. and 77.II.D .3.) must be provided. If a U.S. tax identification number has not been assigned, the contractor must apply for one and provide proof of application to Accounts Payable. If neither a U.S. TIN nor proof of application for a TIN is provided, the NRA cannot apply for treaty benefits and the university must withhold income taxes from the payment. IRS Fom1 8233 or Form W-8BEN (as appropriate), together with the DPV, I-94, PSC, the ICSDD and other required documentation should be forwarded to the Accounts Payable Department, 360 Administration Building. 8. 9. The Accounts Payable Department will review and finalize IRS Form 8233 and mail it to the IRS if the NRA has applied for tax treaty benefits. 10. If the NRA IC has applied for tax treaty benefits, the exemption from withholding must be approved by the IRS before payment is made. It takes 10 business days for the IRS to respond to a request to exempt payment from withholding. 11. If the payee chooses not to avail himself/herself of available tax treaty benefits, a statement documenting this and signed by the payee must be included with the DPV ( or on the face of it). B. Foreign fiduciaries, partnerships or corporations: Foreign fiduciaries, partnerships or corporations ( or individuals providing something other than independent personal services such as rental operations) engaged in a trade or business in the United States may claim exemption from withholding. This is accomplished by completing IRS Form W-8ECI, "Certificate of Foreign Person's Claim for Exemption From Withholding of Tax on Income Effectively C~nnected With the Conduct of a Trade or Business in the United States" (see Exhibit 77-I). Those NRA completing this form must file a U.S. income tax return. Again, this exemption does not apply to compensation or reimbursement of undocumented travel expenses related to personal services performed by an individual. (Unless it relates to the conduct of a trade or business in the U.S ., fiduciaries, partnerships and corporations receiving royalty income should file IRS Form W-8BEN rather than the W-8ECI.) 1. IRS Form W-8ECI can be obtained from the Accounts Payable Department, 360 Administration Building, 353-2011. Departments may also download a copy of the form and instructions for their use from the Controller's Web site at http:7/cdr.msu.edu/download/. 2. Once the contractor completes IRS Form W-8ECI, the form together with the DPV, PSC, the ICSDD and other required documentation should be forwarded to the Accounts Payable Department, 360 Administration. 3. The contractor's U.S. tax identification number (TIN) must be provided. If a U.S.TIN has not been assigned, the contractor must apply to the IRS for an employer identification number (EIN) using FormSS-4 "Application for Employer Identification Number" (see Exhibit 77-J). Application may be submitted through the mail, by fax or by phone (refer to IRS SS-4 instructions). Individuals providing something other than personal services should apply for an ITIN from the IRS using IRS Form W-7. Proof of application must be provided to Accounts Payable. If a U.S . TIN is not provided, the university must withhold income taxes from the payment. C. Foreign tax-exempt organizations: Foreign tax-exempt organizations may be exempt from withholding. To obtain the benefit of tax-exempt status, these organizations must file IRS Form W-8EXP "Certificate of Foreign Government or Other Foreign Organization for United States Tax Withholding" (see Exhibit 77-K). This exemption does not apply to compensation or reimbursement of undocumented travel expenses related to personal services performed by an individual. 1. IRS Form W-8EXP can be obtained from the Accounts Payable Department, 360 Administration Building, 353-2011. Departments may also download a copy of the form and instructions for their use from the Controller's Web site at http://ctfr.insu.edu/ download/. 2. Note that certain categories of declaration of tax-exempt entity status require written supporting statements from either the U.S. IRS or a U.S. attorney. 3. Once the contractor completes IRS Form W-8EXP, the form together with the DPV, PSC, the ICSDD and other required documentation should be forwarded to the Accounts Payable Department, 360 Administration. 4. The contractor's U.S. employer ID number (EIN) must be provided. If a U.S. EIN has not been assigned, the contractor must apply to the IRS for one using Form SS-4 "Application for Employer Identification Number". Proof of application must be provided to Accounts Payable. If a U.S. EIN is not provided, the university must withhold income taxes from the payment. If a foreign tax-exempt organization is not applying for exemption from withholding, they must complete IRS Form W-8BEN. See item E. l. through E.3. below. 5. D. Artists, athletes and entertainers: 1. Payments to NRA artists, athletes and entertainers can be problematic. This is a sub-category of independent personal services. Typically, payments to artists, athletes and performers are subject to 34.1 % withholding. 2. This category of NRA can be an individual, partnership or corporation, or a tax-exempt organization. As a general rule, processing payment to the NRA will be determined by the nature of the entity (e.g., individual, corporation, non profit entity). See previous paragraphs for processing requirements of each category. 3. For individuals who may be eligible for reduced withholding due to a tax treaty, if the tax treaty with their country of residence contains a separate article that applies to "artists, athletes and entertainers", that a1iicle takes precedence over the "independent personal services" article. If the constraints of the "artists" article are exceeded, the applicant may fall back to the provisions of the "independent personal services" article for relief if available. 4. For individual performers not eligible for tax treaty benefits, or for other entities, a reduced rate of federal withholding may be negotiated under an agreement prepared in accordance with IRS central withholding agreement procedure (see Exhibit 77-L,) as stipulated in IRS Publication 515 "Withholding of Tax on Nomesident Aliens and Foreign Entities". This agreement will incorporate all United States performance engagements by the NRA for withholding purposes. The agreement must be signed by the Commissioner of the IRS, all NRA(s) covered by the agreement, and by each withholding agent (including Michigan State University). If payment for the benefit of a NRA artist, athlete or entertainer is issued to a U.S. agent, withholding taxes must be deducted. See Section 77.III.G. 5. E. Recipients of scholarships, fellowships or royalty income: Scholarships and fellowships for non-degree candidates engaged in study, training or research are subject to income tax withholding at a rate of 18.1 % (14% Federal and 4.1 % State). Royalties are subject to 34.1 % income tax withholding. Recipients of scholarships or fellowships (not emailed in a degree program engaged in study, training or research) or royalty income may be exempt from withholding. Fiduciaries, partnerships and corporations may also be eligible for reduced withholding on royalties. A listing of countries whose residents may be eligible for limited exemption of withholding from royalty income under tax treaty is provided (see E~i.!:mz7t!11). The actual treaty may not exempt any or all of the royalty income you anticipate paying to the NRA. In orde;to learn the details of the tax treaty provisions for a particular country, please call Accounts Payable at 353-2011. If the country ofresidence for your NRA is not listed on Exhibit 77-F, the payment will be subject to income tax withholding. Amounts of per diem for subsistence paid by the U.S. Government Agency for International Development (USAID) to NRA engaged in a training program in the U.S. are exempt from withholding even though the amounts may be subject to income taxation. Confirmation ofUSAID as the source of the scholarship must be documented by award correspondence. The NRA recipient of a scholarship or fellowship award ( including a USAID stipend) or royalty income must complete IRS f9nuY.,-8BEr "Certificate of Foreign Status of Beneficial Owner for United States Withholding" whether or not they apply for tax treaty benefits. 1. IRS Form W-8BEN can be obtained from the Accounts Payable Department, 360 Administration Building, 353-2011. Departments may also download a copy of the form and instluctions for their use from the Controller's Web site at http://cdr.msu.edu/download/. 2. Once the recipient completes IRS Form W-8BEN, the form together with the DPV, and other required documentation (including Form I-94 for scholarship/fellowship recipients) should be forwarded to the Accounts Payable Department, 360 Administration. 3. The income recipient's U.S. tax identification number (TIN) must be provided. If a U.S. TIN has not been assigned to an individual, the income recipient must apply to the IRS for an U.S. Individual Tax ID Number (ITIN) using an IRS F.oi;m ... W-7. If a U.S. ITIN is not provided, the university must withhold income taxes from the payment. Fiduciaries, partrlerships and corporations and tax-exempt organizations must provide a U.S. Employer ID number to be eligible for any treaty benefits available providing for reduced withholding. These organizations may also request exemption from tax withholding by submitting IRS Form W-8ECI or W-8EXP as appropriate, (see Section 77.III.B. and 77 .III.C. above) . If W-8ECI or W-8EXP are filed, exemption will not be based on tax treaty, but rather on exemption for conduct of a trade or business in the U.S. or based on their status as a tax-exempt organization. F. Recipients of rental income derived from property located in the U.S.: l. NRA recipients of rental income that is derived from property located in the U.S. are generally subject to income tax withholding. Withholding may be avoided if they complete IRS f§rrn\;\TJ'.gsl, "Certificate of Foreign Person's Claim for Exemption From Withholding of Tax on Income Effectively Connected With the Conduct ofa Trade or Business in the United States" (Exhibit 77-I) and file the form with the university. A U.S. tax ID number is required. 2. See Section 77.III.B for instructions for completing Form W-8ECI. 3. If the NRA payee does not desire to or cannot complete Form W-8ECI, he/she may complete IRS Form Wr:?JrE:N', to pa~ent. simply establish their status as a nomesident alien for tax purposes. Income taxes will be withheld from the 0 G. Payments of U.S. source income made to a U.S. agent for the benefit of a NRA payee 1. According to IRS Regulation 1.1441-l(b)(2)(ii), if the university makes a payment to a U.S. person (individual, partnership or corporation, etc.) with actual knowledge that the U.S. person is receiving the payment as an agent ofan NRA individual, partnership, or corporation, the university must treat the payment as if it were made to the foreign person. This is a frequent circumstance with artists, and entertainers. This IRS Regulation mandates that withholding taxes be deducted from the payment made to the agent and that the entire payment be reported on IRS Form 1042S in the name of the agent. The taxes withheld are refundable to neither the agent, nor to the NRA. If payment must be made to an agent, making sure the contract(s) stipulate which payment(s) and the dollar amount(s) thereof are for the services of the agent, and which are to be passed through to the NRA recipient will be of benefit in avoiding an over withholding situation. Alternatively, if payment is made directly to the NRA, withholding may be avoided by the NRA submitting the appropriate IRS form noted in previous paragraphs (Form 8233, Form W-8ECSI and Form W-8EXP). 2. IV.PAYMENT PROCESSING AND REPORTING A. Upon receipt of the disbursement voucher, relevant IRS form and supporting documentation, Accounts Payable will review eligibility for payment and any requested treaty benefits. If the payment is determined to be exempt from withholding, a check will be issued for the gross amount of the DPV. B. If the payment is determined not to be exempt from withholding, a check will be issued for the net amount of the DPV after deducting taxes. Departmental accounts will be charged for the federal and state income tax withheld using a Journal Voucher Entry prepared by Accounts Payable. C. If the payment is determined to be subject to income tax withholding and the department would like to gross up the payment to result in an agreed-upon net payment amount to the NRA, the additional payment amount will also be reportable income and subject to income tax withholding. The formula for calculating the grossed-up amount is: ( desired net amount) divided by 0.659 (which is 1.0-0.341) or, in the case of scholarship/fellowship, 0.819 (which is 1.0- 0.181). This grossed-up amount will then be subject to income tax withholding at 34.1 % ( 18.1 % in the case of a scholarship/fellowship). IRS Form 1042S, "Foreign Person's U.S. Source Income Subject to Withholding", is issued annually to each NRA IC, whether or not the individual has taxes withheld. Form 1042S, which is issued by the Payroll Department no later than March 15, reports all payments made during the previous calendar year. Questions about Form 1042S should be addressed to the Payroll Department, 355-5010. Payroll Department staff will refer inquiries to one of several sources for information on the underlying payments reported on the Form 1042S. D. V. PERIOD OF VALIDITY FOR IRS FORMS A. The IRS documents (8233, W-8BEN, W-8ECI and W-8EXP) filed by the payee have defined expiration dates. IRS Form 8233 is valid starting on the date the form is signed through December 31 of the same calendar year. B. IRS Form W-8BEN submitted with a U.S. TIN is valid until a change in circumstances makes information on the form C. invalid as long as one payment is issued annually to the NRA and is reported on IRS Form 1042-S. A W-8BEN submitted without a U.S. TIN is valid starting on the date the form is signed through December 31 of the same calendar year and continuing through the last day of the third succeeding calendar year unless a change in circumstances makes any information on the form incorrect. E. D. IRS Form W-8ECI is valid starting on the date the form is signed through December 31 of the same calendar year and continuing through the last day of the third succeeding calendar year unless a change in circumstances makes any information on the form incorrect. IRS Form W-8EXP submitted with a U.S. TIN is valid until a change in circumstances makes information on the form invalid as long as MSU issues one payment annually to the NRA and the payment is reported on IRS Form 1042-S. AW- 8EXP submitted without a U.S. TIN is valid starting on the date the form is signed through December 31 of the same calendar year and continuing through the last day of the third succeeding calendar year unless a change in circumstances makes any information on the form incorrect. If the W-8EXP (without a U.S. TIN) has been submitted by an integral part of a foreign government, the form will remain in effect until a change in circumstances makes any information on the form incorrect. VI.FREQUENTLY ASKED QUESTIONS A. Where can I obtain guidance at MSU to ensure that I make the proper arrangements for a future visit of an international guest? B. Are payments to all international visitors handled the same way? C. What is a visa? D. What is the INS Form 1-94? E. F. G. H. I. What is a U.S. tax identification number? Can a nomesident alien avoid U.S. income tax withholding on taxable payments received from MSU? Are Native Americans who live outside the U.S. considered to be NRA? My NRA consultant tells me that MSU is his/her only client that requires this information. Is this true? My NRA consultant is subject to income tax withholding. We don't want to cause hard feelings with the NRA by issuing a check that is netted down by the withholding taxes. How can we make a payment that will result in him/her receiving a net check in the amount we originally agreed to pay? VII. EXHIBITS Exhibit 77~A'. Exhibit 77-B. Exhibit 77-Cl. Exhibit 77-C2. Table - Summary of Requirements for Payments to Nomesident Aliens Substitute Form 1-94 for Use By Certain B 1 or B2 Visitors From Canada SSA Form SS-5 "Application for U.S. Social Security Card" SSA Form SS-5-FS "Application for U.S. Social Security Card" (used when applying from NRA country of residence) Certification for International Visitors Entering the U.S. With Bl/WBl or B2/WB2 Visa Status IRS Form W -7 "Application for IRS Individual Taxpayer Identification Number (ITIN)" Table - Tax Treaty Summary IRS Form 8233 "Exemption from Withholding on Compensation for Independent Personal Services of a Nomesident Alien" IRS Form W-8BEN "Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding" IRS Form W-8ECI "Certificate of Foreign Person ' s Claim for Exemption From Withholding of Tax on Income Effectively Connected With the Conduct of a Trade or Business in the United States" IRS Form SS-4 "Application for Employer Identification Number" IRS Form W-8EXP "Certificate of Foreign Government or Other Foreign Organization for United States Tax Withholding" Central Withholding Agreement Procedure ( excerpt from IRS Publication 515) Summary Transaction Diagrams Exhibit 77-D. Exhibit 77~E .. Exhibit 77cF, Exhibif77 .. y; Exhibit 77-H! Exhibit 77-L Exhibit77:J. Exhibit 77-K. Exhibit 77-L. Exhibit 77-M. Alien Individual" (see Exhibit 77-G). NRA IC's who do not qualify for tax treaty benefits (or those who choose not to apply for them) must complete (in part) an IRS Form W-8BEN "Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding" (see Exhibit 77-H) in order to document their status as an NRA. 1. IRS Form 8233 and Form W-8BEN can be obtained from the Accounts Payable Department, 360 Administration Bldg., 35 3-2011. Departments may also download a copy of the forms and instructions for their use from the Controller' s Office Web site at http://ctlr.msu.edu/download. 2. A contractor applying for tax treaty benefits must complete IRS Form 8233 through item 14 and sign where indicated. 3. A contractor not applying for treaty benefits should complete Form W-8BEN through item 8 and sign where indicated. 4. Generally, payees holding a Type F (student) or Type J (researcher/scholar) visa who are applying for treaty exemption must also complete a supporting statement to satisfy IRS requirements. The completed statement should be stapled to the completed IRS Form 8233 . The statement required will vary by country. Please call Accounts Payable at 353-2011 to obtain guidance. 5. Payees holding a Type F (student) visa are seldom authorized to engage in performing independent personal services for compensation. When "curricular practical training" is authorized, they must provide a copy of INS Form 1-20 endorsed by the MSU Office for International Students and Scholars, or the Designated School Official (DSO) from their sponsoring U.S. university. When "optional practical training" is authorized, they must present INS Form I- 688B, or I-766 issued and approved by INS. 6. Payees holding a Type J (researcher/scholar) visa must present a copy of INS Form IAP-66 endorsed by the Designated School Official from their sponsoring U.S. university. This approval is employer-specific, so MSU must be named as the approved employer 7. The NRA contractor's U.S. tax identification number (U.S. social security number or U.S. Individual Tax ID Number - see discussion above at 77.11.C. and 77.Il.D.3.) must be provided. If a U.S. tax identification number has not been assigned, the contractor must apply for one and provide proof of application to Accounts Payable. If neither a U.S. TIN nor proof of application for a TIN is provided, the NRA cannot apply for treaty benefits and the university must withhold income taxes from the payment. IRS Form 8233 or Form W-8BEN (as appropriate), together with the DPV, 1-94, PSC, the ICSDD and other required documentation should be forwarded to the Accounts Payable Department, 360 Administration Building. 8. 9. The Accounts Payable Department will review and finalize IRS Form 8233 and mail it to the IRS if the NRA has applied for tax treaty benefits. 10. If the NRA IC has applied for tax treaty benefits, the exemption from withholding must be approved by the IRS before payment is made. It takes 10 business days for the IRS to respond to a request to exempt payment from withholding. 11. If the payee chooses not to avail himself/herself of available tax treaty benefits, a statement documenting this and signed by the payee must be included with the DPV ( or on the face of it). B. Foreign fiduciaries, partnerships or corporations: Foreign fiduciaries, partnerships or corporations engaged in a trade or business (and individuals providing something other than independent personal services such as rental operations - see III.A. above for individual personal services) in the United States are subject to income tax withholding. Internal Revenue Code Section 864 includes the provision of personal service in the U.S. in the definition of engaging in a trade or business in the U.S. Exemption from withholding may be accomplished by completing IRS f'orrn,:,:W~SECI, "Certificate ofForeign Person's Claim for Exemption From Withholding of Tax on Income Effectively Co~ected With the Conduct of a Trade or Business in the United States" (see Exhibit 77-1). Those NRA completing this form must file a U.S. income tax return. This exemption does not apply to compensation or reimbursement of undocumented travel expenses related to personal services performed by an individual. (Unless it relates to the conduct of a trade or business in the U.S., fiduciaries, partnerships and corporations receiving income should file IRS Form W-8BEN rather than the W-8ECI. This would .relate to receipt of royalties earned in the U.S., for example.) 1. IRS Form W-8ECI can be obtained from the Accounts Payable Department, 360 Administration Building, 353-2011 . Departments may also download a copy of the form and instructions for their use from the Controller' s Web site at http://ctlr.msu.edu/gownload/. 2. Once the contractor completes IRS Form W-8ECI, the form together with the DPV, PSC, the ICSDD and other required documentation should be forwarded to the Accounts Payable Department, 360 Administration. 3. The contractor's U.S. tax identification number (TIN) must be provided. If a U.S.TIN has not been assigned, the contractor must apply to the IRS for an employer identification number (EIN) using Form SS-4 "Application for Employer Identification Number" (see Exhibit 77-J). Application may be submitted through the mail, by fax or by phone (refer to IRS SS-4 instructions). Individuals providing something other than personal services should apply for an ITIN from the IRS using IRS Form W-7. Proof of application must be provided to Accounts Payable. If a U.S. TIN is not provided, the university must withhold income taxes from the payment. C. Foreign tax-exempt organizations: Foreign tax-exempt organizations may be exempt from withholding. To obtain the benefit of tax-exempt status, these organizations must file IRS Form W-8EXP "Certificate of Foreign Government or Other Foreign Organization for United from tax withholding by submitting IRS Form W-8ECI or W-8EXP as appropriate, (see Section 77.III.B. and 77 .III.C. above). If W-8ECI or W-8EXP are filed, exemption will not be based on tax treaty, but rather on exemption for conduct of a trade or business in the U.S. or based on their status as a tax-exempt organization. F. Recipients of rental income derived from property located in the U.S.: . 1. NRA recipients of rental income that is derived from property located in the U.S. are generally subject to income tax withholding. Withholding may be avoided if they complete IRS F,o"iiji:W~8ECI, "Certificate of Foreign Person's Claim for Exemption From Withholding of Tax on Income Effecti; eiy Connected With the Conduct ofa Trade or Business in the United States" (Exhibit 77-I) and file the form with the university. A U.S. tax ID number is required. 2. See Section 77.III.B for instructions for completing Form W-8ECI. 3. If the NRA payee does not desire to or cannot complete Form W-8ECI, he/she may complete IRS Form W: 8BE1'T to simply establish their status as a nomesident alien for tax purposes. Income taxes will be withheld from the payment. G. Payments of U.S. source income made to a U.S. agent for the benefit of a NRA payee 1. According to IRS Regulation 1.1441-l(b)(2)(ii), if the university makes a payment to a U.S. person (individual, W°"\llj OC.C1.tf re I et·h'v-t.. ..\-.;)) partnership or corporation, etc.) with actual knowledge that the U.S. person is receiving the payment as an agent of an NRA individual, partnership, or corporation, the university must treat the payment as if it were made to the foreign \ \.-person. Tui} is a ftc:1.ftlent eirel:lfflstanee .. ~ artist~ a d entertainers. This IRS Regulation mandates that withholding taxes be deducted from the payment made to the agent and that the entire payment be reported on IRS Form 1042S in the name of the agent. The taxes withheld are refundable to neither the agent, nor to the NRA. If payment must be made to an agent, making sure the contract(s) stipulate which payment(s) and the dollar amount(s) thereof are for the services of the agent, and which are to be passed through to the NRA recipient will be of benefit in avoiding an over withholding situation. Alternatively, if payment is made directly to the NRA, withholding may be avoided by the NRA submitting the appropriate IRS form noted in previous paragraphs (Form 8233, Form W-8ECSI and Form W-8EXP). 2. IV.PAYMENT PROCESSING AND REPORTING A. Uponl eceipt of the disbursement voucher, relevant IRS form and supporting documentation, Accounts Payable will review eligibility for payment and any requested treaty benefits. If the payment is determined to be exempt from withholding, a check will be issued for the gross amount of the DPV. B. If the payment is determined not to be exempt from withholding, a check will be issued for the net amount of the DPV after deducting taxes. Departmental accounts will be charged for the federal and state income tax withheld using a Journal Voucher Entry prepared by Accounts Payable. C. If the payment is determined to be subject to income tax withholding and the department would like to gross up the payment to result in an agreed-upon net payment amount to the NRA, the additional payment amount will also be reportable income and subject to income tax withholding. The formula for calculating the grossed-up amount is: ( desired net amount) divided by 0.659 (which is 1.0-0.341) or, in the case of scholarship/fellowship, 0.819 (which is 1.0-0.181). This grossed-up amount will then be subject to income tax withholding at 34.1 % (18.1 % in the case of a scholarship/fellowship). IRS Form 1042S, "Foreign Person's U.S. Source Income Subject to Withholding", is issued annually to each NRA IC, whether or not the individual has taxes withheld. Form 1042S, which is issued by the Payroll Department no later than March 15, reports all payments made during the previous calendar year. Questions about Form 1042S should be addressed to the Payroll Department, 355-5010. Payroll Department staff will refer inquiries to one of several sources for information on the underlying payments reported on the Form 1042S. D. V. PERIOD OF VALIDITY FOR IRS FORMS A. The IRS documents (8233 , W-8BEN, W-8ECI and W-8EXP) filed by the payee have defined expiration dates. IRS Form 8233 is valid starting on the date the form is signed through December 31 of the same calendar year. B. IRS Form W-8BEN submitted with a U.S . TIN is valid until a change in circumstances makes information on the form C. invalid as long as one payment is issued annually to the NRA and is reported on IRS Form 1042-S. A W-8BEN submitted without a U.S . TIN is valid starting on the date the form is signed through December 31 of the same calendar year and continuing through the last day of the third succeeding calendar year unless a change in circumstances makes any information on the form incorrect. E. D. IRS Form W-8ECI is valid starting on the date the form is signed through December 31 of the same calendar year and continuing through the last day of the third succeeding calendar year unless a change in circumstances makes any information on the form incorrect. IRS Form W-8EXP submitted with a U.S. TIN is valid until a change in circumstances makes information on the form invalid as long as MSU issues one payment annually to the NRA and the payment is reported on IRS Form 1042-S. AW- 8EXP submitted without a U.S. TIN is valid starting on the date the form is signed through December 31 of the same calendar year and continuing through the last day of the third succeeding calendar year unless a change in circumstances makes any information on the form incorrect. If the W-8EXP (without a U.S. TIN) has been submitted by an integral part 1. IRS Form W-8EXP can be obtained from the Accounts Payable Department, 360 Administration Building, 353-2011. Departments may also download a copy of the form and instructions for their use from the Controller's Web site at liffiI:7lcti,r:mstj;ea4?9§fu)1oac;l!. 2. N~te"thit certa1;;-c;tego ; ies of declaration of tax-exempt entity status require written supporting statements from either 0 the U.S. IRS or a U.S. attorney. 3. Once the contractor completes IRS Form W-8EXP, the form together with the DPV, PSC, the ICSDD and other required documentation should be forwarded to the Accounts Payable Department, 360 Administration. 4. The contractor's U.S. employer ID number (EIN) must be provided. If a U.S. EIN has not been assigned, the contractor must apply to the IRS for one using Form SS-4 "Application for Employer Identification Number". Proof of application must be provided to Accounts Payable. If a U.S. EIN is not provided, the university must withhold income taxes from the payment. If a foreign tax-exempt organization is not applying for exemption from withholding, they must complete IRS Form W-8BEN. See item E.1. through E.3. below. 5. D. Artists, athletes and entertainers: 1. Payments to NRA artists, athletes and entertainers can be problematic. This is a sub-category of independent personal services. Typically, payments to artists, athletes and performers are subject to 34.1 % withholding. 2. This category of NRA can be an individual, partnership or corporation, or a tax-exempt organization. As a general rule, processing payment to the NRA will be determined by the nature of the entity (e.g., individual, corporation, non profit entity). See previous paragraphs for processing requirements of each category. 3. For individuals who may be eligible for reduced withholding due to a tax treaty, if the tax treaty with their country of residence contains a separate article that applies to "artists, athletes and entertainers", that article takes precedence over the "independent personal services" article. ~he eettsti'ttittts ef ta0 "artists" artiele arc exceeded, ttte ttl'l'lieaat FRay fall eaek tg tlie provisioJ:J~ ofta0 "ittder,endcnt personal set. iees" ttrtiele fer relief ifa, ttilltl,k. 4. For individual performers not eligible for tax treaty benefits, or for other entities, a reduced rate of federal withholding may be negotiated under an agreement prepared in accordance with IRS central withholding agreement procedure (see p~ifUt'i~r!u) as stipulated in IRS Publication 515 "Withholding of Tax on Nonresident Aliens and Foreign Entities". Thi;"';g;~;;;ent will incorporate all United States performance engagements by the NRA for withholding purposes. The agreement must be signed by the Commissioner of the IRS, all NRA(s) covered by the agreement, and by each withholding agent (including Michigan State University). If payment for the benefit of a NRA artist, athlete or entertainer is issued to a U.S. agent, withholding taxes must be deducted. See Section 77.III.G. 5. E. Recipients of scholarships, fellowships or royalty income: Scholarships and fellowships for non-degree candidates engaged in study, training or research are subject to income tax withholding at a rate of 18.1% (14% Federal and 4.1% State). Royalties are subject to 34.1% income tax withholding. Recipients of scholarships or fellowships (not enrolled in a degree program engaged in study, training or research) or royalty income may be exempt from withholding. Fiduciaries, partnerships and corporations may also be eligible for reduced withholding on royalties. A listing of countries whose residents may be eligible for limited exemption of withholding from royalty income under tax treaty is provided (see ;mmi~!/~';~;ij). The actual treaty may not exempt any or all of the royalty income you anticipate paying to the NRA. In orde~ to lea"rri the details of the tax treaty provisions for a particular country, please call Accounts Payable at 353-2011. If the country of residence for your NRA is not listed on Exhibit 77-F, the payment will be subject to income tax withholding. Amounts of per diem for subsistence paid by the U.S. Government Agency for International Development (USAID) to NRA engaged in a training program in the U.S. are exempt from withholding even though the amounts may be subject to income taxation. Confirmation ofUSAID as the source of the scholarship must be documented by award correspondence. The NRA recipient of a scholarship or fellowship award (including a USAID stipend) or royalty income must complete IRS ~9B!L~ -;§:§:PN "Certificate of Foreign Status of Beneficial Owner for United States Withholding" whether or not they apply for tax treaty benefits. 1. IRS Form W-8BEN can be obtained from the Accounts Payable Department, 360 Administration Building, 353-2011. Departments may also download a copy of the form and instructions for their use from the Controller's Web site at htq,Y(ctlf.tnSu'.e(iuldofu)l6ad/. 2. Once the redpient completes IRS Form W-8BEN, the form together with the DPV, and other required documentation (including Form 1-94 for scholarship/fellowship recipients) should be forwarded to the Accounts Payable Department, 360 Administration. 3. The income recipient's U.S. tax identification number (TIN) must be provided. If a U.S. TIN has not been assigned to an individual, the income recipient must apply to the IRS for an U.S. Individual Tax ID Number (ITIN) using an IRS F§l"lll. W •7- If a U.S. ITIN is not provided, the university must withhold income taxes from the payment. Fiduciaries, partnerships and corporations and tax-exempt organizations must provide a U.S. Employer ID number to be eligible for any treaty benefits available providing for reduced withholding. These organizations may also request exemption A. Where can I obtain guidance at MSU to ensure that I make the proper arrangements for a future visit of an international guest? The MSU Office of International Students and Scholars (OISS) is the preferred source of counseling to properly structure an invitation to an international guest. The OISS Immigration Specialist may be reached by phone at 353-1720. Their Internet address is htt_p://www.isp.msu.edu/oiss/index/html. OISS will advise you on the visa requirements for your international guest considering the circumstances and purpose of the visit you are contemplating. If payment to the international guest is anticipated ( or even if there is the possibility of payment), Accounts Payable should be consulted to obtain guidance on the payment documentation required to satisfy INS and IRS rules, and to avoid misunderstandings relating to the payment. Accounts Payable may be reached by phone at 353-2011. B. Are payments to all international visitors handled the same way? No. International visitors have both an immigration status governed by the U.S . Immigration and Naturalization Service (INS), and a tax status governed by the U.S. Internal Revenue Service (IRS). INS status is generally either "non-immigrant" or "immigrant". A "non-immigrant" is an international visitor to whom the INS has given permission to reside temporarily in the United States. Generally, a non-immigrant has represented to the INS that he/she is a permanent resident of a foreign country to which he/she fully intends to return after a temporary stay in the U.S. The IRS generally refers to these individuals as "nonresident aliens" (NRA). In order to enter the U.S. a NRA must have a visa issued by the U.S. Department of State giving him/her certain limited permissions while in the U.S. Some visas permit limited payment to the NRA. (Visitors from Canada may not be issued a visa prior to visiting the U.S., though they will need a validated INS Form 1-94 if payment is to be issued to them. See FAQ item D. below.) Payments to qualified NRA are generally subject to U.S. income tax withholding unless the visitor is entitled to treaty benefits or other exemption. \ An immigrant is an alien who has the right to reside permanently in the United States. Eventually, these aliens can earn a "green card" (INS Form 1-551 ). A green card is tangible proof of immigrant status. The Internal Revenue Service (IRS) refers to these individuals as "resident-aliens". Resident aliens do not need a visa and are paid in the same manner as U.S. citizens. C. What is a visa? A visa stamp is written evidence of permission to enter the U.S. granted by the U.S. Department of State to a non-immigrant. Typically, the visa status is recorded in the form of a stamp on one of the pages of the individual's passport. Visa status' come in different categories and give the non immigrant different permissions and limits while they are temporarily in the U.S. D. What is an INS Form 1-94 "Arrival-Departure Record"? A Form 1-94 "Arrival-Departure Record" is created by the INS when the traveler is inspected upon arrival in the United States. The inspector endorses the INS Form 1-94 with the date, place of arrival, the "class of admission" (which corresponds to the visa class), the length of time the traveler may remain in the United States, and any special conditions which may apply to the visit. A validated Form 1-94 must be presented with any Direct Payment voucher to document the NRA visa status, date of entry and authorized length of stay. A visitor from Canada who was not issued a Form 1-94 upon inspection at the border can complete a "Substitute Form 1-94 For Use By Certain B 1 Or B2 Visitors From Canada". See Manual of Business Procedures Section 77. E. What is a U.S . tax identification number? A U.S. tax identification number is required to provide a unique identifier to an individual who is required to report income and/or pay taxes to the U.S . federal government. In order for a NRA to qualify for exemption from income tax withholding, their U.S. tax identification number must be provided with their application for exemption. A U.S . tax identification number can take one of several forms: ITIN: U.S. Individual Tax Identification Number. This number is issued to NRA individuals who need a tax identification number, but did not enter the U.S. under a visa status that authorizes employment. For example an For J visa may authorize employment. AB visa does not authorize employment. An individual may obtain an ITIN by applying to the U.S. Internal Revenue Service using IRS Form W-7. SSN: U.S. Social Security Number. This number is issued to NRA individuals who need a tax identification number, and who entered the U.S. under a visa status that does authorize employment. An individual may obtain a SSN by applying to the U.S. Social Security Administration using SSA Form SS-5 (or Form SS-5-FS if applying from the NRA country of residence). EIN: U.S . Employer Identification Number. This number is issued to taxpayers that employ others and must report payroll taxes. It is also issued to entities other than individuals (such as partnerships and corporations). An NRA entity may obtain a U.S. EIN by applying to the U.S. Internal Revenue Service using IRS Form SS-4. F. Can a nonresident alien avoid U.S. income tax withholding on taxable payments received from MSU? In most cases, MSU is required to withhold income taxes from payments made to nonresident aliens for income earned in the United States. Those NRA who qualify under a number of different circumstances may avoid income tax withholding. The NRA must provide MSU with his/her U.S. tax identification number when completing the appropriate form. Independent personal services: The NRA may be eligible for exemption from withholding if they qualify for the benefits of a tax treaty between his/her country of residence and the U.S. A tax treaty is an agreement between the U.S. and another nation that documents a protocol for each country (home country and host country) to follow in taxing one another's residents when that resident earns income in the "host" country. IRS Form 8233 must be completed. Services performed by a NRA corporation, partnership or fiduciary: The NRA entity must complete IRS Form W-8ECI. Services performed by a NRA tax-exempt organization: The NRA organization must complete IRS Form W-8EXP. Scholarships or fellowships to non-enrolled student: The NRA may be eligible for exemption from withholding if he/she qualifies for the benefits of a tax treaty between his/her country of residence and the U.S. IRS Form W-8BEN must be completed. Royalties earned in the U.S. : If an individual, the NRA may be eligible for exemption from withholding if he/she qualifies for the benefits of a tax treaty between his/her country of residence and the U.S . IRS Form W-8BEN must be completed. If the income was earned in the pursuit ofa trade or business in the U.S ., a corporation, partnership or fiduciary may be exempt upon completing IRS Form W-8ECI. A NRA tax-exempt organization may be exempt upon completing IRS Form W-8EXP. Rental income: If the rental income was attributable to engaging in a trade or business in the U.S., the income may be exempt from withholding if the recipient completes IRS Form W-8ECI. G. Are Native Americans who live outside the U.S. considered to be NRA? Yes. While Native Americans are defined as NRA if they reside outside the U.S ., they require neither a visa, nor an INS Form 1-94 prior to receiving payment for services rendered, etc. To avoid withholding tax, however, a Native American NRA must provide a U.S. tax identification number and complete the necessary form (as described above) . H. My NRA consultant tells me that MSU is his/her only client that requires this information. Is this true? No. While some employers/payers are either unaware of the requirements, or they choose not to confo1m to them, all U.S. entities are required to comply to the relevant INS and IRS regulations. I. My NRA consultant is subject to income tax withholding. We don ' t want to cause hard feelings with the NRA by issuing a check that is netted down by the withholding taxes. How can we make a payment that will result in him/her receiving a net check in the amount we originally agreed to pay? If the necessary communication and preparations have not occurred prior to processing a disbursement voucher to pay a NRA consultant, the issue of withholding taxes can be a sensitive issue. To avoid withholding, the NRA must complete the appropriate IRS form. Either an IRS Form 8233 , W-8BEN, W-8ECI or W-8EXP must be completed and filed. If any of these IRS forms are submitted, the NRA must provide his/her U.S. tax identification number to qualify for exemption. In some cases the NRA will not qualify for exemption from withholding, or he/she may refuse to apply. If the MSU department wants to pay the withholding taxes for their NRA consultant, the department must gross-up the payment. The additional payment amount will also be reportable income and subject to income tax withholding. The formula for calculating the grossed-up amount is: ( desired net amount) divided by 0.659 (which is 1.0- 0.341) or, in the case of scholarship/fellowship, 0.819 (which is 1.0 - 0.181 ). This grossed-up amount will then be subject to income tax withholding at 34 .1 % (18 .1% in the case ofa scholarship/fellowship) . Any underlying contract with the NRA should be amended and signed by the original contract approvers, to reflect the additional compensation paid. Upon filing his/her IRS 1040NR annual income tax return, the NRA may be able to obtain a refund of all or a portion of this additional withholding. .. < Source of Income .:+ . .. .,, Rendered By Paid To · Summary of Require~~;~!s f~r~•=,~1'1)ents to Nonre:id~rjJJ:Aliens . + • . . mr , . . . ... . • . Income Type · '\+rn Restrictions H 0: .... Iii > ····• Tax W/H Rate . tut . ..... .. /"; Required Personal Services An individual Visitor for business Personal Services An individual Visitor for pleasure or tourist Personal Services An individual Student status Personal Services An individual Personal Services Personal Services Exchange visitor for teaching or research A partnership, corporation, or fiduciary (NOT AN INDIVIDUAL) A tax-exempt organization (NOT AN INDIVIDUAL) Visa Type B1, WB1 orWB Visitor for Business B2, WB2 or WT Visitor for Tourism F1 Student J1 Exchange Visitor None None Honorarium Travel reimbursement Honorarium Travel reimbursement Contractual Fee and Honorarium Travel reimbursement Contractual Fee and Honorarium Travel reimbursement Contractual Fee and Honorarium Contractual Fee and Honorarium Services of An Artist, Athlete or Entertainer An individual Contractual Fee and Honorarium B1, WB1 orWB Visitor for Business Limited by INS. May be subject to income tax withholding. Must provide US SSN or ITIN. Documentation is required . Limited by INS. May be subject to income tax withholding. Must provide US SSN or ITIN. Documentation is required Limited by INS. May be subject to income tax withholding. Must provide US SSN or ITIN. Documentation is required. Limited by INS. May be subject to income tax withholding. Must provide US SSN or ITIN . Documentation required 34.1% None 34 .1% None 34 .1% None 34.1% None Does not apply to personal services rendered by an individual for their account. None Must provide US EIN . Does not apply to personal services rendered by an individual for their account. None Must provide US EIN . Validated INS 1-94. IRS 8233 or W-8BEN . MSU B1/B2 Certification. MSU PSC and ICSDD . Validated INS 1-94. IRS 8233 or W-8BEN . MSU B1/B2 Certification . MSU PSC and ICSDD . Validated INS 1-94. INS 1-20. IRS 8233 or W-8BEN . MSU PSC and ICSDD . Validated INS 1-94. INS IAP-66. IRS 8233 or W-8BEN . MSU PSC and ICSDD. IRS W-8ECI. MSU PSC and ICSDD . IRS W-8EXP. MSU PSC and ICSDD . Limited by INS. May be subject to income tax withholding. Must provide US SSN or ITIN . Validated INS 1-94. IRS 8233 or W-8BEN . 34 .1% MS U B 1 /B2 Certification . MSU PSC or performer contract approved by MSU contract agent. Travel reimbursement Documentation required. None / - - - - - - -~ - - - - - - - - - - - - - - B. ~8~~~~·s soc1AL SECURITY . ID D D-D D-D DD D A. FATHER'S NAME--+ First Full Middle Name Last 9> - - - - - - - -~ - - -~ - - - - - - - - - ID D D-D D-D DD D B. ~'t~J~s soc1AL SECURITY Has the applicant or anyone acting on his/her behalf ever filed for or received a Social Security number card before? 0 Yes (If "yes," answer questions 11-13.) 0 No (If "no," go on to question 14.) Enter the Social Security number previou_s_ly- ID D D-D D-D D D D D Don't Know (If "don't know," go on to question 14.) 10 11 First Middle Name Last assigned to the person listed in item 1. Enter the name shown on the most 1 2 recent Social Security card issued for • the person listed in item 1. Enter any different date of birth if used on an earlier application for a ca rd . - - - - - - - • 15 DAYTIME TODAY'S DATE Month, Day, Year I 13 14 PHONE NUMBER Month, Day, Year ( ) Area Code Number 16 YOUR SIGNATURE DELIBERATELY FURNISHING (OR CAUSING TO BE FURNISHED) FALSE INFORMATION ON THIS APPLICATION IS A CRIME PUNISHABLE BY FINE OR IMPRISONMENT, OR BOTH. YOUR RELATIONSHIP TO THE PERSON IN ITEM 1 IS: o Self o Natural Or o Legal o Other (Specify) ~ 17 Adoptive Parent Guardian DO NOT WRITE BELOW THIS LINE (FOR SSA USE ONLY) I DOC EVC NPN PBC EVIDENCE SUBMITTED CAN NWR I DNR I UNIT SIGNATURE AND TITLE OF EMPLOYEE(S) REVIEW ING EVIDENCE AND/OR CONDUCTING INTERVIEW Form SS-5-FS (3-2001) EF (7-2001) Destroy Prior Editions Page 5 DCL DATE DATE Michigan State University Certification for International Visitors Entering the U.S. With B1/WB1 or B2/WB2 Visa Status The American Competitive and Workplace Improvement Act (ACWIA) authorizes payment of honorarium and travel expense reimbursement to nonresident aliens entering the United States with B1/WB1 (Visitor for Business) or B2/WB2 (Visitor for Pleasure-Tourist) visa status under limited circumstances. This form must be completed and its conditions satisfied in full as one part of establishing authorization to pay a nonresident alien an honorarium or reimbursement of undocumented travel expenses. All items must be answered in the affirmative to qualify the nonresident alien for such payment. The Immigration and Naturalization Service may promulgate more specific rules in the future. The conditions listed on this form are based on Section 212 (8 U.S.C. 1182). Qualifying Criteria (Check the column at the right if the statement is certified as being true.) '1 The payment to the international visitor is an honorarium or reimbursement for undocumented travel expenses. The payment relates to service that the international visitor performed for Michigan State University that is considered to be usual academic activity (teaching, research, or public service). The international visitor was at Michigan State University for no more than nine days. The international visitor has received similar payment from no more than five institutions or organizations during the previous six-month period. If one or more of the four criteria are not true, the international visitor may not be paid. If all four qualifying criteria are true, the international visitor has satisfied the U.S. Immigration and Naturalization Service requirements for receipt of honorarium or reimbursement of undocumented travel expenses. The international visitor and an authorized departmental signer should sign in the spaces below. This completed, signed and dated form should accompany the direct payment voucher and other required documentation when requesting a check. International Visitor Printed Name International Visitor Signature/Date Authorized Departmental Signature/Date W-7 \'..,\,sl"l~mr:-1-t:,;ti,,r..:..ry 1r,t,·n~,,1 .;~<"•'es ooty. Do not submit this for rn if you IUNf:\ ot sro r..'ligib}o w obtmh, .,i US. saciaJ sccurlty m.t'mber {SSl\:J'}. • F<,~ct.~pr of'Rn .t'RS ,ior.1ividu:.d ta.~ru1ye.r kJ.timffu::a:tion nurnhi.Y {ITHW crnN.es no infnrer,co rtt!)i':ln:t!.na yovr itumiqmtion std.vs or your right w 1r'VOtk in th~.': Un.ilt:,yJ swros. • ReccJJJ.t o.f em fn'!V does not make yuu ch'.qiUie ro c!u.im the r1,:1rru.}-d inr:: lWf lrnx.11;,;i.l ~,~ru-0 ::i1.."! •1>~1i ll ~ ·1:-:;,'.l:"-11)' Who Should Use This Form? Note~ ror do6ndions of tnrrns ueneM on this trum Resident of a Treaty Country An r)!:ien individual may claim to be a residen t of a treaty co0ntry if he or she qualities ai a res id-Ont Qf that coufltry under the t-Dmt5 .ot 'tho rns idonc.y <:lrride Gi 1he tax. treaty bet\veBn !he- United St.atos nm! that -:::m111try. See Nonrcsldunt Alien ab-ove. 8233 Form (Rev. December 2001) Department of the Treasury Internal Revenue Service Exemption From Withholding on Compensation for Independent (and Certain Dependent) Personal Services of a Nonresident Alien Individual 0MB No. 1545-0795 ~ See separate instructions. Who Should Use This Form? IF you are a nonresident alien individual who is receiving . .. THEN, if you are the beneficial owner of that incom e, use this form to claim ... Note: For definitions of terms used in this section and detailed instructions on required withholding forms for each type of income, see Definitions on pages 1 through 3 of the instructions. DO NOT Use This Form ... Compensation for independent personal services performed in the United States Compensation for dependent personal services performed in the United States A tax treaty withholding exemption for part or all of that compensation and/or to claim the daily personal exemption amount. ' ..... _ A tax treaty withholding exemption for part or all of that compensation. Note: Do not use Form 8233 to claim the daily '-personal exemption amount. Noncompensatory scholarship or fell owship income and personal services income from the same withholding agent A tax treaty withholding exemption for part or all of both types of income. IF you are a beneficial owner who is ... INSTEAD, use .. . Receiving compensation for dependent personal services performed in the United States and you are not claiming a tax treaty withholding exemption for that compensation Receiving noncompensatory scholarship or fellowship income and you are not receiving any personal services income from the same withholding agent Claiming on ly foreign status or treaty benefits with respect to income that is not compensation for personal services Form W-4 Form W-8BEN or, if elected by the withholding agent, Form W-4 for the noncompensatory scho larship or fellowship income Form W-8BEN This exemption is applicable for compensation for ca lendar year _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ , or other tax year beginning _______________ __________ . ______ .. and ending _____ _______________________ . Identification of Beneficial Owner (See instructions .) 1 Nam e of individua l who is the beneficia l owner 2 U.S. taxpayer identifying number 3 Foreign tax identifying number. if any (optiona l) 4 Permanent residence address (street. apt. or suite no .. or rural route). Do not use a P.O. box. City or town. state or province. Include postal code where appropriate. Country (do not abbreviate) 5 Address in the United States (street. apt. or suite no .. or rural route). Do not use a P.O. box . City or town, state, and ZIP code Note: Citizens of Canada or Mexico are not required to complete lines la and lb. 6 U.S. visa type 7a Country issuing passport 7b Passport number 8 Date of entry into the United States 9a Current nonimmigrant sta tus 9b Date your current nonimmigrant status expires 10 If you are a foreign student, trainee, professor/teacher, or researcher, check this box Caution: See the line 10 instructions for the required additional statement you must attach. _,..o For Paperwork Reduction Act Notice, see separate instructions. Cat. No. 62292K Form 8233 (Rev. 12-2001) Form 8233 (Rev. 12-2001) i:&111• Claim for Tax Treaty Withholding Exemption and/or Personal Exemption Amount 11 Compensation for independent (and certain dependent) personal services: Page 2 a Description of persona l services you are providing ------------------------------------------------------------------------------------- b Total compensation you expect to be paid for these services in this calendar or tax year $ ------ -- - - -- - -- - - -- ---- - ------ ------ 12 If compensation is exempt from withholding based on a tax treaty benefit, provide : a Tax treaty and treaty article on wH ich you are basing exemption from withholding ---------------- ------- ------- ---------- ------- b Total compensation li sted on line 11b above that is exempt from tax under this treaty $ -------------- - - - --- ---- -------- - -- - -- c Country of permanent residence Note: Do not complete lines 7 3a through 7 3c unless you also received compensation for personal services from the same withholding agent. 13 Noncompensatory scholarship or fellowship income: a Amount $ ----------- - - - ----------- -- b Tax treaty and treaty article on which you are ba sing exemption from withholding c Total income li sted on lin e 13a above that is exempt from tax und er this treaty $ 14 Sufficient facts to justify the exemption from withholding cla im ed on line 12 and/or line 13 (see instructions) ------------------· Note: Lines 7 5 throu h 7 8 are to be com feted on/ 15 Number of personal exemptions c laimed ..,_ 16 How many days will you perform services in the United States durin this tax ear? ..,_ 17 Daily personal exemption amount claimed (see instructions) ..,_ Total ersonal exem tion amount claimed. Multi I line 16 b line 17 ..,_ Certification Under pena lties of perjury, I declare that I have examined the information on this form and to the best of my kn owledge and belief it is true, correct. and complete. I further certify und er penalties of perjury that: • I am the benefi cial owner (or am authorized to sign for the benefici al owner) of all the inco me to which this form relates. • The benefi cia l owner is not a U.S. person. • The beneficial owner is a resident of the treaty country li sted on line 12a and/or 13b above within the mea ning of the inco me tax treaty between the United States and that country. • The beneficial owner is not a former citizen or long-term resident of the United States subject to section 877 (relating to certain acts of expatriation) or, if subject to section 877, the beneficia l owner is nevertheless entitled to trea ty benefits with respect to the amounts received. Furthermore, I authorize this form to be provided to any withholding agent that has control, receipt, or custody of the income of wh ich I am the benefi cial owner or any withholding agent that can disburse or make payments of the income of which I am the beneficial owner. Sign Here Name Withhold in Date Employer identification number Address (number and street) (Include apt. or suite no. or P.O. box, if applicable.) City, state , and ZIP code Telephone number Under pena lties of perjury, I certify that I have exa mined this form and any accompa nying statements, that I am satisfied that an exemption from withholding is warranted, and that I do not know or have reason to know that the nonresident alien individual is not entitled to the exemption or that the nonresident alien's eligibility for the exemption ca nnot be read ily determined. Signature of withholding agent ..,_ Date..,_ Instructions for Form 8233 (Rev. December 2001) Exemption From Withholding on Compensation for Independent ( and Certain Dependent} Personal Services of a Nonresident Alien Individual Section references are to the Internal Revenue Code unless otherwise noted. Department of the Treasury Internal Revenue Service Note: For definitions of terms used throughout these instructions, see Definitions starting below. m If you are a "resident of a treaty country," you must know the terms of the tax treaty between the United States and the treaty country to properly complete Form 8233. You may download the complete text of most U.S. tax treaties at www.irs.gov/prodl ind_infoltreaties.html. Technical explanations for many of those treaties are also available at that site. Also, see Pub. 901, U.S. Tax Treaties, for a quick reference guide to the provisions of U.S. tax treaties. Note: You can get any of the forms or publications referred to in these instructions by calling 1-800-TAX-FORM (1-800-829-3676) or by downloading them from the IRS Web Site at www.irs.gov. General Instructions A Change To Note Form 8233 may now be used to claim a tax treaty withholding exemption for noncompensatory scholarship or fellowship income. However, you can do this only if you are also using this form to claim a tax treaty withholding exemption for compensation for personal services (including compensatory scholarship or fellowship income) and both types of income are received from the same withholding agent. Purpose of Form In general, section 1441 requires 30% Federal income tax withholding on compensation for independent personal services (defined on this page). Sections 1441, 3401, and 3402 require withholding, sometimes at 30% and sometimes at graduated rates, on compensation for dependent personal services (defined on page 2) . However, some payments may be exempt from withholding because of a tax treaty or the personal exemption amount. Complete and give Form 8233 to your withholding agent if some or all of your compensation is exempt from withholding. Note: Do not use Form 8233 if you have an office in the United States regularly available to you for performing personal services. Giving Form 8233 to the Withholding Agent You must complete Form 8233: • For each tax year (be sure to specify the tax year in the space provided above Part I of the form), • For each withholding agent, and • For each type of income. However, you may use one Form 8233 to claim a tax treaty withholding exemption for both compensation for personal services (including compensatory scholarship or fellowship income) and noncompensatory scholarship or fellowship income received from the same withholding agent. Example. A nonresident alien is primarily present in the United States as a professor, but also is occasionally invited to lecture at another educational institution . These lectures are not connected with his teaching obligations but are in the nature of self-employment. For each tax year, the professor must complete two Forms 8233 and give one to each withholding agent to claim tax treaty benefits on the separate items of income. Definitions Nonresident Alien If you are an alien individual (that is, an individual who is not a U.S. citizen), specific rules apply to determine if you are a resident alien or a nonresident alien for tax purposes. Generally, you are a resident alien if you meet either the "green card test" or the "substantial presence test" for the calendar year. Any person not meeting either test is generally a nonresident alien. Additionally, an alien individual who qualifies as a "resident of a treaty country" (defined below) or a resident of Puerto Rico, Guam, the Commonwealth of the Northern Mariana Islands, the U.S. Virgin Islands, or American Samoa is a nonresident alien individual. For more information on the tests used to determine resident alien or nonresident alien status, see Pub. 519, U.S . Tax Guide for Aliens. Note: Even though a nonresident alien individual married to a U.S. citizen or resident alien may choose to be treated as a resident alien for certain purposes (for example, filing a joint income tax return) , such individual is still treated as a nonresident alien for withholding tax purposes on all income except wages. U.S. Person For purposes of this form, a U.S. person is a U.S. citizen or resident alien. Cat. No. 226638 Tax Treaty Withholding Exemption This term refers to an exemption from withholding permitted by IRS regulations under section 1441 that is based on a tax treaty benefit. See Resident of a Treaty Country below for requirements for claiming a tax treaty benefit on this form. Resident of a Treaty Country An alien individual may claim to be a resident of a treaty country if he or she qualifies as a resident of that country under the terms of the residency article of the tax treaty between the United States and that country. See Nonresident Alien above. A nonresident alien may claim a tax treaty benefit on this form only if that individual is the beneficial owner of the income and meets the residency requirement and all other requirements for benefits under the terms of the tax treaty . See the instructions for line 4 on page 3 for additional information for determining residence for purposes of claiming a tax treaty withholding exemption on this form . Compensation for Independent Personal Services Independent personal services are services performed as an independent contractor in the United States by a nonresident alien who is self-employed rather than an employee. Compensation for such services includes payments for contract labor; payments for professional services, such as fees to an attorney, physician, or accountant, if the payments are made directly to the person performing the services; consulting fees; honoraria paid to visiting professors, teachers , researchers, scientists, and prominent speakers; and generally, payments for performances by public entertainers. Public entertainers. Special restrictions on exemption from or reduction of withholding apply to nonresident alien public entertainers (such as actors , musicians, artists, and athletes). Generally, such individuals are subject to 30% withholding from gross income paid for personal services performed unless a reduced rate of withholding under a withholding agreement prepared in accordance with Rev. Proc. 89-47, 1989-2 C.B. 598, has been approved by the IRS. In addition, many tax treaties contain separate articles that apply to artists, athletes, and entertainers . If present, these articles take precedence over the "independent personal services" and "dependent personal services" articles of the treaties . Required Withholding Form For compensation you receive for independent personal services, complete Form 8233 to claim a tax treaty withholding exemption for part or all of that income and/or to claim the daily personal exemption amount. Compensation for Dependent Personal Services Dependent personal services are services performed as an employee in the United States by a nonresident alien . Dependent personal services include compensatory scholarship or fellowship income (see definition below) . Compensation for such services includes payments for wages, salaries, fees , bonuses, commissions, and similar designations for amounts paid to an employee . Required Withholding Form(s) Complete Form 8233 for compensation you receive for dependent personal services only if you are claiming a tax treaty withholding exemption for part or all of that income. Do not use Form 8233 to claim the daily personal exemption amount. Use Form 8233 only to claim a tax treaty withholding exemption for any part of your compensation that is exempt from withholding . For compensation for which you are not claiming a tax treaty withholding exemption, use Form W-4, Employee's Withholding Allowance Certificate. Completing Form W-4. To avoid underwithholding on compensation for dependent personal services for which you are not claiming a tax treaty withholding exemption, you should complete Form W-4 as follows : Social security number. You are required to enter a social security number (SSN) on line 2 of Form W-4. If you do not have an SSN , you must apply for one on Form SS-5, Application for a Social Security Card . You may get Form SS-5 from a Social Security Administration (SSA) Office. Fill in Form SS-5 and return it to the SSA. m You cannot enter an individual taxpayer identification number (/TIN) on line 2 of Form W-4. Withholding status. Do not check the "Married" box on line 3 of Form W-4. Check either the "Single" box or the "Married, but withhold at higher Single rate" box. Withholding allowances. You should generally claim one withholding allowance on line 5 of Form W-4. However, if you are a resident of Canada, Mexico, Japan, or the Republic of (South) Korea ; a student from India; or a U.S. national; you may be able to claim additional withholding allowances for your spouse and children. See Pub. 519 for more information. If you are completing Form W-4 for more than one withholding agent (for example, you have more than one employer) , figure the total number of allowances you are entitled to claim (see the previous paragraph) and claim no more than that amount on all Forms W-4 combined . Your withholding usually will be most accurate when all allowances are claimed on the Form W-4 for the highest-paying job and zero allowances are claimed on the others . Additional withholding amount. Enter the amount from the table below on line 6 of Form W-4 . Payroll Period Amount Weekly . . . .. . ... . .. .... . $ 7.60 Biweekly . . . . . . . ... ... . . . Semimonthly ............ . Monthly ... ...... ... . ... . 15.30 16.60 33.10 Quarterly . . . . . . .... . . .. . . 99.40 Semiannually . .... ..... . . 198.80 Annually .. . .... . . . . .... . 397.50 Daily* . ........ . ... .... . 1.50 * Amount to be used for each day of a payroll period not described above. Exemption from withholding. Do not claim that you are exempt from withholding on line 7 of Form W-4 (even if you meet both of the conditions listed on that line) . Compensatory Scholarship or Fellowship Income In general. scholarship or fellowship income is compensatory to the extent it represents payment for past, present, or future services (for example, teaching, research , etc.) performed by a nonresident alien as an employee and the performance of those services is a condition for receiving the scholarship or fellowship (or tuition reduction). Example. XYZ University awards a scholarship to N. a nonresident alien student. The only condition of the scholarship is that N attends classes and maintains a minimum level of academic performance. The scholarship income is not compensatory because N is not required to perform services as an employee as a condition for receiving the scholarship . Required Withholding Form(s) Compensatory scholarship or fellowship income is considered to be dependent personal services income. Therefore, complete Form 8233 for this income only if you are claiming a tax treaty withholding exemption for part or all of that income. Do not complete Form 8233 to claim the daily personal exemption amount. Use Form 8233 only to claim a tax treaty withholding exemption for any part of your compensatory scholarship or fellowship income that is exempt from withholding. For any part of such income for which you are not claiming a tax treaty withholding exemption , use Form W-4. See Completing Form W-4 above . -2- Noncompensatory Scholarship or Fellowship Income . Noncompensatory scholarship or fellowship income is scholarship or fellowship income that is not compensatory scholarship or fellowship income {defined above) . The taxable portion of noncompensatory scholarship or fellowship income (defined below) paid to a nonresident alien is generally subject to withholding at a rate of 30% (the rate is generally 14% in the case of a nonresident alien temporarily present in the United States under an "F," "J," "M," or "Q" visa) . Taxable portion of noncompensatory scholarship or fellowship income. If you were a degree candidate, the amount of this type of income that you used for expenses other than tuition and course-related expenses (fees, books, supplies, and equipment) is generally taxable. For example, amounts used for room , board, and travel are generally taxable . If you were not a degree candidate, the full amount of the scholarship or fellowship income is generally taxable . Required Withholding Form You should generally complete Form W-8BEN, Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding , to claim a tax treaty withholding exemption for this type of income. No Form W-8BEN is required unless a treaty benefit is being claimed. Exception. If you are receiving both compensation for personal services (including compensatory scholarship or fellowship income) and noncompensatory scholarship or fellowship income from the same withholding agent, you may use one Form 8233 for both types of income. However, this exception applies only if you are claiming a tax treaty withholding exemption for both types of income. Alternate withholding election. A withholding agent may elect to withhold on the taxable portion of noncompensatory scholarship or fellowship income of a nonresident alien temporarily present in the United States under an "F," "J," "M," or "Q" visa as if it were compensatory scholarship or fellowship income (provided the nonresident alien is not claiming treaty benefits with respect to that income). The withholding agent makes this election by requesting that the nonresident alien complete Form W-4 using the instructions in Rev. Proc. 88-24 , 1988-1 C.B. 800 . Withholding Agent Any person , U.S. or foreign, that has control , receipt, or custody of an amount subject to withholding or who can disburse or make payments of an amount subject to withholding is a withholding agent. The withholding agent may be an individual , corporation , partnership , trust, association, or any other entity, including {but not limited to) any foreign intermediary, foreign partnership, and U.S. branches of certain foreign banks and insurance companies . Generally, the person who pays (or causes to be paid) the amount subject to withholding to the nonresident alien individual (or to his or her agent) must withhold . Beneficial Owner For payments other than those for which a reduced rate of withholding is claimed under an income tax treaty , the beneficial owner of income is generally the person who is required under U.S. tax principles to include the income in gross income on a tax return. A person is not a beneficial owner of income, however, to the extent that person is receiving the income as a nominee, agent, or custodian, or to the extent the person is a conduit whose participation in a transaction is disregarded. In the case of amounts paid that do not constitute income, beneficial ownership is determined as if the payment were income. Avoid Common Errors To ensure that your Form 8233 is promptly accepted, be sure that you : • Answer all applicable questions completely. • Specify the tax year for which this form will be effective in the space provided above Part I of the form . • Enter your complete name, addresses, and identifying number(s) in Part I. • Have attached the required statement described in the line 10 instructions if you are a foreign student, trainee, professor/ teacher, or researcher. • Are not trying to claim tax treaty benefits for a country with which the United States does not have a ratified tax treaty. • Are not trying to claim tax treaty benefits that do not exist in your treaty. • Complete lines 11 through 14 in sufficient detail to allow the IRS to determine the tax treaty benefit you are claiming . • Claim the proper number of personal exemptions on line 15. • Complete the required certification in Part Ill. Specific Instructions Part I Line 2 You are required to furnish a U.S. ta xpayer identifying number on this form. You are generally required to enter your social security number (SSN) on line 2. To apply for an SSN, get Form SS-5 from a Social Security Administration (SSA) office . Fill in Form SS-5 and return it to the SSA. If you do not have an SSN and are not eligible to get one, you must get an individual taxpayer identification number (ITIN). To apply for an ITIN, file Form W-7, Application for IRS Individual Taxpayer Identification Number, with the IRS . It usually takes about 4-6 weeks to get an ITIN . Note: An /TIN is for tax use only. It does not entitle you to social security benefits or change your employment or immigration status under U.S. law. If you have applied for a U.S . taxpayer identifying number but have not yet received it, you may attach a copy of a completed Form W-7 or SS-5 showing that a number has been applied for. Line 3 If your country of residence for tax purposes has issued you a tax identifying number, enter it here. For example, if you are a resident of Canada , enter your Social Insurance Number. Line 4 Your permanent residence address is the address in the country where you claim to be a resident for purposes of that country's income tax . If you are completing Form 8233 to claim a tax treaty withholding exemption , you must determine your residency in the manner required by the treaty. Do not show the address of a financial institution , a post office box, or an address used solely for mailing purposes . If you are an individual who does not have a tax residence in any country, your permanent residence is where you normally reside . Most tax treaties that provide for a tax treaty withholding exemption require that the recipient be a resident of the treaty country at the time of, or immediately prior to, entry into the United States. Thus , a student or researcher may generally claim the withholding exemption even if he or she no longer has a permanent address in the treaty country after entry into the United States. If this is the case, you may provide a U.S. address on line 4 and still be eligible for the withholding exemption if all other conditions required by the tax treaty are met. You must also identify on line 12a and/or line 13b the tax treaty country of which you were a resident at the time of, or immediately prior to, your entry into the United States. Line 6 Enter your U.S. visa type. For example , foreign students are usually granted an "F-1" visa . Foreign professors, teachers, or researchers are usually granted a "J-1" visa . Business/vocational trainees are usually granted an "M-1" visa; however, some persons granted a "J-1" visa may also be considered business/vocational trainees (for example , a person admitted to complete a postgraduate residency in medicine). Note: If you do not have, or do not require, a visa, write "None ." m Spouses and dependents admitted on secondary visas (for example "F-2 ""J-2 ""H-4 "and "0-3" visas) are 'nat Jsual/y eligib/e to claim the same treaty benefits as the primary visa holder. Line 8 You are generally required to enter your date of entry into the United States that pertains to your current nonimmigrant status. For example, enter the date of arrival shown on your current INS Form 1-94, Arrival-Departure Record. -3- Exception. If you are claiming a tax treaty benefit that is determined by reference to more than one date of arrival, enter the earlier date of arrival. For example , you are currently claiming treaty benefits (as a teacher or a researcher) under article 19 of the tax treaty between the United States and Japan . You previously claimed treaty benefits (as a student) under article 20 of that treaty . Under article 22 of that treaty, the combination of consecutive exemptions under articles 19 and 20 may not extend beyond 5 tax years from the date you entered the United States as a student. If article 22 of that treaty applies, enter on line 8 the date you entered the United States as a student. Line 9a Enter your current nonimmigrant status. For example , enter your current nonimmigrant status shown on your current INS Form 1-94. Line 9b Enter the date your current non immigrant status expires. For example, you may enter the date of expiration shown on your current INS Form 1-94. Enter "OS" on line 9b if the date of expiration is based on "duration of status." Line 10 Nonresident alien students, professors/ teachers, and researchers using Form 8233 to claim a tax treaty withholding exemption for compensation for personal services must attach to Form 8233 the statement required by Rev. Proc. 87-8 , 87-9, or 93-22. The format and contents of the required statements are contained in Pub. 519. For a newly ratified tax treaty not listed in the above revenue procedures, a nonresident alien student, professor/ teacher, or researcher must attach a statement in a format similar to those contained in Pub. 519 . Part II Line 11a For compensation for independent personal services, examples of acceptable descriptions to enter on this line include: "Consu lting contract to design software" or "give three lectures at XYZ University. " For compensation for dependent personal services, examples of acceptable descriptions to enter on this line include: • A nonresident alien student may enter "part-time library assistant," "part-time restaurant worker," or "teaching one chemistry course per semester to undergraduate students. " • A nonresident alien professor or teacher may enter "teaching at ABC University. " • A nonresident alien researcher may enter "research at ABC University's school for liquid crystal research." • A nonresident alien business/vocational trainee may enter "neurosurgical residency at ABC Hospital" or "one-year internship in hydraulic engineering at XYZ Corporation ." Line11b Enter the total amount of compensation for personal services you will receive from this withholding agent during the tax year. Enter an estimated amount if you do not know the exact amount. Line 12a Enter the specific treaty and article on which you are basing your claim for exemption from withholding (for example, "U.S./Germany tax treaty, Article 20(4)"). Line 12b If all income received for the services performed to which this Form 8233 applies is exempt, write "All. " If only part is exempt , enter the exact dollar amount that is exempt from withholding . Line 12c Generally, you may claim a withholding exemption based on a U.S. tax treaty with the country in which you claim permanent (or indefinite) residence. This is the foreign country in which you live most of the time . It is not necessarily the country of your citizensh ip. For example, you are a citizen of Pakistan but maintain your home in England . You cannot claim a withholding exemption based on the U.S./ Pakistan tax treaty. Any withholding exemption you claim must be based on the U.S./United Kingdom tax treaty. Line 13b Enter the specific treaty and article on which you are basing your claim for exemption from withholding (for example , "U.S./Germany tax treaty, Article 20(3)"). Line 14 Provide sufficient facts to justify the exemption from withholding claimed on line 12 and/or line 13. Be sure you provide enough details to allow the IRS to determine the tax treaty benefit you are claiming. Lines 15 through 18 (for certain independent personal services) Note: Do not complete lines 15 through 18 if you are claiming on line 12b that all of the compensation you are receiving for independent personal services is exempt from withholding. Line 15 For compensation for independent personal services for which an exemption from withholding is not available, 30% must be withheld from that compensation after subtracting the value of one personal exemption. You will generally enter "1" on line 15; however, if the exception below applies to you, enter the total number of personal exemptions you are entitled to on line 15. Exception. If you are a resident of Canada , Mexico, Japan , or the Republic of (South) Korea; a student from India; or a U.S. national; you may be able to claim additional personal exemptions for your spouse and children . See Pub. 519 for more information . Lines 16 and 17 Each allowable personal exemption must be prorated for the number of days during the tax year you will perform the personal services in the United States. Enter the number of days on line 16 that pertain to the independent personal services described in line 11 a and included on line 11 b. To figure the daily personal exemption amount to enter on line 17, divide the personal exemption amount by 365 (366 for a leap year) and multiply the result by the amount you entered on line 15. For example, if you are entitled to one personal exemption for 2001, enter $7.95 (that is, $2,900 / 365 days= $7.95 x 1 personal exemption= $7.95) on line 17. Part IV Withholding Agent's Responsibilities When the nonresident alien individual gives you Form 8233 , review it to see if you are satisfied that the exemption from withholding is warranted . If you are satisfied , based on the facts presented , complete and sign the certification in Part IV. You will need three copies of a completed Form 8233. Within 5 days of your acceptance, forward one copy to: Internal Revenue Service International Section P.O. Box 920 Bensalem, PA 19020-8518 Give one copy of the completed Form 8233 to the nonresident alien individual. Keep a copy for your records. Each copy of Form 8233 must include any attachments submitted by the nonresident alien individual. The exemption from withholding is effective for payments made retroactive to the date of the first payment covered by Form 8233, even though you must wait at least 10 days after you have properly mailed Form 8233 to the IRS to see whether the IRS has any objections to the Form 8233. You must not accept Form 8233 , and you must withhold, if either of the following applies: • You know, or have reason to know, that any of the facts or statements on Form 8233 may be false or • You know, or have reason to know, that the nonresident alien's eligibility for the exemption from withholding cannot be readily determined (for example, you know the nonresident alien has a fixed base or permanent establishment in the United States). If you accept Form 8233 and later find that either of the situations described above applies , you must promptly notify the IRS (by writing to the above address) and you must begin withholding on any amounts not yet paid . Also , if you are notified by the IRS that the no_nresident alien's el igibility for the exemption from withholding is in doubt or that the nonresident alien is not eligible for exemption from withholding , you must begin withholding immediately. See ... Regulations section 1.1441-4(b)(2)(111) for examples illustrating these rules. If you submit an incorrect Form 8233 , you will be notified by the IRS that the form submitted is not acceptable and that you must begin withholding immediately. Examples of incorrect Forms 8233 include: • Any Form 8233 that claims a tax treaty benefit that does not exist or is obviously false. • Any Form 8233 that has not been completed in sufficient detail to allow determination of the correctness of the tax treaty benefit or exemption claimed. Signature You or your authorized agent must sign and date Form 8233. See Regulations section 1.1441-7(c) for information about authorized agents. Paperwork Reduction Act Notice. We ask for the information on this form to carry out the Internal Revenue laws of the United States. If you want to receive exemption from withholding on compensation for independent (and certain dependent) personal services, you are required to give us the information . We need it to ensure that you are complying with these laws and to allow us to figure and collect the right amount of tax. You are not required to provide the information requested on a form that is subject to the Paperwork Reduction Act unless the form displays a valid 0MB control number. Books or records relating to a form or its instructions must be retained as long as their contents may become material in the administration of any Internal Revenue law. Generally, tax returns and return information are confidential, as required by section 6103. The time needed to complete and file this form will vary depending on individual circumstances. The estimated average time is: Recordkeeping, 1 hr. 5 min.; Learning about the law or the form, 31 min.; Preparing and sending the form to IRS, 57 min . If you have comments concerning the accuracy of these time estimates or suggestions for making this form simpler, we would be happy to hear from you . You can write to the Tax Forms Committee, Western Area Distribution Center, Rancho Cordova , CA 957 43-0001. Do not send the tax form to this address. Instead, give it to your withholding agent. -4- """' W-8BEN Do not tJ:'Sl:l thi"!; fo rm for: Cer tificate of Foreign Status of Beneficial Owner for United St ates Tax Withholding .,. Section re ferences am t o tho lntorn.:11 R:ove m Ki· Cod o. ._ St:"!t.1 sep ara t e in<5.tru-ctiom,_ • Give thi'.s for m to the vflthholdi:ng a g~mt or payor. Do not ~E:!:hd lo the IRS. t:NSHN1d,- u~ form: . . W-9 '#.fl.!:.C! . W 8[U (:t W-BIMY • 'i,f;,r:il>! uf !::-~:.; 0 u~i-,tr,ii f~;m..; (,r cis::,tH D (;\,tr:1)>1·>< !..'\<:,1 O 1 ,i;,: -~~(-Mi·1pt c,'9::--inix;;tkm O P!·<'.'ft:,~ 1<:::,.1HC!NVB D ux-,7.~·,11;<¥: D f::;. i.Ye D rn:>.!lr(}>:"1r.-1r.-:J I:t11:l!)' D Instructions for Form W-8BEN (Rev . August 2001) il".:iflil Departm ent of the Treasury ~ Internal Revenu e Service (U se with the December 2000 revision of Form W-8BEN.) Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding Section roferem;os aro fa the !nfvmai' R!:Nflnue Code unless otfu.::-:wi:Se nntad. General Instructions Note: For definitions of forms used tilroughoUJ these Jnsuuc!ions:. see Definitions on .oag'fis 2 and 3. Purpose of Form. Foreign person$ are subject to U.S. lax al a 30% rate on incorne they receive from U.S. sources that consists of: • Interest (inc luding certain ori1Ji!lal issue d iscount (O ID)) • Dividends; "' li1fW[T-0u::::J~1~1]j ·8S X1l in>l'@d:13_.J You mav Also use F orm w .. flB EN ID certify that in come from a notional pri nc ipal contra ct is not effective I,' connec:ed with the conduct of a !rade Dr busim,ss in the Unrted Stales. A w ithholding a9ent or payer of the income may re ly on a properly completed Fom, W-8BEN to treat a payment associated wilh the Form vV-8B EN as a payment lo a foreign person who berieficiaily owns the amounts paid. If applicable. the withholding agent may en the Form W-BBE N to app!y a reduced rate ol Instructions Form W-8BfN (Rev. December 2000) Department of the Treasury Internal Revenue Service Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding ..,. Section references are to the Internal Revenue Code. ..,. See separate instructions. ..,. Give this form to the withholding agent or payer. Do not send to the IRS. Do not use this form for: • A U.S. citizen or other U.S. person, including a resident alien individual • A person claiming an exemption from U.S. withholding on income effective ly connected with the conduct . of a trade or business in the United States. • A foreign partnership, a foreign simple trust. or a foreign grantor trust (see instructions for exceptions) . • A foreign government. international orga ni zation, foreign central bank of issue, foreign tax . exempt organization, foreign private foundation, or government of a U.S. possession that received effectively connected income or that is cla iming the applicability of section(s) 115(2), 501 (c), 892, 895, or 1443(b) (see instructions) . Note: These entities should use Form W·BBEN if they are claiming treaty benefits or are providing the form only to claim they are a foreign person exempt from backup withholding. • A person acting as an intermediary . Note: See instructions for additional exceptions. 0MB No. 1545· 1621 Instead, use Form: .W·9 .W·8ECI . .W·8ECI or W-81MY . .W·8ECI or W·8EXP . .W-81MY Identification of Beneficial Owner (See in struction s.) 1 Name of individual or organization that is the beneficial owner 2 Country of incorporation or organization 3 Type of beneficial owner: D Individual D Granter trust D Central bank of issue D Complex trust D Tax.exempt organization D Private foundation D Corporation D Estate D Disregarded entity D Partnership D Government D International organization D Simple trust 4 Permanent residence address (street, apt. or suite no. , or rural route). Do not use a P.O. box or in-care-of address. City or town, state or province. Include postal code where appropriate. Country (do not abbreviate) 5 Mailing address (if different from above) City or town, state or province. Include postal code where appropriate. Country (do not abbreviate) 6 U.S. taxpayer identification number, if required (see instructions) 7 Foreign tax identifying number, if any (optional) D SSN or ITIN D EIN 8 Reference number(s) (see instructions) •@Iii Claim of Tax Treaty Benefits (if applicable) I certify that (check all that apply): 9 a D The beneficial owner is a resident of ................. .within th e meaning of the income tax treaty between the United States and that country. b D If required, the U.S . taxpayer identification number is stated on line 6 (see instructions). c D The beneficial owner is not an individual, derives the item (or items) of income for which the treaty benefits are claimed, and, if applicable, meets the requirements of the treaty provision dealing with limitation on benefits (see instructions). d D The beneficial owner is not an individual, is claiming treaty benefits for dividends received from a foreign corporation or interest from a U.S. trade or business of a foreign corporation, and meets qualified resident status (see instruction s). e D The beneficial owner is related to the person obligated to pay the income within the meaning of section 267(b) or 707(b), and will file Form 8833 if the amount subject to withholding received during a calendar year exceeds, in the aggregate, $500,000. 10 Special rates and conditions (if applicable-see instructions): The beneficial owner is claiming the provisions of Article ............. .of the treaty identified on line 9a above to claim a ............... % rate of withholding on (specify type of income): . .... .... ·-·-· ·-············ ·· · . Exp lain the reasons the beneficial owner meets the terms of the treaty article: ... . ........ . .. .. .......•. _ .. _ ..•..........•.•. _. _ ........... _. hfflllli Notional Principal Contracts 11 D I have provided or will provide a statement that identifies those notional principal contracts from which the income is not effectively connected with the conduct of a trade or business in the United States. I a ree to update this statement as required . Certification Under penalties of perjury, I declare that I have examined the information on th is form and to the best of my knowledge and belief it is true, correct. and complete. further certify under pen a I ties of perjury that: • I am the beneficial owner (or am authorized to sign for the beneficial owner) of all the income to which this form relates, • The beneficial owner is not a U.S. person, • The income to which this form relates is not effectively connected with the conduct of a trade or business in the United States or is effectively connected but is not subject to tax under an income tax treaty, and • For broker transactions or barter exchanges, the beneficial owner is an exempt foreign person as defined in the instructions. Furthermore, I authorize thi s form to be provided to any withholding agent that has control, receipt. or custody of the income of which I am the beneficial owner or any withholding agent that can disburse or make payments of the income of which I am the beneficial owner. Sign Here Date (MM·DD·YYYY) Capacity in which acting For Paperwork Reduction Act Notice, see separate instructions. Cat. No. 25047Z Form W-8BEN (Rev. 12·2000) Instructions for Form W-8BEN (Rev. December 2000) Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding Section references are to the Internal Revenue Code unless otherwise noted. ~~ Department of the Treasury fdl!)JJ Internal Revenue Service General Instructions Note: For definitions of terms used throughout these instructions, see Definitions on pages 2 and 3. Purpose of Form. Foreign persons are subject to U.S. tax at a 30% rate on income they receive from U.S. sources that consists of: • Interest (including certain original issue discount (010)); • Dividends; • Rents; • Royalties; • Premiums; • Annuities; • Compensation for, or in expectation of, services performed; • Substitute payments in a securities lending transaction; or • Other fixed or determinable annual or periodical gains, profits, or income. This tax is imposed on the gross amount paid and is generally collected by withholding on that amount. A payment is considered to have been made whether it is made directly to the beneficial owner or to another person, such as an intermediary, agent, or partnership, for the benefit of the beneficial owner. If you receive certain types of income, you must provide Form W-8BEN to: • Establish that you are a foreign person; • Claim that you are the beneficial owner of the income for which Form W-8BEN is being provided; and • If applicable, claim a reduced rate of, or exemption from, withholding as a resident of a foreign country with which the United States has an income tax treaty. You may also be required to submit Form W-8BEN to claim an exception from domestic information reporting and backup withholding at a 31% rate, including for certain types of income that are not subject to foreign-person withholding. Such income includes : • Broker proceeds. • Short-term (183 days or less) original issue discount (010). • Bank deposit interest. • Foreign source interest, dividends, rents, or royalties. • Proceeds from a wager placed by a nonresident alien individual in the games of blackjack, baccarat, craps, roulette, or "big 6" wheel. You may also use Form W-8BEN to certify that income from a notional principal contract is not effectively connected with the conduct of a trade or business in the United States. A withholding agent or payer of the income may rely on a properly completed Form W-8BEN to treat a payment associated with the Form W-8BEN as a payment to a foreign person who beneficially owns the amounts paid. If applicable, the withholding agent may rely on the Form W-8BEN to apply a reduced rate of withholding at source. Provide Form W-8BEN to the withholding agent or payer before income is paid or credited to you . Failure to provide a Form W-8BEN when requested may lead to withholding of a 30% or 31 % amount from the payment. Note: For additional information and instructions for the withholding agent, see the Instructions for the Requester of Forms W-BBEN, W-BECI, W-BEXP, and W-8/MY. Who must file. You must give Form W-SBEN to the withholding agent or payer if you are a foreign person and you are the beneficial owner of an amount subject to withholding . Submit Form W-8BEN when requested by the withholding agent or payer whether or not you are claiming a reduced rate of, or exemption from, withholding. Do not use Form W-8BEN if: • You are a U.S. citizen (even if you reside outside the United States) or other U.S. person (including a resident alien individual). Instead, use Form W-9, Request for Taxpayer Identification Number and Certification. • You are a disregarded entity with a single owner that is a U.S . person and you are not a hybrid entity claiming treaty benefits. Instead, provide Form W-9. • You are a nonresident alien individual who claims exemption from withholding on compensation for independent or dependent personal services performed in the United States . Instead, provide Form 8233, Exemption from Withholding on Compensation for Independent (and Certain Dependent) Personal Services of a Nonresident Alien Individual, or Form W-4, Employee's Withholding Allowance Certificate. • You are receiving income that is effectively connected with the conduct of a trade or business in the United States. Instead, provide Form W-BECI, Certificate of Foreign Person's Claim for Exemption From Withholding on Income Effectively Connected With the Conduct of a Trade or Business in the United States. If any of the income for which you have provided a Form W-8BEN becomes effectively connected, this is a change in Cat. No. 25576H circumstances and Form W-8BEN is no longer valid . You must file Form W-8ECI. See Change in circumstances below. • You are filing for a foreign government, international organization, foreign central bank of issue, foreign tax-exempt organization, foreign private foundation, or government of a U.S. possession claiming the applicability of section 115(2), 501 (c), 892, 895, or 1443(b). Instead, provide Form W-8EXP, Certificate of Foreign Government or Other Foreign Organization for United States Tax Withholding. However, you should use Form W-8BEN if you are claiming treaty benefits or are providing the form only to claim you are a foreign person exempt from backup withholding. You should use Form W-8ECI if you received effectively connected income (e.g. , income from commercial activities). • You are a foreign flow-through entity, other than a hybrid entity, claiming treaty benefits. Instead, provide Form W-81MY, Certificate of Foreign Intermediary, Foreign Flow-Through Entity, or Certain U.S. Branches for United States Tax Withholding. However, if you are a partner, beneficiary, or owner of a flow-through entity and you are not yourself a flow-through entity, you may be required to furnish a Form W-8BEN to the flow-through entity. • You are a reverse hybrid entity transmitting beneficial owner documentation provided by your interest holders to claim treaty benefits on their behalf. Instead, provide Form W-81MY. • You are a withholding foreign partnership or a withholding foreign trust. A withholding foreign partnership or a withholding foreign trust is a foreign partnership or trust that has entered into a withholding agreement with the IRS under which it agrees to assume primary withholding responsibility for each partner's, beneficary's, or owner's distributive share of income subject to withholding that is paid to the partnership or trust. Instead, provide Form W-81MY. • You are acting as an intermediary (i.e., acting not for your own account, but for the account of others as an agent, nominee, or custodian) . Instead, provide Form W-81MY. Giving Form W-8BEN to the withholding agent. Do not send Form W-8BEN to the IRS. Instead, give it to the person who is requesting it from you. Generally, this will be the person from whom you receive the payment or who credits your account. Give Form W-8BEN to the person requesting it before the payment is made to you or credited to your account. If you do not provide this form, the withholding agent may have to withhold at a 30% (foreign-person withholding) or 31 % (backup withholding) rate . If you receive more than one type of income from a single withholding agent for which you claim different benefits, the withholding agent may, at its option, require you to submit a Form W-8BEN for each different type of income. Generally, a separate Form W-8BEN must be given to each withholding agent. Note: If you own the income or account jointly with one or more other persons, the income or account will be treated by the withholding agent as owned by a foreign person if Forms W-BBEN are provided by all of the owners. If the withholding agent receives a Form W-9 from any of the joint owners, the payment must be treated as made to a U.S. person. Change in circumstances. If a change in circumstances makes any information on the Form W-8BEN you have submitted incorrect, you must notify the withholding agent or payer within 30 days of the change in circumstances and you must file a new Form W-8BEN or other appropriate form. If you use Form W-8BEN to certify that you are a foreign person, a change of address to an address in the United States is a change in circumstances. Generally, a change of address within the same foreign country or to another foreign country is not a change in circumstances. However, if you use Form W-8BEN to claim treaty benefits, a move to the United States or outside the country where you have been claiming treaty benefits is a change in circumstances. In that case, you must notify the withholding agent or payer within 30 days of the move. If you become a U.S. citizen or resident after you submit Form W-8BEN, you are no longer subject to the 30% foreign-person withholding rate. You must notify the withholding agent or payer within 30 days of becoming a U.S. citizen or resident. You may be required to provide a Form W-9. For more information, see Form W-9 and instructions. Expiration of Form W-8BEN. Generally, a Form W-8BEN provided without a U.S. taxpayer identification number (TIN) will remain in effect for a period starting on the date the form is signed and ending on the last day of the third succeeding calendar year, unless a change in circumstances makes any information on the form incorrect. For example, a Form W-8BEN signed on September 30, 2001 , remains valid through December 31, 2004. A Form W-8BEN furnished with a U.S. TIN will remain in effect until a change in circumstances makes any information on the form incorrect, provided that the withholding agent reports on Form 1042-S at least one payment annually to the beneficial owner who provided the Form W-8BEN. See Line 6 on page 4 for circumstances under which you must provide a U.S. TIN. Definitions Beneficial owner. For payments other than those for which a reduced rate of withholding is claimed under an income tax treaty, the beneficial owner of income is generally the person who is required under U.S. tax principles to include the income in gross income on a tax return. A person is not a beneficial owner of income, however, to the extent that person is receiving the income as a nominee, agent, or custodian, or to the extent the person is a conduit whose participation in a transaction is disregarded. In the case of amounts paid that do not constitute income, beneficial ownership is determined as if the payment were income. Foreign partnerships, foreign simple trusts, and foreign grantor trusts are not the beneficial owners of income paid to the partnership or trust. The beneficial owners of income paid to a foreign partnership are generally the partners in the partnership, provided that the partner is not itself a partnership, foreign simple or grantor trust, nominee or other agent. The beneficial owners of income paid to a foreign simple trust (i .e., a foreign trust that is described in section 651 (a)) are generally the Page 2 beneficiaries of the trust, if the beneficiary is not a foreign partnership, foreign simple or grantor trust, nominee or other agent. The beneficiaries of a foreign grantor trust (i.e., a foreign trust to the extent that all or a portion of the income of the trust is treated as owned by the grantor or another person under sections 671 through 679) are the persons treated as the owners of the trust. The beneficial owners of income paid to a foreign complex trust (i .e., a foreign trust that is not a foreign simple trust or foreign grantor trust) is the trust itself. The beneficial owner of income paid to a foreign estate is the estate itself. Note: A payment to a U.S. partnership, U.S. trust, or U.S. estate is treated as a payment to a U.S. payee that is not subject to 30% foreign-person withholding. A U.S. partnership, trust, or estate should provide the withholding agent with a Form W-9. Foreign person. A foreign person includes a nonresident alien individual, a foreign corporation , a foreign partnership, a foreign trust, a foreign estate, and any other person that is not a U.S. person. It also includes a foreign branch or office of a U.S. financial institution or U.S . clearing organization if the foreign branch is a qualified intermediary. Generally, a payment to a U.S. branch of a foreign person is a payment to a foreign person. Nonresident alien individual. Any individual who is not a citizen or resident of the United States is a nonresident alien individual. An alien individual meeting either the "green card test" or the "substantial presence test" for the calendar year is a resident alien . Any person not meeting either test is a nonresident alien individual. Additionally, an alien individual who is a resident of a foreign country under the residence article of an income tax treaty, or an alien individual who is a resident of Puerto Rico, Guam, the Commonwealth of the Northern Mariana Islands, the U.S. Virgin Islands, or American Samoa is a nonresident alien individual. See Pub. 519, U.S. Tax Guide for Aliens, for more information on resident and nonresident alien status. Note: Even though a nonresident alien individual married to a U.S. citizen or resident alien may choose to be treated as a resident alien for certain purposes (e .g., filing a joint income tax return), such individual is still treated as a nonresident alien for withholding tax purposes on all income except wages. Flow-through entity. A flow-through entity is a foreign partnership (other than a withholding foreign partnership), a foreign simple or foreign grantor trust (other than a withholding foreign trust) , or, for payments for which a reduced rate of withholding is claimed under an income tax treaty, any entity to the extent the entity is considered to be fiscally transparent (see below) with respect to the payment by an interest holder's jurisdiction. Hybrid entity. A hybrid entity is any person (other than an individual) that is treated as fiscally transparent (see below) in the United States but is not treated as fiscally transparent by a country with which the United States has an income tax treaty. Hybrid entity status is relevant for claiming treaty benefits. See Line 9c on page 4. Reverse hybrid entity. A reverse hybrid entity is any person (other than an individual) that is not fiscally transparent under U.S. tax law principles but that is fiscally transparent under the laws of a jurisdiction with which the United States has an income tax treaty. See line 9c on page 4. Fiscally transparent entity. An entity is treated as fiscally transparent with respect to an item of income for which treaty benefits are claimed to the extent that the interest holders in the entity must, on a current basis , take into account separately the ir shares of an item of income paid to the entity, whether or not distributed, and must determine the character of the items of income as if they were realized directly from the sources from which realized by the entity. For example, partnerships, common trust funds, and simple trusts or grantor trusts are generally considered to be fiscally transparent with respect to items of income received by them. Disregarded entity. A business entity that has a single owner and is not a corporation under Regulations section 301.7701-2(b) is disregarded as an entity separate from its owner. Amounts subject to withholding. Generally, an amount subject to withholding is an amount from sources within the United States that is fixed or determinable annual or periodical (FDAP) income. FDAP income is all income included in gross income, including interest (as well as 010), dividends, rents, royalties , and compensation . FDAP income does not include most gains from the sale of property (including market discount and option premiums). Withholding agent. Any person, U.S. or foreign, that has control, receipt, or custody of an amount subject to withholding or who can disburse or make payments of an amount subject to withholding is a withholding agent. The withholding agent may be an individual , corporation , partnership, trust, association, or any other entity, including (but not limited to) any foreign intermediary, foreign partnership, and U.S . branches of certain foreign banks and insurance companies . Generally, the person who pays (or causes to be paid) the amount subject to withholding to the foreign person (or to its agent) must withhold. Specific Instructions Note: A hybrid entity should give Form W-BBEN to a withholding agent only for income for which it is claiming a reduced rate of withholding under an income tax treaty. A reverse hybrid entity should give Form W-BBEN to a withholding agent only for income for which no treaty benefit is being claimed. Part I Line 1. Enter your name. If you are a disregarded entity with a single owner who is a foreign person and you are not claiming treaty benefits as a hybrid entity, this form should be completed and signed by your foreign single owner. If the account to which a payment is made or credited is in the name of the disregarded entity, the foreign single owner should inform the withholding agent of this fact. This may be done by including the name and account number of the disregarded entity on line 8 (reference number) of Part I of the form. However, if you are a disregarded entity that is claiming treaty benefits as Page 3 If you are a corporation, enter the country of a hybrid entity, this form should be completed and signed by you. Line 2. incorporation . If you are another type of entity, enter the country under whose laws you are created, organized , or governed. If you are an individual, enter N/A (for "not applicable"). Line 3. Check the one box that applies. By checking a box, you are representing that you qualify for this classification. You must check the box that represents your classification (e.g., corporation, partnership, trust, estate, etc.) under U.S. tax principles. Do not check the box that describes your status under the law of the treaty country. If you are a partnership or disrega_rded entit_y receiving a payment for which treaty benefits are being claimed, you must check the "Partnership" or "Disregarded entity" box. check the "Individual" box, not the "Disregarded entity" box. If you are a sole proprietor, . Caution: Only entities that are tax-exempt under section 501 should check the "Tax-exempt organizations" box. Such organizations should use Form W-BBEN only if they are claiming a reduced rate of withholding under an income tax treaty or some code exception other than section 501. Use Form W-BEXP if you are claiming an exemption from withholding under section 501. Line 4. Your permanent residence address is the address in the country where you claim to be a resident for purposes of that country's income tax. If yo~ are g_iving Form W-8BEN to claim a reduced rate of withholding under an income tax treaty, you must determine your residency in the manner required by the treaty. Do ~ot show the address of a financial institution, a post office box or an address used solely for mailing purposes. If you are 'an individual who does not have a tax residence in any country, your permanent residence is where you normally reside. If you are not an individual and you do not have a tax residence in any country, the permanent residence address is where you maintain your principal office . Line 5. Enter your mailing address only if it is different from the address you show on line 4. Line 6. If you are an individual, you are generally required to enter your social security number (SSN). To apply for an SSN, get Form SS-5 from a Social Security Administration (SSA) office . Fill in Form SS-5 and return it to the SSA. If you do not have an SSN and are not _eligi~l_e t~ get one, you must get an individual taxpayer 1dent1f1cat1on . number (ITIN). To apply for an ITIN, file Form W-7 with the IRS. It usually takes about 30 days to get an ITIN. If you are not an individual (e.g., a foreign estate or trust), or you are an individual who is an employer or who is engaged in a U.S. trade or business as a sole proprietor, use Form SS-4, Application for Employer Identification Number, to obtain an EIN . If you are a disregarded entity claiming treaty benefits as a hybrid entity, enter your EIN. You must provide a U.S. taxpayer identification number (TIN) if you are: Page 4 1. Claiming an exemption from withholding under section 871 (f) for certa in annu ities received Uflder qualified plans, or 2. A foreign grantor trust with 5 or fewer grantors, or 3. Claiming benefits under an income tax treaty. However, a U.S. TIN is not required to be shown in order to claim treaty benefits on the following items of income: • Dividends and interest from stocks and debt obligations that are actively traded ; • Dividends from any redeemable security issued by an investment company registered under the Investment Company Act of 1940 (mutual fund); • Dividends, interest, or royalties from units of beneficial interest in a unit investment trust that are (or were upon issuance) publicly offered and are registered with the SEC under the Securities Act of 1933; and • Income related to loans of any of the above securities. If your country of residence for tax purposes has Note: You may want to obtain and provide a U.S. TIN on Form W-BBEN even though it is not required. A Form W-BBEN containing a U.S. TIN remains valid for as long as your status and the information relevant to the certifications you make on the form remain unchanged provided at least one payment is reported to you annually on Form 1042-S. Line 7. issued you a tax identifying number, enter it here. For example, if you are a resident of Canada, enter your Social Insurance Number. Line 8. This line may be used by the filer of Form W-8BEN or by the withholding agent to whom it is provided to include any referen?ing inf~rmatio~ that is useful to the withholding agent in carrying out its obligations. For example, withholding agen_ts who a~e required to associate the Form W-8BEN with a part1~ular Form W-81MY may want to use line 8 for a referencing number or code that will make the association clear. A beneficial owner may use line 8 to include the number of the account for which he or she is providing the form. Part II Line 9a. Enter the country where you claim to be a resident for income tax treaty purposes. For treaty purposes, a person is a resident of a treaty country if the person is a resident of that country under the terms of the treaty. Line 9b. If you are claiming benefits under an income tax treaty, you must have a U.S. TIN unless one of the exceptions listed under Line 6 above applies. Line 9c. An entity (but not an individual) that is claiming a reduced rate of withholding under an income tax treaty must represent that it (1) derives the item of income for which the treaty benefit is claimed and (2) meets the limitation on benefits provisions contained in the treaty, if any. An item of income may be derived by either the entity receiving the item of income or by the interest holders in the entity or, in certain circumstances, both. A~ item of income paid to an entity is considered to be derived by the entity only if the entity is not fiscally transparent u~der the laws of the entity's jurisdiction with respect to the item of income . An item of income paid to an entity shall be considered to be derived by the interest holder in the entity only if (1) the interest holder is not fiscally transparent in its jurisdiction with respect to the item of income and (2) the entity is considered to be fiscally transparent under the laws of the interest holder's jurisdiction with respect to the item of income. An item of income paid directly to a type of entity specifically identified in a treaty as a resident of a treaty jurisdiction is treated as derived by a resident of that treaty jurisdiction. If an entity is claiming treaty benefits on its own behalf, it should complete Form W-8BEN . If an interest holder in an entity that is considered fiscally transparent in the interest holder's jurisdiction is claiming a treaty benefit, the interest holder should complete Form W-8BEN on its own behalf and the fiscally transparent entity should associate the interest holder's Form W-8BEN with a Form W-81MY completed by the entity. Note: An income tax treaty may not apply to reduce the amount of any tax on an item of income received by an entity that is treated as a domestic corporation for U.S. tax purposes. Therefore, neither the domestic corporation nor its shareholders are entitled to the benefits of a reduction of U.S. income tax on an item of income received from U.S. sources by the corporation. To determine whether an entity meets the limitation on benefits provisions of a treaty, you must consult the specific provisions or articles under the treaties . Income tax treaties are available on the IRS Web Site at www.irs.gov/ind_info/treaties.html. Note: If you are an entity that derives the income as a resident of a treaty country, you may check this box if the applicable income tax treaty does not contain a "limitation on benefits" provision. Line 9d. Caution: If you are claiming treaty benefits under an income tax treaty entered into force after December 31, 1986, do not check box 9d. Instead, check box 9c. If you are a foreign corporation claiming treaty benefits under an income tax treaty that entered into force before January 1, 1987 (and has not been renegotiated) on (a) U.S. source dividends paid to you by another foreign corporation, or (b) U.S. source interest paid to you by a U.S . trade or business of another foreign corporation, you must generally be a "qualified resident" of a treaty country. See section 884 for the definition of interest paid by a U.S. trade or business of a foreign corporation ("branch interest") and other applicable rules. In general, a foreign corporation is a qualified resident of a country if one or more of the following applies: • It meets a 50% ownership and base erosion test. • It is primarily and regularly traded on an established securities market in its country of residence or the United States. • It carries on an active trade or business in its country of residence. • It gets a ruling from the IRS that it is a qualified resident. See Regulations section 1.884-5 for the requirements that must be met to satisfy each of these tests. Line 9e. Check this box if you are related to the withhold ing agent within the meaning of section 267(b) or 707(b) and the aggregate amount subject to withholding received during the calendar year exceeds $500,000. Add itionally, you must file Form 8833, Treaty-Based Return Position Disclosure Under Section 6114 or 7701(b) . Line 10. Line 10 must be used only if you are claiming treaty benefits that require that you meet conditions not covered by the representations you make in lines 9a through 9e . However, this line should always be completed by foreign students and researchers claiming treaty benefits . See Scholarship and Fellowship Grants below for more information. Additional examples of persons who should complete this line are: 1. Exempt organizations claiming treaty benefits under the exempt organization articles of the treaties with Canada, Mexico, Germany, and the Netherlands. 2. Persons claiming an exemption under a personal services article that contains a monetary threshold. 3. Foreign corporations that are claiming a preferential rate applicable to dividends based on ownership of a specific percentage of stock. 4. Persons claiming treaty benefits on royalties if the treaty contains different withholding rates for different types of royalties. This line is generally not applicable to claiming treaty benefits under an interest or dividends (other than dividends subject to a preferential rate based on ownership) article of a treaty. Scholarship and Fellowship Grants. A nonresident alien student (including a trainee or business apprentice) or researcher who receives scholarship or fellowship grant income may use Form W-8BEN to claim benefits under a tax treaty that apply to reduce or eliminate U.S. tax on such income. No Form W-8BEN is required unless a treaty benefit is being claimed. A nonresident alien student or researcher who receives compensation for personal services should use Form 8233 to claim any benefits of a tax treaty that apply to such compensation if the compensation is included in, or is in addition to, the individual's scholarship or fellowship grant income. Generally, only a nonresident alien individual may use the terms of a tax treaty to reduce or eliminate U.S. tax on income from a scholarship or fellowship grant. However, most tax treaties contain a provision known as a "saving clause. " Exceptions specified in the saving clause may permit an exemption from tax to continue for scholarship or fellowship grant income even after the recipient has otherwise become a U.S. resident alien for tax purposes . Thus, a student or researcher may continue to use Form W-8BEN to claim a tax treaty benefit if the withholding agent has otherwise indicated an intention to withhold on a scholarship or fellowship grant. Example. Article 20 of the U.S.-China income tax treaty allows an exemption from tax for scholarship income received by a Chinese student temporarily present in the United States. Under U.S. law, this student will become a resident alien for tax purposes if his or her stay in the United States exceeds 5 calendar years. However, paragraph 2 of the first Protocol to the U.S.-China treaty Page 5 (dated April 30, 1984) allows the provisions of Article 20 to continue to apply even after the Chinese student becomes a resident alien of the United States. Completing lines 4 and 9a. Most tax treaties that contain an article exempting scholarship or fellowship grant income from taxation require that the recipient be a resident of the other treaty country at the time of, or immediately prior to, entry into the United States. Thus, a student or researcher may claim the exemption even if he or she no longer has a permanent address in the other treaty country after entry into the United States. If this is the case, you may provide a U.S. address on line 4 and still be eligible for the exemption if all other conditions required by the tax treaty are met. You must also identify on line 9a the tax treaty country of which you were a resident at the time of, or immediately prior to, your entry into the United States. Completing line 10. You must complete line 10 if you are a student or researcher claiming an exemption from taxation on your scholarship or fellowship grant income under a tax treaty. You must identify the applicable treaty article. Additionally, if you are a U.S. resident alien and are relying on an exception contained in the saving clause of a tax treaty to claim exemption from taxation on your scholarship or fellowship income, you must specify the article number (or location) in the tax treaty that contains the saving clause and its exceptions. Part Ill If you check this box, you must provide the withholding agent with the required statement for income from a notional principal contract that is to be treated as income not effectively connected with the conduct of a trade or business in the United States. You should update this statement as often as necessary. A new Form W-8BEN is not required for each update provided the form otherwise remains valid. Part IV Form W-8BEN must be signed and dated by the beneficial owner of the income, or, if the beneficial owner is not an individual, by an authorized representative or officer of the beneficial owner. If Form W-8BEN is completed by an agent acting under a duly authorized power of attorney, the form must be accompanied by the power of attorney in proper form or a copy thereof specifically authorizing the agent to represent the principal in making, executing, and presenting the form. Form 2848, Power of Attorney and Declaration of Representative, may be used for this purpose. The agent, as well as the beneficial owner, may incur liability for the penalties provided for an erroneous, false, or fraudulent form . Broker transactions or barter exchanges. Income from transactions with a broker, or barter exchanges, is subject to reporting rules and backup withholding unless Form W-8BEN or a substitute form is filed to notify the broker or barter exchange that you are an exempt foreign person . You are an exempt foreign person for a calendar year in which: (1) you are a nonresident alien individual or a foreign corporation, partnership, estate, or trust; (2) you are an individual who has not been, and does not plan to be, present in the United States for a total of 183 days or more during the calendar year; and (3) you are neither engaged, nor plan to be engaged during the year, in a U.S. trade or business that has effectively connected gains from transactions with a broker or barter exchange . Paperwork Reduction Act Notice. We ask for the information on this form to carry out the Internal Revenue laws of the United States. You are required to provide the information. We need it to ensure that you are complying with these laws and to allow us to figure and collect the right amount of tax. You are not required to provide the information requested on a form that is subject to the Paperwork Reduction Act unless the form displays a valid 0MB control number. Books or records relating to a form or its instructions must be retained as long as their contents may become material in the administration of any Internal Revenue law. Generally, tax returns and return information are confidential, as required by section 6103. The time needed to complete and file this form will vary depending on individual circumstances. The estimated average time is: Recordkeeping, 5 hr., 58 min.; Learning about the law or the form, 3 hr., 46 min.; Preparing and sending the form to IRS, 4 hr., 2 min. If you have comments concerning the accuracy of these time estimates or suggestions for making this form simpler, we would be happy to hear from you. You can write to the Tax Forms Committee, Western Area Distribution Center, Rancho Cordova, CA 95743-0001. Do not send Form W-8BEN to this office . Instead, give it to your withholding agent. Page 6 lom, W-BECil Certificate of Foreign Person's Claim for Exemption From Withholding on Income Effectively Connected With the Conduct of a Trade or Business in the United States JI" S>l.x-:tion re.f.e·rencos are to the Internal Revenue Code. Iii. S.eu S-Opan:ito ins.tructio-ns. :- Givia this form to lM fliilhhokJing agent or ayar. Do not se:nd to the IRS. Noto: Pr:,1:.:;ons su.tmriWn,q ttu\ fnrm mu~,: iitc Dn Nnrt!NJl U 5. income lDx retm n Co mpmt i"ncoma CJ;:dmt•o to ho effect1vufy cmi'f.Jet:ted 1..vitil .a US. imde or bi.ts vubs (see instn.u;tfons)_ Do not us:e thfa form for. • A b(tndk-1;1( a•AT1;;,>r ~ok~/ r.:ldirni,n9 lcn.:{;i~ '.>M!.u!;. o , t:t:.iiy btil!.cic!f'il~; • A inlrn ;·nt.b::t;;d """' "''"""'" · th:'.~ dpf1/k:nt,1k'.'f r)! Ins tead, use Form· W--3.B LN Nol~~ f.!n:.:;c t'!>iicies 5ht..~lci use Form V'l~8EC1 it t1'K'/ (e,f(;Yll(HJ elft:cLlvr•ly co,wi>t:Wd i.ftcvmt• {n.cli oi9ani.utit}11 Form Instructions for Form W-8ECI (Rev. August 2001) al",:11 Department of the Treasury ~ Internal Revenue Service (Use with the December 2000 revision of Form W-8ECI.) Certificate of Foreign Person's Claim for Exemption From Withholding on Income Effectively Connected With the Conduct of a Trade or Business in the United States General Instructions Noie: For de/iniiions of lorm.s used throughout these instructions; soo Definitions on pages 2 and 3. Purpose of form, Foreign persons am generaily subject to U.S. ta,, al a 30% rate on income !hey receive from U.S. sources. However. no witr,hold,ng is requ·,rer:! on than personal services income and income requested may lead to withholding at a 30% rate {loreign person wit11holr:!ing) or the backup withholding rate. Note :. For additional information and instructions for tlie wil/1/Jofding agent, see the Instructions for the Requester of Forms W;8BEN, W-BECI, W-BEXP, and W-8/MY, Who rnustfile. You mus! give Form W-BECI to tr1e if you are a fornign person ~ ~ C('~i U',(',0 ~n .t"r, ;,) ~ Form W-8ECI (Rev. December 2000) Department of the Treasury Internal Revenue Service Certificate of Foreign Person's Claim for Exemption From Withholding on Income Effectively Connected With the Conduct of a Trade or Business in the United States ~ Section references are to the Internal Revenue Code. ~ See separate instructions. ~ Give this form to the withholding agent or payer. Do not send to the IRS. 0 MB No. 1545- 162 1 Note: Persons submitting this form must file an annual U.S. income tax return to report income claimed to be effectively connected with a U.S. trade or business (see instructions). Instead, use Form: W- 8BEN W-8 EXP Do not use this form for: • A beneficia l owner solely claiming foreign statu s or treaty benefits • A foreign governm ent. internati onal organization, foreign centra l bank of issue, foreign tax-exempt organizati on, foreign private foundation, or government of a U.S. possession claiming the applica bil ity of section(s) 11 5(2), 501 (c), 892 , 895, or 1443(b) Note: Th ese entities should use Form W-BECI if they received effectively connected income (e.g., income from commercial activities). • A foreign partn ership or a foreign tru st (unless c laiming an exemption from U.S . withho lding on inco me effec tively connected w ith the conduct of a trad e or bu siness in the United States) . • A person acting as an interm ediary . Note: See instructions for additional exceptions. W-8BEN or W-81M Y . W-81MY Identification of Beneficial Owner (See instru ctions.) Name of individual or org anization that is th e benefi cial own er 2 Country of incorporation or org anization 3 Type of entity (check th e appropri ate box): D Individual D Partnership D Governm ent D Private foundati on D Simple trust or grantor trust D International organization D Corporati on D Complex trust D Central bank of issue D Disregarded entity D Estate D Tax -exempt organization 4 Perm anent residence address (street. apt. or suite no., or rural route). Do not use a P.O. box. City or town, state or province. Include postal cod e where appropriate. Country (do not abbrevi ate) 5 Business address in the United States (street, apt. or suite no., or rural route). Do not use a P.O. box. City or town, state, and ZIP cod e 6 U.S . taxpayer identifi cati on number (required-see instructi ons) 7 Foreign tax identifying number, if any (optiona l) 8 Reference number(s) (see instru ction s) D SSN or ITIN D EIN 9 Specify ea ch item of income that is, or is expected to be, received from the payer that is effectively connected w ith the conduct of a tra de or bu siness in the United States . __ . ___ . _. __ . _______ . __ .. . . . . __ . . ... __ .... . _. ___ . ____ . .. .. . . .. . . _. __ .... .... . .. . . . .. ..... . . .. _. _ . ... . .. ... . .. . Certification Under penalties of perj ury, I declare that I have exam ined the information on this form and to the best of my knowledge and belief it is true, correct and complete. I further certify under penalties of perj ury that: • • The am ounts for which thi s certification is provided are effectively connected w ith th e conduct of a trade or bu siness in the United States I am the benefi cial owner (or I am authori zed to sign for the benefi cial owner) of all the income to which thi s form re lates, and are includi ble in my gross income (or the benefi cial owner' s gross income) for the taxa ble year, and • The benefi cial owner is not a U.S. person. Furtherm ore, I authori ze this form to be provided to any withholding agent that has control, receipt, or custody of the income of which I am the benefi cial owner or any withholding agent th at ca n disburse or make payments of the income of which I am the benefi cial owner. Sign Here Signature of benefi cial owner (or individual authorized to sign for the benefi cial owner) Date (MM-DD- YYYY) Ca pa city in which acting For Paperwork Reduction Act Notice, see separate instructions. Cat. No. 25045D Form W-8ECI (Rev. 12-2000) ~I ;;>~1<.'l'H(, ~>l"'J I'.'.~ Application for Employer [Identification Number (For l..t!i~J. by omployers, corporations , pa.rtnen.hips, tru sts, os-tates, Churches, go't!em.m(!n t a~1oncio'!i , lnd i.un tribal ·entlti@s, C'3ortain individual s, and other s.) EIN -.. SE'..i:o ~8-patate instructions for each line. .,_ K0ep a -copy for your recOfds.. ~ ~ O f -4-a_ \i_l,_tJi,-,ll-l(J- <-~d-rJ-i"e-s -'.;. _k_o,-;y-;;,- ,:-1p_l _, ,-.,t~-"il.-l/ -{1-(,- ,-1n-d- ,--ti-t~;,-) l-. -o,-- j-) _(;- .,-. ,-J~-i x--,) r-£-a-,-·;1-1-;:>"""-:;-I ,-'.!(-kJ-r..,,-~i,--i~-li-1 ,-f:-ff(_,g_i1r_n_;. l~J)-(i- ~t-o-, -t ~- ,-(1,- ,-, -p .-U-. -h,.-.ix-·. :- - - - - - - -- - - - - -+ - - - - - - - - - - - - - - - - - - ·§ 1---- - - - - -- .. a. o f - - - - - - - - -- - -- - -- -- - - - - ' - - - - - - - - - - - - - - - -- - - -- - - - ~ 6 "' 1- >----- - --- - ------ ------~-------- --------- - ---- c:.::m-oty .,mu '<-ltati:ci {S$N or .:focndr.nl) P\ni <)d1n~1i~tf<>lrn 1S"SNt IH/>t {SSN nf 9~w1<./I N,:i.io:M i ( \ mid F;.!i:tK1~, ' t.{lf,P!ir;:1ti•;t;· 0 D St.nt.:,,;J'!m;af g~<\·t-r r;n.,.[n! 1"-eder;:,i l _(j:.i~uF,lt'J!'!!/;nFil, I- 3 Exec uto r. tru st ee, " care of " nam e Sb City, st ate, and ZIP code 4b City, st ate, and ZIP code 7a Name of princ ipal offi cer, general partn er, grantor, owner, or trustor I 7b SS N, ITIN , or EIN Ba Type of entity (c heck only one box) · D Sole proprietor (SS N) D Partn ership D Corporation (enter form num ber to be fil ed) .,.. D Personal servic e corp . D Churc h or c hurc h-controlled orga nizatio n D Other nonprofit organi zatio n (spec ify) .,.. - - - - - - - - - - - - Group Exemption Number (G EN) .,.. D Oth er (s ecif ) .,.. If a corp oration , name the st ate o r foreign c ountry State (if applica ble) w here in corporat ed D Estate (S SN of d ecedent) D Plan admini strator (SS N) D Tru st (SSN of grantor) D National Guard D Farmers ' cooperati ve D Federal government/military D REMIC D St ate/loca l government Foreign country D Indian tri bal governm ents/enterpri ses Reason for applying (chec k o nly o ne box) D Start ed new bu siness (spec ify type) .,.. ____ _ D Hired employees (C hec k the box and see line 12.) D Compliance w ith IRS withholding regulations D Oth er (specify) .,.. Date bu siness started or acquired (month , day, year) D Banking purpose (specify pur po se) .,.. D Ch anged type of organization (spec ify new type) .,.. _______ _ D Purc hased going business D Crea ted a tru st (specify type) .,.. D Creat ed a pension plan (spec ify ty pe) .,.. ___________ _ 11 Closing m o nth of accounting y ear First d ate wages or annu ities were paid or w ill be paid (mont h, d ay, year). Note: if applicant is a withholding agent, enter date income will first be paid to nonresident alien. (month, day, y ear) . . . .,.. High est number of employ ees ex pected in the next 12 m o nth s. Note: If the applicant does not . . .,.. expect to have any employees during the p eriod, enter "-0-. " . Agric ult ural Hou se hold Ot her Chec k one box that best describes the principal activity of your bu siness. D Construction D Rental & leasing D Transportation & warehousing D Rea l estate D Manufacturing D Finance & insurance D Hea lth care & social assistance D Wholesale-agent/broker D Accommodation & food service D Wholesale- other D Reta il D Other (specify) Bb 9 10 12 13 14 15 Ind icat e principal line of m erc hand ise sold; specific con struc tion work don e; produc ts prod uced ; or services provided . 16a Has t he app lica nt ever applied for an employer identification num ber for this or any other business? . Note: If "Yes," please complete lines 16b and 16c. . . D Yes D No 16b If you c hecked "Yes" on lin e 16a, give appl ica nt 's legal name and trad e name show n on pri or application if different from line 1 or 2 above. Legal name .,.. Trad e nam e .,.. 16c A pproximate d at e w hen, and c ity and state w here, the ap plicat ion was fil ed. Enter previou s employer identificati on number if known. Approximate date when fil ed (mo., day. year) I City and state where fil ed I Previous :E IN Complete this section only if you wan t to authorize the named individua l to receive the entity's EIN and answer questions about the completion of this form. Designee·s name Third Party Designee Add ress and ZIP code Under penalties of perj ury. I declare that I have examined this application. and to the best of my knowledge and belief, it is true. correct. and complete. - if///, Name and title (type or print clearly) .,.. Applicant's telephone number !include area code) ( Applicant's fax number (include area code) ) ~ Signature .,.. Date .,.. ( ) For Privacy Act and Paperwork Reduction Act Notice, see separate instructions. Cat. No. 16055 N Form SS-4 (Rev. 12-2001) Designee's telephone number !include area code) ( Designee's fax number (include area code) ) Changed type of organization Purcha sed a going business3 Created a trust Form SS-4 (Rev. 12-2001) Pa e 2 Do I Need an EIN? File Form SS-4 if th e applicant entity does not already have an EIN but is required to show an EIN on any return, statement, or other document.' See also the separate instructions for each line on Form SS-4. IF the applicant ... AND ... THEN ... Started a new business Does not currently have (nor expect to have) employees Complete lines 1, 2, 4a-6, Sa, and 9-16c. Hired (or w ill hire) employees, including household employees Does not already have an EIN Complete lines 1, 2, 4a-6, 7 a-b (if appl icable), Sa, Sb (if applicable), and 9-16c. Opened a bank account Needs an EIN for banking purposes only Complete lines 1-5b, 7a-b (if applicable) , Sa, 9, and 16a-c. Complete lines 1-16c (as applicable). Either th e legal character of the organization or its ownership changed (e.g., you incorporate a sole proprietorship or form a partnership) 2 Does not already have an EIN Comp lete lines 1-16c (as applicable). The trust is other than a grantor trust or an IRA trust4 Complete lines 1-16c (as applicable). Created a pension plan as a plan administrator5 Needs an EIN for reporting purposes Complete lines 1, 2, 4a-6, Sa , 9, and 16a-c. Is a foreign person needing an EIN to comply with IRS withholding regulations Needs an EIN to complete a Form W-8 (other than Form W-SECI), avoid withholding on portfolio assets, or claim tax treaty benefits6 Complete lines 1-5b, 7a-b (SSN or ITIN optional), Sa-9, and 16a-c. Is adm ini stering an estate Needs an EIN to report estate income on Form 1041 Complete lines 1, 3, 4a-b, Sa, 9, and 16a-c. Is a withholding agent for taxes on non-wage income paid to an alien (i.e., individual, corporation, or partnership, etc .) Is a state or local agency Is a single-member LLC Is an S corporation Is an agent, broker, fiduciary, manager, tenant, Complete lines 1, 2, 3 (if applicable), 4a-5b, or spouse who is req uired to fi le Form 1042, Annual Withholding Tax Return for U.S. Source Income of Foreign Persons 7a-b (if applicable), Sa , 9, and 16a-c. Serves as a tax reporting agent for public assistance recipients under Rev. Proc. 80-4, 1980-1 C.B. 581 7 Needs an EIN to file Form 8832, Classification Election, for filing emplo~ment tax returns, or for state reportinq purposes Needs an EIN to file Form 2553, Election by a Small Business Corporation 9 Complete lines 1, 2, 4a-5b, Sa, 9, and 16a-c. Complete lines 1-16c (as applicable). Complete lines 1-16c (as applicable). 1 For example, a sole proprietorshi p or self- employed farm er who establishes a qualified retirement plan, or is required to fi le excise. employment. alcohol, tobacco, or firearms returns, must have an EIN . A partnership, corporation, REMIC (real estate mortgage investment conduit), nonprofit organization (church, club, etc.), or farmers' cooperative must use an EIN for any tax-related purpose even if the entity does not have employees. ' However, do not apply for a new EIN if the existing entity only (a) changed its business name, (b) elected on Form 8832 to change the way it is ta xed (or is covered by the default rules) . or (cl terminated its partnership statu s because at least 50% of the total interests in partnership capital and profits were sold or exchanged within a 12-month period. (The EIN of the terminated partnership should continue to be used. See Regulations section 301.6109-1(d)(2)(iii).) 3 Do not use the EIN of the prior business unless you became the "owner" of a corporation by acquiring its stock. ' However, IRA trusts that are required to file Form 990-T, Exempt q rgani zation Business Income Tax Return, must have an EIN. 5 A plan administrator is the person or group of persons specifi ed as the admini strator by the instrument under which the plan is operated. 6 Entities applying to be a Qualified Intermediary (QI) need a QI-E IN even if they already have an EIN. See Rev. Proc. 2000-12. 7 See also Household employer on page 4. (Note: State or local agencies may need an EIN for other reasons, e.g., hired employees.) 8 Most LLCs do not need to file Form 8832 . See Limited liability company (LLC) on page 4 for details on completing Form SS-4 for an LLC . 9 An existing corporation that is electing or revoking S corporation status should use its previously-assigned EIN. Instructions for Form SS-4 (Rev. December 2001) Application for Employer Identification Number Section references are to the Internal Revenue Code unless otherwise noted. ~~ Department of the Treasury f&JJI Internal Revenue Service General Instructions Use these instructions to complete Form SS-4, Application for Employer Identification Number. Also see Do I Need an EIN? on page 2 of Form SS-4. Purpose of Form Use Form SS-4 to apply for an employer identification number (EIN). An EIN is a nine-digit number (for example, 12-3456789) assigned to sole proprietors, corporations, partnerships, estates, trusts, and other entities for tax filing and reporting purposes. The information you provide on this form will establish your business tax account. m An EIN is for use in connection with your business activities only. Do not use your EIN in place of your social security number (SSN). File only one Form SS-4. Generally, a sole proprietor should file only one Form SS-4 and needs only one EIN, regardless of the number of businesses operated as a sole proprietorship or trade names under which a business operates. However, if the proprietorship incorporates or enters into a partnership, a new EIN is required. Also, each corporation in an affiliated group must have its own EIN. EIN applied for, but not received. If you do not have an EIN by the time a return is due, write "Applied For" and the date you applied in the space shown for the number. Do not show your social security number (SSN) as an EIN on returns. If you do not have an EIN by the time a tax deposit is due, send your payment to the Internal Revenue Service Center for your filing area as shown in the instructions for the form that you are are filing . Make your check or money order payable to the "United States Treasury" and show your name (as shown on Form SS-4), address, type of tax, period covered, and date you applied for an EIN . Related Forms and Publications The following forms and instructions may be useful to filers of Form SS-4: • Form 990-T, Exempt Organization Business Income Tax Return • Instructions for Form 990-T • Schedule C (Form 1040), Profit or Loss From Business • Schedule F (Form 1040), Profit or Loss From Farming • Instructions for Form 1041 and Schedules A, B, D, G, I, J, and K-1, U.S. Income Tax Return for Estates and Trusts • Form 1042, Annual Withholding Tax Return for U.S. Source Income of Foreign Persons • Instructions for Form 1065, U.S. Return of Partnership Income • Instructions for Form 1066, U.S. Real Estate Mortgage Investment Conduit (REMIC) Income Tax Return • Instructions for Forms 1120 and 1120-A • Form 2553, Election by a Small Business Corporation • Form 2848, Power of Attorney and Declaration of Representative • Form 8821, Tax Information Authorization • Form 8832, Entity Classification Election For more information about filing Form SS-4 and related issues, see: • Circular A, Agricultural Employer's Tax Guide (Pub. 51) • Circular E, Employer's Tax Guide (Pub. 15) • Pub. 538, Accounting Periods and Methods • Pub. 542, Corporations • Pub. 557, Exempt Status for Your Organization • Pub. 583, Starting a Business and Keeping Records • Pub. 966, EFTPS: Now a Full Range of Electronic Choices to Pay All Your Federal Taxes • Pub. 1635, Understanding Your EIN • Package 1023, Application for Recognition of Exemption • Package 1024, Application for Recognition of Exemption Under Section 501 (a) How To Get Forms and Publications Phone. You can order forms, instructions, and publications by phone 24 hours a day, 7 days a week. Just call 1-800-TAX-FORM (1-800-829-3676). You should receive your order or notification of its status within 10 workdays. Personal computer. With your personal computer and modem , you can get the forms and information you need using the IRS Web Site at www.irs.gov or File Transfer Protocol at ftp.irs.gov. CD-ROM. For small businesses, return preparers, or others who may frequently need tax forms or publications, a CD-ROM containing over 2,000 tax products (including many prior year forms) can be purchased from the National Technical Information Service (NTIS) . To order Pub. 1796, Federal Tax Products on CD-ROM, call 1-877-CDFORMS (1-877-233-6767) toll free or connect to www.irs.gov1cdorders. Cat. No. 62736F Tax Help for Your Business IRS-sponsored Small Business Workshops provide information about you r Federal and state tax obligations. For information about workshops in your area, call 1-800-829-1040 and ask for your Taxpayer Education Coordinator. How To Apply You can apply for an EIN by telephone , fax , or mail depending on how soon you need to use the EIN . Application by Tele-TIN . Under the Tele-TIN program, you can receive your EIN by telephone and use it immediately to file a return or make a payment. To receive an EIN by telephone, IRS suggests that you complete Form SS-4 so that you will have all relevant information available. Then call the Tele-TIN number at 1-866-816-2065. (International applicants must call 215-516-6999.) Tele-TIN hours of operation are 7:30 a.m. to 5:30 p.m . The person making the call must be authorized to sign the form or be an authorized designee. See Signature and Third Party Designee on page 6. Also see the TIP below. An IRS representative will use the information from the Form SS-4 to establish your account and assign you an EIN. Write the number you are given on the upper right corner of the form and sign and date it. Keep this copy for your records . If requested by an IRS representative, mail or fax (facsimile) the signed Form SS-4 (i ncluding any Th ird Party Designee authorization) within 24 hours to the Tele-TIN Unit at the service center address provided by the IRS representative. S Taxpayer representatives can use Tele-TIN to apply for an EIN on behalf of their client and request that the EIN be faxed to their client on the same day. (Note: By utilizing this procedure, you are authorizing the IRS to fax the EIN without a cover sheet.) Application by Fax-TIN. Under the Fax-TIN program, you can rece ive your EIN by fax within 4 business days. Complete and fax Form SS-4 to the IRS using the Fax-TIN number listed below for your state. A long-distance charge to ca llers outside of the local calling area wi ll apply. Fax-TIN numbers can only be used to apply for an EIN. The numbers may change without notice. Fax-TIN is available 24 hours a day, 7 days a week. Be sure to provide your fax number so that IRS can fax the EIN back to you . (Note: By utilizing this procedure, you are authorizing the IRS to fax the EIN without a cover sheet.) Do not call Tele-TIN for the same entity because duplicate EINs may be issued. See Third Party Designee on page 6. Application by mail. Comp lete Form SS-4 at least 4 to 5 weeks before you will need an EIN . Sign and date the application and mail it to the service center address for your state . You will receive your EIN in the mail in approximately 4 weeks . See also Third Party Designee on page 6. -2- Call 1-800-829-1040 to verify a number or to ask about the status of an application by mail. If your principal business, office or agency, or legal residence in the case of an individual, is located in: Call the Tele-TIN or Fax-TIN number shown or file with the "Internal Revenue Service Center" at: Connecticut, Delaware, District of Columbia, Florida, Georgia, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, North Carolina , Ohio, Pennsylvania, Rhode Island, South Carolina, Vermont, Virginia, West Virginia Illinois, Indiana , Kentucky, Michigan Alabama, Alaska, Arizona , Arkansas, California, Colorado, Hawaii, Idaho, Iowa , Kansas, Lou isiana , Minnesota, Mississippi , Missouri, Montana, Nebraska, Nevada, New Mexico, North Dakota , Oklahoma, Oregon, Puerto Rico, South Dakota , Tennessee, Texas, Utah, Washington, Wisconsin, Wyoming Attn: EIN Operation Holtsville, NY 00501 Tele-TIN 866-816-2065 Fax-TIN 631-447-8960 Attn: EIN Operation Cincinnati , OH 45999 Tele-TIN 866-816-2065 Fax-TIN 859-669-5760 Attn: EIN Operation Phi ladelphia, PA 19255 Tele-Tl N 866-816-2065 Fax-TIN 215-516-3990 If you have no legal residence, principal place of business, or principal office or agency in any state: Attn: EIN Operation Philadelphia, PA 19255 Tele-TIN 215-516-6999 Fax-TIN 215-516-3990 Specific Instructions Print or type all entries on Form SS-4. Follow the instructions for each line to expedite processing and to avoid unnecessary IRS requests for additional information. Enter "N/A" (nonapplicable) on the lines that do not apply. Line 1-Legal name of entity (or individual) for whom the EIN is being requested. Enter the legal name of the entity (or individual) applying for the EIN exactly as it appears on the social security card, charter, or other applicable legal document. Individuals. Enter your first name, middle initial, and last name. If you are a sole proprietor, enter your individual name, not your business name. Enter your business name on line 2. Do not use abbreviations or nicknames on line 1. Trusts. Enter the name of the trust. Estate of a decedent. Enter the name of the estate. Partnerships. Enter the legal name of the partnership as it appears in the partnership agreement. Corporations. Enter the corporate name as it appears in the corporation charter or other legal document creating it. Plan administrators. Enter the name of the plan administrator. A plan administrator who already has an EIN should use that number. Line 2-Trade name of business. Enter the trade name of the business if different from the legal name. The trade name is the "doing business as " (OBA) name. m Use the full legal name shown on line 1 on all tax returns filed for the entity. (However, if you enter a trade name on line 2 and choose to use the trade name instead of the legal name, enter the trade name on all returns you file.) To prevent processing delays and errors, always use the legal name only (or the trade name only) on all tax returns. Line 3-Executor, trustee, "care of" name. Trusts enter the name of the trustee. Estates enter the name of the executor, administrator, or other fiduciary. If the entity applying has a designated person to receive tax information, enter that person's name as the "care of" person . Enter the individual 's first name, middle initial , and last name. Lines 4a-b-Mailing address. Enter the mailing address for the entity's correspondence . If line 3 is completed, enter the address for the executor, trustee or "care of' person. Generally, this address will be used on all tax returns. 8 File Form 8822, Change of Address, to report any subsequent changes to the entity's mailing address. Lines Sa-b-Street address. Provide the entity's physical address only if different from its mailing address shown in lines 4a-b. Do not enter a P.O. box number here. Line 6-County and state where principal business is located. Enter the entity's primary physical location. Lines 7a-b-Name of principal officer, general partner, grantor, owner, or trustor. Enter the first name, middle initial, last name, and SSN of (a) the principal officer if the business is a corporation, (b) a general partner if a partnership, (c) the owner of an entity that is disregarded as separate from its owner (disregarded entities owned by a corporation enter the corporation 's name and EIN) , or (d) a grantor, owner, or trustor if a trust. If the person in question is an alien individual with a previously assigned individual taxpayer identification number (ITIN), enter the ITIN in the space provided and submit a copy of an official identifying document. If necessary, complete Form W-7, Application for IRS Individual Taxpayer Identification Number, to obtain an ITIN. You are required to enter an SSN, ITIN, or EIN unless the only reason you are applying for an EIN is to make an entity classification election (see Regulations section 301 .7701-1 through 301 .7701-3) and you are a nonresident al ien with no effectively connected income from sources within the United States. -3- Line Ba-Type of entity. Check the box that best describes the type of entity applying for the EIN. If you are an alien individual with an ITIN previously assigned to you , enter the ITIN in place of a requested SSN. m This is not an election for a tax classification of an entity. See "Limited liability company (LLC)" on page 4. Other. If not specifically mentioned , check the " Other" box, enter the type of entity and the type of return , if any, that will be filed (for example, "Common Trust Fund, Form 1065" or "Created a Pension Plan"). Do not enter "N/A." If you are an alien individual applying for an EIN , see the Lines 7a-b instructions above. • Household employer. If you are an individual, check the "Other" box and enter "Household Employer" and your SSN. If you are a state or local agency serving as a tax reporting agent for public assistance recipients who become household employers, check the "Other" box and enter " Household Employer Agent." If you are a trust that qualifies as a household employer, you do not need a separate EIN for reporting tax information relating to household employees; use the EIN of the trust. • QSub. For a qualified subchapter S subsidiary (QSub) check the "Other" box and specify " QSub." • Withholding agent. If you are a withholding agent required to file Form 1042, check the " Other" box and enter "Withholding Agent. " Sole proprietor. Check this box if you file Schedule C, C-EZ, or F (Form 1040) and have a qualified plan , or are required to file excise, employment, or alcohol, tobacco, or firearms returns , or are a payer of gambling winnings. Enter your SSN (or ITIN) in the space provided. If you are a nonresident alien with no effectively connected income from sources within the United States, you do not need to enter an SSN or ITIN. Corporation. This box is for any corporation other than a personal service corporation. If you check this box, enter the income tax form number to be filed by the entity in the space provided . m If you entered "1120S" after the "Corporation " checkbox, the corporation must file Form 2553 no later than the 15th day of the 3rd month of the tax year the election is to take effect. Until Form 2553 has been received and approved, you will be considered a Form 1120 filer. See the Instructions for Form 2553. Personal service corp. Check this box if the entity is a personal service corporation. An entity is a personal service corporation for a tax year only if: • The principal activity of the entity during the testing period (prior tax year) for the tax year is the performance of personal services substantially by employee-owners, and • The employee-owners own at least 10% of the fair market value of the outstanding stock in the entity on the last day of the testing period. Personal services include performance of services in such fields as health, law, accounting, or consulting . For more information about personal service corporations , see the Instructions for Forms 1120 and 1120-A and Pub. 542. Other nonprofit organization. Check this box if the nonprofit organization is other than a church or church-controlled organization and specify the type of nonprofit organization (for example, an educational organization). m If the organization also seeks tax-exempt status, you must file either Package 1023 or Package 1024. See Pub. 557 for more information. If the organization is covered by a group exemption letter, enter the four-digit group exemption number (GEN). (Do not confuse the GEN with the nine-digit EIN.) If you do not know the GEN, contact the parent organization. Get Pub. 557 for more information about group exemption numbers. Plan administrator. If the plan administrator is an individual , enter the plan administrator's SSN in the space provided. REMIC. Check this box if the entity has elected to be treated as a real estate mortgage investment conduit (REMIC). See the Instructions for Form 1066 for more information . Limited liability company (LLC). An LLC is an entity organized under the laws of a state or foreign country as a limited liability company. For Federal tax purposes, an LLC may be treated as a partnership or corporation or be disregarded as an entity separate from its owner. By default, a domestic LLC with only one member is disregarded as an entity separate from its owner and must include all of its income and expenses on the owner's tax return (e.g., Schedule C (Form 1040)). Also by default, a domestic LLC with two or more members is treated as a partnership. A domestic LLC may file Form 8832 to avoid either default classification and elect to be classified as an association taxable as a corporation . For more information on entity classifications (including the rules for foreign entities), see the instructions for Form 8832. m Do not file Form 8832 if the LLC accepts the default classifications above. However, if the LLC will be electing S Corporation status, it must timely file both Form 8832 and Form 2553. Complete Form SS-4 for LLCs as follows: • A single-member, domestic LLC that accepts the default classification (above) does not need an EIN and generally should not file Form SS-4. Generally, the LLC should use the name and EIN of its owner for all Federal tax purposes. However, the reporting and payment of employment taxes for employees of the LLC may be made using the name and EIN of either the owner or the LLC as explained in Notice 99-6, 1999-1 C.B . 321 . You can find Notice 99-6 on page 12 of Internal Revenue Bulletin 1999-3 at www.irs.gov. (Note: If the LLC-applicant indicates in box 13 that it has employees or expects to have employees, the owner (whether an individual or other entity) of a single-member domestic LLC will also be assigned its own EIN (if it does not -4- already have one) even if the LLC will be filing the employment tax returns.) • A single-member, domestic LLC that accepts the default classification (above) and wants an EIN for filing employment tax returns (see above) or non-Federal purposes, such as a state requirement, must check the "Other" box and write "Disregarded Entity" or, when applicable, "Disregarded Entity-Sole Proprietorship" in the space provided . • A multi-member, domestic LLC that accepts the default classification (above) must check the "Partnership" box. • A domestic LLC that will be filing Form 8832 to elect corporate status must check the "Corporation" box and write in "Single-Member" or "Multi-Member" immediately below the "form number" entry line . Line 9-Reason for applying. Check only one box. Do not enter "N/A." Started new business. Check this box if you are starting a new business that requires an EIN . If you check this box, enter the type of business being started. Do not apply if you already have an EIN and are only adding another place of business . Hired employees. Check this box if the existing business is requesting an EIN because it has hired or is hiring employees and is therefore required to file employment tax returns . Do not apply if you already have an EIN and are only hiring employees. For information on employment taxes (e.g., for family members), see Circular E. m You may be required to make electronic deposits of all depository taxes (such as employment tax, excise tax, and corporate income tax) using the Electronic Federal Tax Payment System (EFTPS) . See section 11, Depositing Taxes, of Circular E and Pub. 966. Created a pension plan. Check this box if you have created a pension plan and need an EIN for reporting purposes. Also, enter the type of plan in the space provided. S Check this box if you are applying for a trust EIN when a new pension plan is established. In addition, check the "Other" box in line Ba and write "Created a Pension Plan " in the space provided. Banking purpose. Check this box if you are requesting an EIN for banking purposes only, and enter the banking purpose (for example, a bowling league for depositing dues or an investment club for dividend and interest reporting). Changed type of organization. Check this box if the business is changing its type of organization. For example, the business was a sole proprietorship and has been incorporated or has become a partnership. If you check this box, specify in the space provided (including available space immediately below) the type of change made. For example, " From Sole Proprietorship to Partnership. " Purchased going business. Check this box if you purchased an existing business. Do not use the former owner's EIN unless you became the "owner" of a corporation by acquiring its stock. Created a trust. Check this box if you created a trust, and enter the type of trust created. For example, indicate if the trust is a nonexempt charitable trust or a split-interest trust. Exception. Do not file this form for certain granter-type trusts. The trustee does not need an EIN for the trust if the trustee furnishes the name and TIN of the granter/owner and the address of the trust to all payors. See the Instructions for Form 1041 for more information . 8 Do not check this box if you are applying for a trust EIN when a new pension plan is established. Check "Created a pension plan." Other. Check this box if you are requesting an EIN for any other reason; and enter the reason . For example, a newly-formed state government entity should enter "Newly-Formed State Government Entity" in the space provided . Line 10-Date business started or acquired. If you are starting a new business, enter the starting date of the business. If the business you acquired is already operating, enter the date you acquired the business. Trusts should enter the date the trust was legally created. Estates should enter the date of death of the decedent whose name appears on line 1 or the date when the estate was legally funded. Line 11-Closing month of accounting year. Enter the last month of your accounting year or tax year. An accounting or tax year is usually 12 consecutive months, either a calendar year or a fiscal year (including a period of 52 or 53 weeks). A calendar year is 12 consecutive months ending on December 31. A fiscal year is either 12 consecutive months ending on the last day of any month other than December or a 52-53 week year. For more information on accounting periods, see Pub. 538. Individuals. Your tax year generally will be a calendar year. Partnerships. Partnersh ips must adopt one of the following tax years : • The tax year of the majority of its partners, • The tax year common to all of its principal partners, • The tax year that results in the least aggregate deferral of income, or • In certain cases, some other tax year. See the Instructions for Form 1065 for more information. REM/Cs. REM I Cs must have a calendar year as their tax year. Personal service corporations. A personal service corporation generally must adopt a calendar year unless: • It can establish a business purpose for having a different tax year, or • It elects under section 444 to have a tax year other than a calendar year. Trusts. Generally, a trust must adopt a calendar year except for the following: • Tax-exempt trusts, • Charitable trusts, and • Granter-owned trusts. Line 12- First date wages or annuities were paid or will be paid. If the business has or will have employees, enter the date on which the business began or will begin to pay wages . If the business does not plan to have employees, enter "N/A." Withholding agent. Enter the date you began or will begin to pay income (including annuities) to a nonresident alien . This also applies to individuals who are required to file Form 1042 to report alimony paid to a nonresident alien. Line 13-Highest number of employees expected in the next 12 months. Complete each box by entering the number (including zero ("-0-")) of "Agricultural ," "Household," or "Other" employees expected by the applicant in the next 12 months. For a definition of agricultural labor (farmwork), see Circular A. Lines 14 and 15. Check the one box in line 14 that best describes the principal activity of the applicant's business. Check the "Other" box (and specify the applicant's principal activity) if none of the listed boxes applies. Use line 15 to describe the applicant's principal line of business in more detail. For example, if you checked the "Construction" box in line 14, enter additional detail such as "General contractor for residential buildings" in line 15. r.::::, Do not complete lines 14 and 15 if you entered ~ zero "(-0-)" in line 13. Construction. Check this box if the applicant is engaged in erecting buildings or other structures, (e.g., streets, highways, bridges, tunnels) . The term "Construction" also includes special trade contractors, (e.g., plumbing, HVAC, electrical, carpentry, concrete, excavation, etc. contractors) . Real estate. Check this box if the applicant is engaged in renting or leasing real estate to others; managing, selling, buying or renting real estate for others; or providing related real estate services (e.g., appraisal services). Rental and leasing. Check this box if the applicant is engaged in providing tangible goods such as autos, computers, consumer goods, or industrial machinery and equipment to customers in return for a periodic rental or lease payment. Manufacturing. Check this box if the applicant is engaged in the mechanical, physical, or chemical transformation of materials, substances, or components into new products. The assembling of component parts of manufactured products is also considered to be manufacturing . Transportation & warehousing. Check this box if the applicant provides transportation of passengers or cargo ; warehousing or storage of goods; scenic or sight-seeing transportation; or support activities related to these modes of transportation . Finance & insurance. Check this box if the applicant is engaged in transactions involving the creation, liquidation, or change of ownership of financial assets and/or facilitating such financial transactions; -5- underwriting annuities/insurance policies; facilitating such underwriting by selling insurance policies; or by providing other insurance or employee-benefit related services. Health care and social assistance. Check this box if the applicant is engaged in providing physical, medical, or psychiatric care using licensed health care professionals or providing social assistance activities such as youth centers, adoption agencies, individual/ family services, temporary shelters, etc. Accommodation & food services. Check this box if the applicant is engaged in providing customers with lodging, meal preparation, snacks, or beverages for immediate consumption . Wholesale-agent/broker. Check this box if the applicant is engaged in arranging for the purchase or sale of goods owned by others or purchasing goods on a commission basis for goods traded in the wholesale market, usually between businesses. Wholesale-other. Check this box if the applicant is engaged in selling goods in the wholesale market generally to other businesses for resale on their own account. Retail. Check this box if the applicant is engaged in selling merchandise to the general public from a fixed store; by direct, mail-order, or electronic sales; or by using vending machines. Other. Check this box if the applicant is engaged in an activity not described above. Describe the applicant's principal business activity in the space provided. Lines 16a-c. Check the applicable box in line 16a to indicate whether or not the entity (or individual) applying for an EIN was issued one previously. Complete lines 16b and 16c only if the "Yes" box in line 16a is checked . If the applicant previously applied for more than one EIN, write "See Attached" in the empty space in line 16a and attach a separate sheet providing the line 16b and 16c information for each EIN previously requested. Third Party Designee. Complete this section only if you want to authorize the named individual to receive the entity's EIN and answer questions about the completion of Form SS-4. The designee's authority terminates at the time the EIN is assigned and released to the designee. You must complete the signature area for the authorization to be valid. Signature. When required, the application must be signed by (a) the individual , if the applicant is an individual, (b) the president, vice president, or other principa~ officer, if the applicant is a corporation, (c) a responsible and duly authorized member or officer having knowledge of its affairs, if the applicant is a partnership, government entity, or other unincorporated organization, or (d) the fiduciary, if the applicant is a trust or an estate. Foreign applicants may have any duly-authorized person, (e.g., division manager), sign Form SS-4. Privacy Act and Paperwork Reduction Act Notice. We ask for the information on this form to carry out the Internal Revenue laws of the United States. We need it to comply with section 6109 and the regulations thereunder which generally require the inclusion of an employer identification number (EIN) on certain returns, statements, or other documents filed with the Internal Revenue Service. If your entity is required to obtain an EIN, you are required to provide all of the information requested on this form. Information on this form may be used to determine which Federal tax returns you are required to file and to provide you with related forms and publications . We disclose this form to the Social Security Administration for their use in determining compliance with applicable laws. We may give this information to the Department of Justice for use in civil and criminal litigation, and to the cities, states, and the District of Columbia for use in administering their tax laws . We may also disclose this information to Federal, state, or local agencies that investigate or respond to acts or threats of terrorism or participate in intelligence or counterintelligence activities concerning terrorism. We will be unable to issue an EIN to you unless you provide all of the requested information which applies to your entity. Providing false information could subject you to penalties. You are not required to provide the information requested on a form that is subject to the Paperwork Reduction Act unless the form displays a valid 0MB control number. Books or records relating to a form or its instructions must be retained as long as their contents may become material in the administration of any Internal Revenue law. Generally, tax returns and return information are confidential, as required by section 6103. The time needed to complete and file this form will vary depending on individual circumstances. The estimated average time is: Recordkeeping . ...... . .. . . ... . . ... . .. . Learning about the law or the form .. .. .. .. . Preparing the form . . ...... . . . . .. . . . . .. . Copying, assembling, and sending the form to the IRS . .. . . .. ....... ... .. .. ........ . 6 min. 22 min. 46 min . 20 min . If you have comments concerning the accuracy of these time estimates or suggestions for making this form simpler, we would be happy to hear from you . You can write to the Tax Forms Committee, Western Area Distribution Center, Rancho Cordova, CA 95743-0001 . Do not send the form to this address. Instead , see How To Apply on page 2. -6- '"°'' W-SEXP 1$'.rsm11i t 1,:,: tt t~m 't n ii','.>'Nl) I¢ ':.Ii! ¥'-<: !! Certificate of Foreign Government or Other Foreign Or ganization for United States Tax Withholdin g {For use· by foreign government!>,. in ternational organiz.:a.tions , fo reign c entral banks. or issu e, for0"ign t.ur-(flt.empt organiza tions, foreiq:n prl 11ate fourn1alions, and governments o f U.S. po$S!!-S!>ion See 'Separate im;truc.tion.s . ... Give thts form to tho withhoiding a,go;nt or payer. Oo not sond to the ms. Do hot us.u this rorrr; tor: • l\ IJ1.N1rri ciiil rwmi::~ :mi;,()" ;.:l,:1imintt rc-r<:.~i9n ~'>tal.v5 {)<'" ir.1:., e1Iy- hemd:!: •• • • • /1 !01·t:i\F1 pnnrn,1 '.~hip {)r a f;:-_11e i~p 1, u•,;t • _ • • • • • . • • _ . _ • • _ . _ . • • _ _ _ . • • • • _ <:t:·1 t!X1.Hq,Ut:ri1 from U-5 . 'Nithlv.lldin~; o n incrn n""~ r:fh-_it:Uvf?( con.n~~1 .. :l<1li with tt~ u:;nduct /i. !)iff~m a<:t1nq ,;si; .'.m ,nttf rrndi:m y In t.l!.:!~ Ur.iHt;,,.1 ~-~,tatf:i:;. _ • . • _ . • • . . . . _ . _ . . . . • • • . _ Identification of Benefici al Owner I.See in;,tructitms I \N-.SBLN 0 1 \V-BEC ·w.sm.N W-1:lHE N f 11 \ V-ff!MY \:\' -8LG' W· Hil\,1 \' D h":,r0lgn tt,Hix,~mp{ Df{Jt,1'!iH :t.t:":.n D h :>i,'!i\)i'I ptfo ,W• ft.\<;,il 1,t.H ~~ Instructions for Form W-8EXP (Rev. August 2001) . . . . . Deparm1enl of the Treasu ry ~ Internal Revenue Service (U se with the December 2000 revision of Form W-8EXP.) Certificate of Foreign Government or Other Foreign Organization for United States Tax Withholding Se1:Non rcferon.c.es arc to the !ntamal Rr:vcrwe Code un.fess. o therwise noted. General Instructions Note: For definitions of terms used througlwut these instructions; si>..0 Definitions o-n pag'ftS 2 and 3. Purpose oHo rm, Foreign persons are s ubject to U.S tax at a 30% ra\e on income they receive from U,S, w urces that ccnsists of interest (including certain origi nal issue discount (OID}i, dividends. rents. premiums. annuities, compensation for. or in expectation cf, serv·ices performed , or o ther fixed or determina ble a nnual or 124 % s~:7~~l}:.mt1~~1Yt_if r j~-,~~~1. i!'l1t17r~fmnn;~(~ in genera l, payments to an international crganiza!ion from investment in the United Stal es in stocks . bonds and other domestic sewrities, in!(Hest o n deposits in banks itl the United States , and paymen!s from any other source within the United States are exempt from tax under section 892 and exam pt fr orn wilhholdbg under sections 1441 and 1442. See Temporary Reg ulations section 1 _892-6T. Payments !o a fore ign central bank of issue (whether or net whQEy owned by a foreign soveieign) or to tl1e Bank for lnlemational Se!tlements from ob.ligations of the United Sta.tes or of or , .......... , . ........... .. 1 ..... 1::1, . l ' ,,,_.,..~,.,,_ 1 ,.. , Form W-8£XP (Rev. December 2000) Department of the Treasury Internal Revenue Service Certificate of Foreign Government or Other Foreign Organization for United States Tax Withholding (For use by foreign governments, international organizations, foreign central banks of issue, foreign tax-exempt organizations, foreign private foundations, and governments of U.S. possessions.) .,. Section references are to the Internal Revenue Code. .,. See separate instructions . .,. Give this form to the withholding agent or payer. Do not send to the IRS. Do not use this form for: • Any foreign government or other foreign organization that is not claiming the applicability of section(s} 115(2), 501 (c), 892, 895, or 1443(b). • A beneficia l owner solely claiming foreign status or treaty benefits . • A foreign partnership or a foreign tru st • A person claiming an exemption from U.S. withholding on income effectively con nected with the conduct . of a trade or business in the United States • A person acting as an intermediary . OMS No. 1545- 1621 Instead, use Form: W-8BEN or W-8ECI W-8BEN W-8BEN or W-81MY W-8EC I W-81MY Identification of Beneficial Owner (See instructions .) 1 Name of organization 2 Country of incorporation or organization 3 Type of entity D Foreign government D Government of a U.S. po ssession D International organization D Foreign centra l bank of issue (not w holly owned by the forei n soverei n) D Foreign tax-exempt organ ization D Foreign private foundation 4 Permanent address (street, apt. or suite no. , or rural route). Do not use a P.O. box. City or tow n, state or province. Include posta l code w here appropriate. Country (do not abbreviate) 5 Ma iling address (if different from above) City or tow n, state or province. Include postal or ZIP code where appropriate. Country (do not abbreviate) 6 U.S. taxpayer identification number, if requ ired (see in stru ctions) 7 Foreign tax identifying number, if any (optiona l) 8 Reference number(s) (see instructions) •WIiii Qualification Statement For a foreign government: 9 a D I certify that the entity identified in Part I is a fore ign government within the mea ning of section 892 and the payments are within the scope of the exemption granted by section 892. Check box 9b or box 9c, whichever applies: b D The entity identified in Part I is an integral part of the government of -----------------·-- --- --- ---------------------- --- ----- c D The entity identified in Part I is a controlled entity of the government of ------ ------------------------------------------------ 10 For an international organization: D I certify that: • The entity id entified in Part I is an international organization within the meaning of section 7701 (a)(18) and • The payments are within the scope of the exemption granted by section 892. For a foreign central bank of issue (not wholly owned by the foreign sovereign): D I certify that: 11 • The entity identified in Part I is a foreign central bank of issue, • The entity identified in Part I does not hold obligations or bank deposits to which this form relates for use in connection with the cond uct of a commercial banking fun ction or other commercial activity, and • The payments are within the scope of the exemption granted by section 895 . (Part II and reqwred certification continued on page 2) For Paperwork Reduction Act Notice, see separate instructions. Cat. No . 25401 F Form W-SEXP (Rev 12-2000) Form W-SEXP (Rev. 12-2000) h&#lli Qualification Statement (continued) Page 2 12 For a foreign tax-exempt organization, including foreign private foundations: If any of the income to which this certification relates constitutes income includible under section 512 in computing the entity's unrelated business taxable income, attach a statement identifying the amounts. Check either box 12a or box 12b: a D I certify that the entity identified in Part I has been issued a determination letter by the IRS dated ------------------------ that is currently in effect and that concludes that it is an exempt organization described in section 501 (c). b D I have attached to this form an opinion from U.S. counsel concluding that the entity identified in Part I is described in section 501 (c) . For section 501(c)(3) organizations only, check either box 12c or box 12d: c D If the determination letter or opinion of counsel concludes that the entity identified in Part I is described in section 501 (c)(3), I certify that the organization is not a private foundation described in section 509. I have attached an affidavit of the organization setting forth sufficient facts for the IRS to determine that the organization is not a private foundation because it meets one of the exceptions described in section 509(a)(1 ), (2), (3), or (4). d D If the determination letter or opinion of counsel concludes that the entity identified in Part I is described in section 501 (c)(3), I certify that the organization is a private foundation described in section 509. 13 For a government of a U.S. possession: D I certify that the entity identified in Part I is a government of a possession of the United States, or is a political subdivision thereof, and is claiming the exemption granted by section 115(2). •@Iii• Certification Under penalties of perjury, I declare that I have examined the information on this form and to the best of my knowledge and belief it is true, correct, and complete . I further certify under penalties of perjury that: • The organization for which I am signing is the beneficial owner of the income to which this form relates, • The beneficial owner is not a U.S. person, • For a beneficial owner that is a controlled entity of a foreign sovereign (other than a central bank of issue wholly owned by a foreign sovereign), the beneficial owner is not engaged in commercial activities within or outside the United States, and • For a beneficial owner that is a central bank of issue wholly owned by a foreign sovereign, the beneficial owner is not engaged in commercial activities within the United States. Furthermore, I authorize this form to be provided to any withholding agent that has control, receipt, or custody of the income of which I am the beneficial owner or any withholding agent that can disburse or make payments of the income of which I am the beneficial owner. Sign Here Signature of authorized official Date (MM-00-YYYY) Capacity in which acting @ Instructions for Form W-8EXP (Rev. December 2000) Certificate of Foreign Government or Other Foreign Organization for United States Tax Withholding Section references are to the Internal Revenue Code unless otherwise noted. ~------ NRA to complete IRS Form NO W-8BEN thru line 8 -< m CJ) Is Form W-8BEN > - - - - - -~NO -< m CJ) NRA completes IRS Form W-8BEN to apply for treaty benefits Department completes DPV, and attaches W-8BEN, 1-94 and other documentation supporting the disbursement and submits to Accounts Payable ToA/P -< m CJ) NO Are treaty benefits available? > - - - NO -< m CJ) A/P will process payment for gross amount or after applying relevant treaty benefits A/P will process payment for net amount after withholding taxes Payroll reports payment to payee and IRS on Form 1 - - - - - - - . i END 1042-S -----------------------------------Jl!i"fillX%fu'X\'Mi·:,,,cJl!i\XM!:¥''Mi"'Mi----i4$i)1iC,2:Y)' Page 5 Payment to NRA of Royalties Earned in the USA This diagram is a general presentation intended to provide perspective on the overall NRA payment process for this type of payment. See Manual of Business Procedures Section 77 for details. University Department Prepares paperwork to pay NRA for royalties earned in the USA Is payment to US agent for Benefit of NRA? YES Refer to "Payments of US Source Income Made to a US Agent for the Benefit of a NRA Payee" Diagram NP Staff receives DPV, and supporting NRA documents. Are income tax treaty benefits available? NRA completes IRS Form W-8BEN thru line 8 NO STOP! Return to Department to complete Form W-8BEN NRA completes IRS Form W-8BEN to apply for treaty benefits Department completes DPV and attaches W-8BEN form and royalty documentation and submits to Accounts Payable NO NO NP will process payment for gross amount or after applying relevant treaty benefits NP will process payment for net amount after withholding taxes Payroll reports payment to payee and IRS on Form 1042-S END ----------------------------1111111111----------·-· ' \ii/A, .. ,. Page 6 Payment of Rent to NRA for Real or Personal Property Located in the USA This diagram is a general presentation intended to provide perspective on the overall NRA payment process for this type of payment. See Manual of Business Procedures Section 77 for details. University Department Prepares paperwork to pay NRA for Rental of Real or Personal Property located in the USA Is payment to US agent for Benefit of NRA? YES Refer to "Payments of US Source Income Made to a US Agent for the Benefit of a NRA Payee" Diagram A/P Staff receives DPV, and supporting NRA documents. STOP! Return to Department to complete Form W-8BEN or W-8ECI Is income from assets used in, or held for use in a trade or business in the USA? -< m (/) Were the activities of trade or business in the USA a aterial factor in realizatio of renta l income? -< m (/) NRA completes IRS Form W-SECI Department completes DPV and attaches W-SBEN or W-SECI forms and documentation supporting the payment and submits to Accounts Payable ToA/P NO Received Form W-8ECI? Received Form W-8BEN? NO NRA completes IRS Form W-SBEN thru line 8 NO -< m (/) -< m (/) Is Form W-8ECI Complete? Is Form W-8BEN Complete? NO NO YES A/P will process payment for gross amount A/P will process payment for net amount after w ithho lding taxes Payroll reports payment to payee and IRS on Form 1042-S END -----------------------llllllllllllllllllllllllllllllllllllllllllllllllllllllllllll-1111111111---------!?nF/ "WW2N.'.Y "!Wi.P!fl.2:!= •+ Page 7 Payments of US Source Income Made to a US Agent for the Benefit of a NRA Payee This diagram is a general presentation intended to provide perspective on the overall NRA payment process for this type of pay'ment. See Manual of Business Procedures Section 77 for details. University Department Prepares paperwork to pay US Source income to US agent for benefit of NRA Payee Department completes DPV and attaches, PSC, ICSDD, forms and documentation supporting the payment and submits to Accounts Payable A/P Staff receives DPV, and supporting documents for payment to US agent for benefit of a NRA. Are al l Documents Complete? -< m "' A/P will process payment for net amount after withholding taxes Payroll reports payment to US agent and IRS on Form 1042-S END STOP! Return to Department to complete documentation Page 8 MICHIGAN STATE UNIVERSITY Controller's Office Accounting CTLR HOME DOWNLOAD SEARCH STAFF Recent News: Form images with the File Format .pdf can be viewed with Adobe Acrobat 4.0. Most of these forms are interactive. You must have Adobe Acrobat 4.0 in order to interact with these forms. Adobe Acrobat does not support saving data you 've entered on these interactive forms. You can only type in the information and then print. You can obtain Acrobat as a free add in from Adobe's home page Get Ano. b. a·t.;i;i 1 • Reader ,1-, Fi le Formats .pdf .doc .xis Form Name ex5d Form Description Agency Account - Non-Student Organization Application Form ex5d 2 Agency Account - Non-Student Organization Policy and Guidelines ex5c Agency Account - Student Organization Application Form ex12a Budget Reallocation Request Form ACCl Cancel Checks Form ex5b Clearing and Deposit Account Request Form ex75a Direct Payment Voucher ex5 g ex76b ex76a ex76c Guidelines for Development and Documentation of Internal Service Billing d Rate(s) Independent Contractor (IC) Status - Determination and Documentation (ICSDD) Guidelines for Completion of ICSDD Form Independent Contractor (IC) Status - Determination and Documentation (ICSDD) Procedure Form Independent Contractors (IC) - Professional Personal Services Contract (PSC) ex75b IRS Form W-9 - Request for Taxpayer Identification Number and Certification d ex40a Journal Voucher ACC2 Lost Check Form (Employee/Student) ACC3 Lost Check Form (Vendor) ex75c Multiple Check Voucher Form ACC4 New Account Form ex76g Nonresident Alien I - IRS Form 42 Withhol · g of Tax on Income Effectively ected With the Conduct of a Trade or Co - Exemption From ,("11- E, ~ Nonresident Alien Independent Contractor ~ / ~ - IRS Form 8233 - Exemption From ithholding on Compensation for Independent Personal Services of a Nonresident Alien Individual ex75d Reimbursement Vouch er Form ex5f Revolving Account Financial Procedures ex5e Revolving Account Policies ex5a Revolving Account Request Form ex70d Travel Voucher Last Reviewed: October 31, 2001 © .... 1999 .... MJ(:bi9.ilD ... $t.cit.e .... LJ.n.iver.s.ity d d l)_J;.J; d d d d d d d d d d d CTLR HOME ACCTGIA P HOME stuinfo email DOWNLOAD SEARCH STAFF Recent News: MICHIGAN STATE UNIVERSITY Controller's Office Issues Relating to Paying Non-resident Alien Guests and Independent Contractors • Any payment to a non-resident alien (international visitor admitted to the U.S. on a non-immigrant visa) is subject to regulation by the Immigration and Naturalization Service (INS) and the Internal Revenue Service (IRS). • INS and IRS regulations apply whether the international visitor is invited from their home country or from another institution in the United States. • Invitations to non-resident aliens should be coordinated with the Office for International Students and Scholars (telephone= 3-1720) before the invitation is extended. • Commitments to pay international visitors must not be made unless INS and IRS regulations are met. These agencies will assess penalties against MSU for failure to comply with regulations. • The term "payments" includes providing the visitor with travel accommodations (transportation, meals, lodging and incidentals) as well as reimbursing the visitor for documented travel expenses. It also includes contractual payment for services rendered and non contractual payment of honoraria. • Visitors holding 82 and W82 (visitors for pleasure/tourist) visas are not eligible for any payment. • Generally, visitors holding 81 and W81 (visitors for business) visas are eligible to receive payment for travel expenses. Legislation passed in 1998 also provides for the payment of reasonable honorarium to these visitors. Unfortunately, the INS has not yet issued implementing regulations for this provision. Prior to committing to or making an honorarium payment to such a visitor, consult with the Office for International Students and Scholars to be certain the visitor is properly documented. • Typically, contractual compensation is permissible for visitors holding Jl "Exchange Visitor" visas. If the visitor is being hosted by another U.S. institution, a properly completed INS Form IAP66 and a letter from the other institution authorizing "incidental employment" will be required to authorize a contractual engagement and payment to the visitor. • The IRS requires that all non-resident aliens receiving compensation payments (including honoraria) must posses and must provide to the payer (MSU) a U.S. social security number. All such payments made must be reported by MSU on IRS Form 10425. • Compensation payments are subject to income tax withholding unless the visitor is from a country with which the U.S. has an income tax treaty. Application for treaty benefits (exemption from withholding but not reporting and possibly taxation) must be made on IRS Form 8233 in advance of MSU making the payment (10- day waiting period after application). • Refer to Section 76 "Independent Contractors" of the MSU Manual of Business Procedures. • Accounts Payable Contact: Pat Lynn (3-2011), Phyllisia Pryor (3-2011) MICHIGAN STATE UNIVERSITY Controller's Office CTLR HOME Accounting/Accounts Payable ACCTGIA P HOME stuinfo email DOWNLOAD SEARCH STAFF Recent News: MSU Accounting/Accounts Payable Department 360 Hannah Administration Building East Lansing, Ml 48824 Telephone Numbers: Accounting: (517) 355-5000 lnvoicesNouchers: (517) 353-2011 Fax: (517) 353-1706 Email: ~c::C::CJLJntin9@.c:tl~:'!1Sll:Eldu Information About: • 1999 MSU Audited Financial Statements • Common Unit Codes (CUC) . . • Help Using the Account Inquiry System (Al7) • Invoice Confirmation • Invoice Copies via Email • Invoice Payments Against New Purchase Orders - Requires Adobe Acrobat • Year End Cut-Off Procedures BIAG Handouts: .. 133.t=tes ~eletil"l~t tepey i1 1gttJOji~l"':eslde11 t AliEH i ~ae5ts .. ai id _Ii idepei.idei 1t • Unrelated Business Income Tax (UBIT) Have a suggestion or comment for the Accounting Office, email them at above address or complete the comment form: Comment Form Last Reviewed: December 05, 2001 © 1999 Michigan State University MSU Office of the Controller 305 Administration Building East Lansing, MI 48824-1046 Phone: 517-355-5020 Manual of Business Procedures: Volume 1 Table of Contents SECTION 1: ACCOUNTING FOR DEPARTMENTAL TRANSACTIONS I. II. III. IV. OVERVIEW DAILY ACCOUNTING ACTIVITY ········-··········-······- RESOURCES AVAILABLE FOR ANALYSIS AND SUPPORT MONTHLY RECONCILIATION . ··-·············-······-··············-·-·-····-·········-··· SECTION 5: ACCOUNT NUMBERS AND ACCOUNT REQUESTS I. II. III. IV. -- PURPOSE OF PROCEDURE COMPONENTS OF UNIVERSITY ACCOUNT NUMBERS ACCOUNT REQUESTS EXHIBITS ······--····---·-·······-···-··-·-····· ·----···- .. -- ··-·--···· . - SECTION 10: ACCOUNTS RECEIVABLE I. II. III. IV. V. VI. GENERAL DEPARTMENTS WITHOUT BILLING FACILITIES DEPARTMENT AL BILLING DELINQUENT ACCOUNTS COLLECTION ADVICE EXHIBITS -· -·············-·-····--··-··-------- ---·------- ---- ··-- .... SECTION 11: BANKRUPTCY PROCEDURES I. EXHIBITS SECTION 12: BUDGET REALLOCATIONS I. II. III. IV. ·-·········-········-··--·-·-· . . .. ··-·· GENERAL INFORMATION GENERAL PROCEDURES PREPARATION OF THE FORM EXHIBITS ·-· ........ ·-······· SECTION 15: CASH HANDLING I. II. III. IV. V. VI. VII. -··· ...... - RESPONSIBILITY CASH RECEIPT FORMS DEPOSITS ---- CASH HANDLING POLICY OVERAGES AND SHORTAGES CASH CONTROL RECORDS RECEIPTS ······--··· VIII . IX. X. XI. XII. ············-··-· SECURITY CHECKING ACCOUNTS CHECKS REFUNDED OR CANCELLED WIRE TRANSFERS EXHIBITS ··-······· .. SECTION 16: CHECK CASHING SECTION 17: CREDIT CARD ACCEPTANCE I. OVERVIEW II. SET~UP III. DEPOSITS IV. ASSOCfATED FEES V. HbWtOljROCESS CREDIT CARDS VI. LbANI.'m .. MACHtNBS VII. WEB-I3ASEbA15Pl]CATI0N SECTION 18: ENCUMBRANCE ADJUSTMENT PROCEDURES I. II .. III. IV. V. GENERAL PURCHASE ORDER ENCUMBRANCES TELEPHONE ENCUMBRANCES ----····- ·- ............................ ---··· PHYSICAL PLANT JOB ENCUMBRANCES CORRESPONDENCE VIA UNIVERSITY E-MAIL -----··-···-··-····-·············- -··--- SECTION 19: EQUIPMENT DEPRECIATION POLICY FOR REVOLVING ACCOUNTS ·-················ ··-································ ·· ........................... ················-····· .... ······-····· ···-······· ························---········ I. BACKGROUND IL POLICY SECTION 20: EXPENDITURE CODES (OBJECT CODES) . -···--· -·······-·-·-------·-····-·····--··-·-·-··-·· ··--· .. -······-··------ ····-·-······--···-··-· ··-··-·-------·-········ I. GENERAL II. EXPENDITURE CLASSIFICATION CODES - (OBJECT CODE, OBJECT CLASS) SECTION 23: FELLOWSHIP AND TRAINEESHIP APPOINTMENTS I. II. III. IV. V. VI. VII. GENERAL FORMS A WARD REQUIREMENTS AND RESTRICTIONS -·-····------·-···-············-······-··-- - . ·---------~-----···-·····----··--------------···- A WARD PAYMENTS AMENDMENT OR TERMINATION ··········---· .. ··· OATH CARDS EXHIBITS ···-··-·················-····• ······-·········· ······--- ········- SECTION 25: FIELD TRIPS I. II. III. IV. V. VI. VII. GENERAL UNIVERSITY TRANSPORTATION .INITIAL ARRANGEMENTS FUNDING RESPONSIBILITY PRIVATE AUTOMOBILES EXHIBITS SECTION 30: IDENTIFICATION CARDS SECTION 35: OFFICE OF RISK MANAGEMENT & INSURANCE I. OVERVIEW II. LIABILITY III. AUTOMOTIVE ·-··-·-·-··-···-···--·-·········-··· -----------------·-···-··-·· ···-···-··-····-······· ·-----------------····-······-·-······· A. University-Owned Vehicles B. Privately-Owned Vehicles C. Rental Vehicles D. Qualification ofDrivers E. Reportingyehicle Accidents IV. PROPERTY A. Reporting Property Losses B. Adjustment of Property Losses -·····-------··-·· ··············--······-······················--······································· INTERNATIONAL MEDICAL ASSISTANCE PROGRAM V. A. MED EX P~~gram B. MED EX Program for Student Abroad Students VI. ADDITIONAL INSURANCE VII. EXHIBITS SECTION 40: JOURNAL VOUCHERS I. II. III. IV. GENERAL PREPARATION TIMELINESS EXHIBITS SECTION 43: LOST, STOLEN OR DESTROYED CHECKS .. ······-···· -······ -·········-·······-·············-·-······-···········-·--···--······· SECTION 45: EXPENDITURE POLICIES AND GUIDELINES FOR FOOD, LODGING AND BEVERAGES I. II. III. IV. V. VI. VII. VIII. IX. X . ... ·············-···-···----····· GENERAL BUSINESS FUNCTIONS RECRUITING MEALS - . -·- --· RETREATS, WORKSHOPS, COMMITTEE AND FACULTY /STAFF MEETINGS RETIREMENTS, STEPPING DOWN FROM ADMINISTRATIVE POSITIONS AND NEW ADMINISTRATIVE APPOINTMENT FUNCTIONS COLLEGE/ADMINISTRATIVE MAU AND STUDENT RECEPTIONS HOLIDAY AND OTHER FUNCTIONS/EXPENDITURES HOME ENTERTAINMENT BULK PURCHASES ALCOHOLIC BEVERAGES ····-····-···-··--····-·---···-·--··--·- --·-····-·------- ··-··········-·······-----·-··--····· ······················ ···· ···· ··········-······· ·--·-- ··-····-· ··- ·········--···-· .. ··---······· ··········· ........ SECTION 46: FOOD AND LODGING PURCHASED ON CAMPUS CHARGED TO ·················-···-····-·-···-··········-···-···--·······-·····- lJNlV"EllSitY-Ac·c··ooNT·s········ I. GENERAL -· ---··-·--·-········-·······-···· IL MEAL PURCHASES FROM RESIDENCE HALLS III. LODGING ARRANGEMENTS WITH UNIVERSITY HOUSING IV. PU~~!:{~~ES F~OM ~:r3:Q~~:r3:Q~~~_l'Q_2~_<:_2."C!RT, K~LLOG9_~E_~T~:r3:,T~~~~?~~~-~!(13-A~~-'~~!1-~I0N (SEE SECTION 206 ON MSU UNION), MSU UNION CATERING, AND UNIVERSITY CLUB ········--·······-·-··-···-··--------····- v. EXHIBITS SECTION 47: MEMBERSHIP DUES SECTION 48: FLOWER PURCHASE GUIDELINES SECTION 50: MICHIGAN SALES AND USE TAX I. APPLICABILITY A. Michigan State University as Purchaser B. ~i~~~a1.1_~tate ~ niversity _~~ §_~!leE II. III. IV. V. VI. VII. COLLECTION SALES TAX USE TAX EXEMPT TRANSACTIONS ASSESSMENT OF TAX EXHIBITS ... · ···- SECTION 53: MOVING EXPENSES I. II. III. IV. V. ELIGIBILITY AMOUNT PAYMENT FOREIGN MOVING EXPENSES EXHIBITS SECTION 55: PAYROLL DEPARTMENT I. DETERMINING EMPLOYMENT ST A TUS - EMPLOYEE VERSUS INDEPENDENT CONTRACTOR A :---E;;ploy~~ - -- - B. i~depe1~dent Contractors - -------------------············-·········· -·-··-·······--- -·-·······--···· II. UNIVERSITY PAYROLLS - - - ... . . ........... . - - ---·- ······--······················· -·-· ··-------··-··-····· ········--··········-·-································---······· ······················-············-······································································· ·······- B. C. D. E. F. G. H. I. J. K. L. M. N. Information Required for Payroll Processing Optional Forms Appointment and Hiring Forms Requi1ed for Payroll Processing Rate of Pay Deadline for Submitting Payroll Information and Changes ·--··-·--·--·--···-- -----·-···· ··--·-·-·-·--··- - --·-·-- · -·---··-·--··--------·· ...•.. Distribution of Checks Checks Not Distiibuted with Regular Payroll Checks ~?.t. ..• ~r~E~r~'1 .. w_~~~ ... ~e_gular .. ~-~X!~!1.1. Payroll Petty Cash Checks (Hand-Drawn Checks) Final Payments to Terminated Employees - -------·-· . --··----··---------------·---···--·--· Record of Jfours Worked Retention of Records III. FICA WITHHOLDING INFORMATION IV. CHANGES IN NAME AND/OR ADDRESS AND CORRECTION OF SOCIAL SECURITY NUMBER ERRORS ···-································· ··················-················ ·-· ·····-········---.. --·--· ······--·-·-·· ... -·-- - ·-· -------- -- ·······- ......... ····-·· -·-· -··· ··- ···- ·- ... ... . - - A. Change ofName B. Change of Payroll Address C. C~1:;~;ti;1g f:;~~~;;~-Soci~l Security Number V. COMPENSATION FOR NONREGULAR ASSIGNMENTS OR DUTIES ·-·-· .. ··-··--·-······- . ·····--·---------------·-···- A. Overtime B. Compensation for Services Apart from Regular Work Assignments C. Military Pay !t1ry IJt1ty D. E. Court Witness Fees ·······-··--·······················-········· VI. SPECIAL HANDLING VII. EXHIBITS SECTION 60: PETTY CASH FUNDS I. GENERAL II. OBTAINING MONEY FOR A PETTY CASH FUND A. Depa1-m-Ient~Cr;;.di B. ~g~~cy or Registered Student(?rg~~~zation Funds ---- - III. IV. V. VI. ---· . . . ··-····· USE OF PETTY CASH FUNDS ·····-···········-----·-·---·---- ·- ······-··-- REP LENIS HING PETrY CASH FUND SECURITY ........... ____________________ _ EXHIBITS SECTION 65: REVENUE CODES (OBJECT CODES) I. GENERAL IL REVENUE CLASSIFICATION CODES III. GUIDELINES SECTION 66: SIGNATURE REQUIREMENTS I. EXHIBITS SECTION 68: AUTHORIZED SIGNATURE FORMS I. II. III. IV. GENERAL COMPLETING NEW SIGNATURE FORMS ADDING OR DELETING AUTHORIZED SIGNERS EXHIBITS SECTION 70: TRAVEL REGULATIONS - Effective November Tra~sitionedtothe_ NewConsoHdafod Travel.Program. ··························································-·· I. GENERAL POLICY A . General Policy B. Eligibility C. Limitations andExceptions D. University Travel Office E. GE Capital MasterCard Corporate Card F. Cl11sterTravelAgencies( CT As) G. Direct Billing of Airfares/Rail H. Travelerpreference Profile/DirectBilling ApplicationFo1m ............................................................ ·················-····················· .... II. DOMESTIC TRAVEL - ·- ·····-----·-··········-· --A. Gen~~;fi~f~~~;;tion B. Eligibility C. Limitations and Exceptions D . Authorization E. Transportation F. Lodging G. Reimbursement ············--·····-····-··············-·········-·· ------ ------····-·····--·-······· III. LOCAL TRAVEL A. General Information B. Reimbursement IV. FOREIGN TRAVEL ····A. General Information --···--··-·····-·- B. Eligibility C. Limitations and Exceptions D. Authorization E. Transportation F. Reimbursement - Computation of Lodging andNf~IE Per Diem A::~~~~~~~~ •----•-·············································- G. Travel Vouchers H. Source of Funds for Foreign Travel I. A]]-UniversityResearchFunds J. Special ~?r.eig11 Travel Fund (?f"I'F) -······-····-··----·········-···-·- - ·--··-·-···--- ----·-· . V. OTHER INFORMATION ····--···········----····-···· A. Travel Advances B. Travel Vouchers c. ~eP?i:! ()ts>1:1t-<:>f~~ta.te ::rr.a.~e1 D. E. Travel under Contract, Gift and Grant Funds Insurance ·········------ ... -···-··-··---····--· .. -···-··-·-·-·· ·-·---·····--·------------······· -····· VI. EXHIBITS SECTION 74: INVOICE PROCESSING SYSTEM I. GENERAL II. PROCEDURES III. EXHIBITS SECTION 75: VOUCHERS I. DIRECTPAYMENTVOUCHER Purpose B. Fmm C. Preparation D. Restrictions E. Routing ................................. ··-············-··········· II. MULTIPLE CHECK VOUCHER A. Purpose ------------·····--~ B. Form C. Preparation D. Routing .................................. ·······················--····· III. REIMBURSEMENT VOUCHER A. Purposes -----··-·-------- B. Fonn C. Preparation D. Routing ·········--··················· IV. TRAVEL VOUCHER (SEE SECTION 70) V. WEEKLY VOUCHER CHECK SUMMARY VI. SPECIAL HANDLING VII. NONRESIDENT ALIEN PAYEES VIII. EXHIBITS ·--·· ··················--------·-· -··· ·-···-···-·········-·······-········--···· -··-··· -· ···-··--··--·· .. ··-·-·· ... SECTION 76: INDEPENDENT CONTRACTORS I. II. III. DETERMINING EMPLOYMENT STATUS TNDEPI~NDENT CONTR.ACTOR STA 'fT..JS _DETERrvIJ1\fA TION AND DOCUMENT ATION F ORM (ICSDD) INDEPENDENT CONTRACTOR PROFESSIONAL PERSONAL SERVICES CONTRACT (PSC) ···························· ····· ····· ..................................................... · A. Form / ··············---·······-·· B. Purpose C. Restrictions D. Preparation, Processing a nd. Routing ..::Ii~/!"'": -iP~. A~YM~·~E~· NttT"'P~R~O~C~E~· SffS~INr,G~71!'Ffflm!t'ff'eeJl!ff~~~~ ~ :5[. /'- EXHIBITS ~ From: To: Date: Subject: Hi Marge, "Robert Eash" 9/24/01 9:18AM Re: Manual of Business Procedures Vo I Jl_ We have an update just about ready to publish (I think Bev is proofing). Here are the changes : We've added an Online Return Form New counter hours are 7:30 a.m. to 5:00 p.m. We no longer offer a printed catalog. Open Order limit has been raised to $2,500. There are new Open Order policies. --~ / Budget Booster is now done by MSU Surplus Stor ( ~ d\~~ ? c.. New service rates . Thanks. Robert E. Eash, Manager University Stores 101 Angell Building Michigan State University East Lansing, Ml 48824-1234 Phone: (517) 355-1700 Fax: (517) 355-4484 E-mail: eash@msu .edu Web: http://usdinfo.msu.edu Mif From: To: Date: Subject: "Robert Eash" 2/6/02 6:50AM Manual of Business Procedures Marge, We will be putting out an updated version of our section 220. It's mostly just some cleaning up of the language. The only actual change is in the Open Order section . We removed space heaters from the restricted list. Thanks, Bob CC: "Boyd Shumaker" Change to ORWR's sec. 221. II. B. of the MBP as follows: Changes highlighted in blue. services at MSU, the Office of Recycling and Waste Management was formed to initiate and coordinate collection and processing/marketing ofrecyclable wastes. 1. OFFICE PAPER a. Regular, Routed Service White and Mixed paper collection is available in all academic, administrative and most service buildings. The program works as follows: • Free containers are provided to all staff for each of the grades of paper collected (use of an alternative container is acceptable). • Faculty and staff will take these containers to an "intermediate" container located in centralized area in their department (usually near copy machines, computers, mail boxes, etc.) • Office of Recycling staff collects the materials from there on a regular schedule, and removes it from the building for processing and marketing. b. Special Pick up Service Special pickup service is available for items such as bound books, glossy brochures, purged files*, etc. Call the MSU Recycles I Hotline to arrange for a special pickup. ·N8'fE hat some university clocuments are require to fie ept for varying periods of time to comply with legal and fiscal requirements. chi:v€ s ana Histoncal Collections, Sec. 335, or Contact Universit~ www.msu.edu/unit/msuarhc/; call 517-355-23-30 for more 'nformation. 2. MAGAZINES/CATALOGS These periodicals with all glossy pages are collected at different locations throughout academic and administrative buildings in containers provided to each building. Call for location information or to schedule a special pick up. 3. NEWSPAPERS b 4. 5 . 6 . 7. These are collected in all buildings at a designated location, usually at the loading dock. Individuals and departments are required to transport the paper to these containers. TELEPHONE DIRECTORIES Outdated Ameritech, faculty/staff, and student directories are collected on campus at the time of distribution of the new directories. Call the Hotline for location information. LASER PRINTER TONER CARTRIDGES Empty Toner Cartridges will be collected for reuse by the Office Paper recycling staff if they are placed in the original packaging and left next to the office paper "intermediate" container. INK JET CARTRIDGES Empty Ink Jet cartridges can be sent to MSU Recycling, via campus mail. Please use the plastic bag furnished with the cartridge purchased from University Stores, or call the Hotline to request one. SHIPPING PACKAGING Corrugated cardboard cartons are collected from many receiving areas and other campus buildings. Please call if you have large amounts of cardboard in your building. The Office of Recycling and Waste Management will provide containers and guidelines to follow for preparation. In addition, Polyfoam "packing peanuts" only (no cups or blocks) are collected and redistributed by University Stores for re-use by shipping departments. Simply place in a plastic bag, and label for Campus Mail pick up. 8. RESIDENTIAL MATERIALS A mobile Recycling Center is available for residents of the University Apartments. It accepts household materials such as newspaper, corrugated cardboard, office papers; and glass, plastic and metal containers. A plan for serving the Residence Halls is also being developed. From: To: Date: Subject: "Deborah Dohm" 4/29/02 4:50PM Revision to Section 221 - Recycling - MBP University Archives and Historical Collections asked that we add the following statment to Section 221.11.B of the Manual of Business Procedures regarding recycling . The changes are highlighted in blue and I've also attached a copy of the section with the added material highlighted. We will make the changes. {There are other minor changes to format, but content remains unchanged .) Please call if you have any questions - 5-3366 b. Special Pick up Service Special pickup service is available for items such as bound books, glossy brochures, purged files*, etc. Call the MSU Recycles! Hotline to arrange for a special pickup. *NOTE that some university documents are required to be kept for varying periods of time to comply with legal and fiscal requirements. Contact University Archives and Historical Collections, Sec. 335, or www.msu.edu/uniUmsuarhc/; call 517-355-2330 for more information. CC: , "Bob Ellerhorst" , "Cena Antes" , "Pete Pasterz" e oomey- ore From: To: Date: Subject: "Beverley Garrison" 12/5/01 4:47PM MBP for Section 222 , MSU Surplus Store Marge - I know you've been just itching for this one. Major changes: The new on-line Pick Up Request Form (PURF) is now available (111.A.2). It's quick and easy, no form to buy, and MSU Surplus Store is immediately notified that you have something for them to pick up. This form can ONLY be used for non-inventoried items for no credit. The Budget Booster (IV.) is now paperless. It is a list-serv that is accessible to all. You may sign up for the list-serv by e-mailing MSU Surplus Store at surpluss@msu .edu . Other changes * just added some hotlinks Now Boyd has assured me that this section will get published at least by tomorrow. So you gotta hold your horses just a little bit longer. I'll be watching for this tomorrow ... ooh, ooh, Boyd just walked into my office and said that it's published. One problem ... there is no link to the PURF, we are working on that and it should be fixed by the end of the week. I'm still working on Section 300 and that's almost done. Pam George wasn't available to comment on some changes I'm suggesting. I believe that she will be available tomorrow. Getting close! Bev CC: "Ruth Daoust" From: To: Date: Subject: Marge, "Pam George" 12/4/01 9:07AM MBP 224 Boyd Shumaker will be uploading the changes to Section 224 this week. Here is a summary of the major changes: Ill. Equipment Criteria - Definitions have been added and the Criteria has been updated. \ ( ~ - Equipment Taken Off-Campus - This paragraph has been updated. Hyperlinks were added throughout Section 224. Exhibits were removed and hot links were created to the site that "owns" the form. Thanks Pam Pamela D. George Purchasing Director 102 Angell Building East Lansing Ml 48824-1234 Phone: 517-355-0357 Fax: 517-353-2024 CC: , "Glenn DeYoung" , "Wendy Redinger" "Beverley Garrison" , "Boyd Shumaker" From: To: Date: Subject: "Beverley Garrison" 12/5/01 12:29PM MBP224 The Inventory Section 224 is published and I have checked the links and they look ok to me. Pam sent you a brief summary yesterday, so I think we are done with this one. Still working on Section 222 (MSU Surplus) and Section 300(Equipment Transfer Notice). They should be done shortly. Bev \ From: To: Date: Subject: Pat Brown Toomey, Marge 4/25/01 1 :07PM Re: Manual J OK Marge your updates are done. Any problems, let me know. ************************************** Patricia M. Brown Information Technician II 146 Administration Building East Lansing, Ml 48824 brownpa@ctlr.msu.edu >» Marge Toomey 04/25/01 07:36AM >» Hi Pat. Section 255 was recently updated for University Services . here is what needs to be done. In our Table of Contents - Section 255 should read: I. General II. Tape Transcription Services (this is what is different) 111. Autopen Services IV. Spartan Office Aides Also, please add this to the Changes YTD document: Section 255 - Office Services Department General Policies: Condensed and renamed the "Word Processing Services" section to "Tape Transcription Services;" facsimile services have been discontinued. Be sure current dates are in all of the headers. Let me know when this is done. Thanks. Manual Of Business Procedures - Section 255 Page 1 of 2 MANUAL OF BUSINESS PROCEDURES - SECTION 255 I. II. III. IV. -·······-·················· -··-······----···-······· GENERAL TAPE TRANSCRIPTION SERVICES AUTOPEN SERVICES SPARTAN OFFICE AIDES ············--·················--···········-·--······ ·············-··-··-··-···-······-······· OFFICE SERVICES DEPARTMENT GENERAL POLICIES I. GENERAL The Office Services Department, telephone number 355-6620, is located at 88 Service Road. It is open Monday through Friday, 8:00 a.m. to noon and 1 :00 p.m. to 5 p.m. All services are performed on a charge basis. II. TAPE TRANSCRIPTION SERVICES Tape transcription services are available to all departments of the University with a university account number or on a cash basis. All work performed by Office Services is on a first come, first serve basis. A. Transcription of cassettes Correspondence, speeches, outline, abstracts, journal articles, reports, notes, minutes of meetings, research papers, focus groups, etc., may by transcribed. III. AUTOPEN SERVICES Signing correspondence with an individual's original signature is available. This service is available only when an individual frequently has a large volume of correspondence requiring his/her signature on a continual basis. Individuals wishing to use this services must purchase the matrix. Delivery time for a matrix is six to eight weeks. IV. SPARTAN OFFICE AIDES A. Temporary on-call help: Upon request, departments can obtain the services of substitute personnel during leaves of absence, vacations, sickness, overloads of work, vacant positions, etc. B. Requesting temporary help: to insure that a temporary on-call employee will be assigned to you, we should receive the request for help at least one week prior to the starting date of the assignment. The department must indicate the following: 1. Type of work to be performed 2. Starting date http://usdinfo.msu.edu/Mbp/Sect25 5 .htm 04/25/2001 Manual Of Business Procedures - Section 255 Page 2 of2 3. Approximate ending date 4. Working hours 5. Name of supervisor to report to 6. Account number to be charged Office Services will determine the rate for the service based on the type of work to be performed and will select an employee who best meets the required qualifications of the position. http ://usdinfo .msu. edu/Mbp/Sect25 5 .htm 04/25/2001 From: To: Date: Subject: Marge, "Bob Felt" 4/24/01 2:45PM Re: MBP changes for Office Services We condensed and renamed the "Word Processing Services" section to "Tape Transcription Services" and have discontinued facsimile services. -Bob >» "Marge Toomey" 04/24/01 02:38PM »> Thanks Bob. Can you give me one sentence that would summarize what changed and I will put that out on our web site under "changes year to date:" Your statement will also be included in the annual memo we send (electronically) to the campus community summarizing all changes made to the manual over the past year (10/1 - 9/30). Thanks again. »> "Bob Felt" 04/24/01 02:01 PM »> Hi Marge, We recently made some changes to the MBP's listed below. http://usdinfo.msu.edu/Mbp/Sect255.htm Please let me know if you need more information from US. Thank you! -Bob Felt From: To: Date: Subject: Marg, "Glenn DeYoung" 9/4/01 10:22AM MBP section 270 exhibt., \ , itJ. / ~ Per our conversation last week, here is a copy of the new Purchasing Cq£,d Application form. This is exhibit 6 of the MBP section 270. The "Single Purchase Limit" has been increased to $2,500 from $1,000. ) There are a few other exhibits that will be changing in the near future. \ ( )~ Thanks Glenn Glenn DeYoung Systems Analyst MSU Purchasing Department 517-355-0357 Ext. 106 Fax: 517-353-2024 gdeyoung@msu.edu "Boyd Shumaker" , "Marilyn Powell" CC: , "Pam George" p vtµ)lW}, ',y ~ ~ G.J ko l~ ~ff L. ~ From: To: Date: Subject: "Glenn DeYoung" 9/4/01 10:32AM MBP section 270 part Ill A ~~:giine in MBP 270 pa~Yr! ads "The Purchasing Card is to be utilized for purchases totaling $2,500 or less ." Sorry I forgot to add this to the previous email. Glenn From: To: Date: Subject: Marg, "Glenn DeYoung" 9/4/01 10:32AM MBP section 270 part Ill A This line in MBP 270 part Ill A now reads "The Purchasing Card is to be utilized for purchases totaling $2,500 or less." Sorry I forgot to add this to the previous email. Glenn MEMO TO: Marge Toomey Controller's Office FROM: Pamela George Purchasing DATE: September 20, 2001 RE: Manual of Business Procedures - Updates for Section 270 I have updated the entire Purchasing Section of the MBP, Section 270. Many of the sections have just been re-organized and further clarification provided. The following list of items represent the areas with significant changes. Please include the list on the Controller's letter that will be distributed to campus in October. I. II. General Policy Purchase Requisition a. Form - Item2 (on-line authorized user) b. Purpose - Item 1 (purchase authorization) III. IV. Bidding Procedures (formerly Section VII) Purchase Order d. Open Purchase Orders f. Maintenance Service Contracts g. Change Order to a Purchase Order h. Vendor Exhibits on Campus V. Returns - Material Return Slip (MR) c. Preparation d. Distribution and Routing e. Transportation Service Request Card (TSR) VI. Purchasing Card a. Purpose Foreign Merchandise Acquisitions - New Item VII. VIII. Minority and Women Owned Businesses IX. Code of Ethics b. Conflict of Interest Manual Of Business Procedures - Section 270 Page -I of 1 MANUAL OF BUSINESS PROCEDURES SECTION 270 I. GENERAL POLICY ~ G'E'tJ~\- II. PURCHASE REQUISITION PU~ (E Q. III. BIDDING PROCEDURES B, ~~ t)L, IV. PURCHASE ORDER ~ V. RETURNS - MATERIAL RETURN SLIP (MR) pc..~~~ VI. PURCHASING CARD VII. FOREIGN MERCHANDISE ACQUISITIONS PM 'A VIII. MINORITY AND WOMEN OWNED BUSINESSES ~\.-0 cc IX. CODE OF ETHICS loe' 'ft\~ t I fr~ w f~ ~ {n{),,; 1 oc:._ 'fc ~u ~ ~ cv-J!--., '\() +- c., ~ - ~ b);. (,U , K 1--, 6m= http ://usdinfo .msu. edu/mbp/ sect2 7 0 .htm 2/27/2002 From: To: Date: Subject: "Beverley Garrison" 12/21/01 10:01AM MBP, Section 300 Marge O I bet you can/Et believe your eyes! ltJEs actually ready. Manual of Business Procedures O Section 300 . Major Changes: Equipment Transfer Notice (ETN) has a slightly different look (Exhibit 1) and the distribution of copies (colors) has been changed. The instructions on 6How to Use an Equipment Transfer Noticeo have changed slightly to conform to the new form. The last section, 6Credit for Department Releasing Equipmento, has been deleted and replaced by 6Account Numbers and Object Codes on Equipment Transfer Noticeso. This revision primarily clarifies the use of object codes with the Equipment Transfer Notice. Other Changes: The wording has changed slightly for the 6Definition of Equipmento found under Policies Regarding the Use of the Equipment Transfer Notice. It conforms with the definition asReceived: from USD-MTA by USDNW1 .usd.msu.edu found in the Inventory Section of the Manual of Business Procedures, Section 224 . Under I. Transfer of Equipment or Supplies to Another Department, MSU Surplus Store offers assistance to departments in determining the value of items. Other than that, changes are more cosmetic than substantive. As I mentioned in my voice mail this morning, the old ETN is still Exhibit 1. It will be next week before I can expect the new ETN to show up. I am planning on being around all during the holidays so I will keep an eye out for it. We all realize how important this is because the new Section 300 talks about the new ETN. I'll let you know as soon as I see it. Hopefully early next week. Have a good holiday! Bev From: To: Date: Subject: Marge, "Whitney Miller" "Marge Toomey" 9/5/01 8:45AM Archives Policies I'm glad you wrote me. I have been meaning to get in touch with you about a couple of things . 1) The hotlink from the "Section 335" should go to this address . Note there is an underscore between the "e" of frame and the "r" of records . It just doesn't show up in this format. http://www.msu.edu/-msuarhc/frame_records.htm CB _ 2) We have had quite a problem this year getting people to abide by the university policy on records retention/destruction. Part of the reason is that the office of recycling has been telling people to weed out their records and toss them. While this is not necessarily a bad thing to do, there is a proper procedure to be followed when destroying university records. Thus, I would like to know if we can add a part to our section. Section 335 University Records Program http://www.msu.edu/-msuarhc/frame_records:htm I. University Records Transfer and Destruction Policy http://www.msu.edu/-msuarhc/frame_info.htm and info as well}. (Note there is an underscore between frame 3) In addition, would it be possible to add a line in Section 221 that says something to the effect that for the recycling or destruction of University Records refer to Section 335. Thanks. Marge. If this message is too confusing please give me a call. Whitney 5-2330 addild L't, L t -o~~ ~ c \ s l (~ "- Clwlvu.J ~ ?o lir Manual of Business Procedures, Volume II Revised ay 2001 Page 1 of 5 J1S SECTION 315: GIFTS, GRANTS OR CONTRACTS I. SPONSORED RESEARCH ····-·-··---····-··········-·········----------- ----· .... ·····-···-·-···- ·························--·--·····-····-----······--·-·--··-········-············-······-·--···- A. BASIC POLICIES FOR ADMINISTRATION B. PROPOSAL C. COOPERATIVE RESEARCH AGREEMENT D. PROCEDURES AFTER APPROVAL BY OUTSIDE AGENCY ···········-········-··---------·······-·········-···-·············-·--··· ················--·----···--·········-···-······· ---··-·-·····-············-······· ........ . . .. ···----·····-·······-···-··········-···-········-----· ·--··-------·-···--·--·-···· .. . ... .. . .. . ......... ·······-·· II. GIFTS III. NONC::ASHGIFTS/GffTS-IN~KIND (SECURITIES,REALESTATE, MINERAl,INTEREST§, OR OTHER PERSONAL PROPERTY ················-···-···········-·············-······· . . IV. CQN°SIGNMENTEQUIPMENT-.. GIFTS V. FINAL APPROVAL VI. CASH RECEIPTS VII. EXPENDITURES VIII. REPORTS IX. EXHIBITS ············-·····················-··-----··-·--···- ·-··-·······--·······- SECTION 315: GIFTS, GRANTS OR CONTRACTS I. SPONSORED RESEARCH A. Basic Policies for Administration 1. Research projects should be developed consistent with the University's goals. 2. Sponsored research should be accepted only if appropriate time, space and facilities can be made available. Provisions should be made for continuity of support in order to stabilize required staff. 3. The University should retain the rights of first publication for its scholars. 4. The complete cost of the research should be determined. If grants or contracts are accepted which do not cover all of the direct and indirect costs, the department/college may be asked to provide the additional financial support with the full recognition that it is making a contribution to the cost of the work. 5. Research projects should conform to established University patent policy (see ll$µppJ~m~11t~$Jc:1t~m~11JB,~g;;1J<}il1g_I:?isp9~iti9119f})<1J~11ts1' at end of section). B. Proposal 1. The proposal, which is generally developed in the department, should establish the terms and conditions for the provision of funds and the performance of research. Before the final draft of the proposal is completed, the budget should be reviewed by the Office of Contract and Grant Administration, for conformity with policies on such matters as allowable direct and indirect costs. http://ctlr.msu.edu/mbp/mbp315 .htm 05/02/2001 Manual of Business Procedures, Volume II Revised May 2001 Page 2 of 5 2. Direct costs involve expenditures that are directly related to a project such as salaries, supplies and services, and purchases of equipment. Indirect costs involve administrative services, maintenance and operation of physical facilities and other expenditures that cannot readily be related directly to the research project. Indirect costs are computed by multiplying a fixed percentage, which is negotiated with the federal government, times the total direct costs excluding equipment items and the portion of each subcontract which exceeds $25,000. Only the Vice President for Finance and Operations can negotiate indirect cost rates on behalf of the University. 3. The proposal should not be submitted to an outside agency before it is approved by the unit administrator, dean, and Contract and Grant Administration. 4. If human subjects are involved in the proposed research, approval by the University Committee on Research Involving Human Subjects is required before an account number can be assigned. 5. If animals are to be used in the proposed research, approval by the Committee on Animal Facilities and Care is required before an account number can be assigned. 6. Proposals which call for use ofradioactive isotopes, some forms ofrecombinant DNA, or hazardous organisms or chemicals require approval of the appropriate committee. 7. Proposals to do sponsored research or education projects overseas require approval by the Dean of International Studies and Programs. 8. Proposals involving new space, alterations, or renovations of existing space and/or facilities require approval of the Office of Facilities Planning and Space Management. 9. One copy of the proposal should be prepared for each person signing the transmittal sheet in addition to those required by the sponsoring agency. 10. A "Transmittal Sheet for Request for Contract, Grant or Gift Support" (see ~x]1ipit,J1~:: A) should be completed and submitted with the proposal through appropriate channels as mentioned above, reaching Contract and Grant Administration after all other approvals have been obtained. 11. Sufficient time for processing within the University should be allowed so that Contract and Grant Administration has two days to review the proposal. 12. Mailing of the proposal is the responsibility of the de artment. C. Cooperative Research Agreement 1. It is sometimes advantageous to substitute a Cooperative Research Agreement in lieu of a more extensive contract or grant document. These forms are available from the Contract and Grant Administration web site (355-5040), (see exhibit, 315-B). 2. Research activities utilizing the Cooperative Research Agreement should be processed for campus approvals the same as formal proposals. These agreements should be accompanied by a "Transmittal Sheet for Request for Contract, Grant or Gift Support," which requires unit administrator, college and University level approval before the agreement is completed. D. Procedures After Approval by Outside Agency http:// ctlr .msu. edu/mbp/mbp315 .htm 05/02/2001 Manual of Business Procedures, Volume II Revised May 2001 Page3 of 5 Official award notifications should be sent to Contract and Grant Administration, who will notify the project leader, department and coordinate acceptance by the Board of Trustees. II. GIFTS A. Definition: A gift is a voluntary transfer of funds or property by a person or organization to Michigan State University without any valuable consideration or compensation to the donor. B. Gifts will be processed by the Office of University Development to assure that: 1. All gifts are properly receipted and recorded. 2. Each donor receives a prompt and appropriate acknowledgement. 3. Members of the Board of Trustees, the administration, faculty and volunteer organizations are kept fully informed. 4. A central record is maintained on all gifts. C. Gifts are to be accepted, processed, acknowledged and recorded according to established University policies outlined in the "Procedures and Practices for the Development Program." Copies may be obtained from the Vice President for University Development (355-8257) or the Associate Vice President and Director of Development (355-8257). D. Checks for unrestricted and designated gifts to be deposited into 31-XXXX accounts should be forwarded immediately by departments to University Development, 220 Hannah Technology & Research Center, for processing. Any correspondence from the donor should be attached. t Gifts for research (non-Federal and non-State) of $1,000 or less should be sent directly to University Development for direct deposit in existing sponsored project accounts. Any correspondence from the donor should be attached. Please include a listing of the following information: account number, amount, AES project number (if applicable), name of researcher. Gifts for research of more than $1,000 should be routed through Contract and Grant Administration with appropriate forms attached (see procedures at beginning of section 315). E. Official acceptance of all gifts to Michigan State University will be made by the Board of Trustees based upon a consolidated quarterly report of the Vice President for University Development. Only those gifts which are in conformity with the needs of the University will be accepted. The University reserves the right to refuse any gift which is judged to be inconsistent with institutional needs or for which University resources are too limited to properly administer the gift. In addition, only those gifts from which disbursements are to be made on a nondiscriminatory basis will be accepted. III. NONCASH GIFTS/GIFTS-IN-KIND (SECURITIES, REAL ESTATE, MINERAL INTERESTS, OR OTHER PERSONAL PROPERTY). A. Gifts of real and personal property and gifts-in-kind must be documented on a Consignment/Non-Cash Gift Form (see exhibit, 315-C) and approved by the Secretary to the Board of Trustees for submission to the Board for acceptance. The Office of University http://ctlr.msu.edu/mbp/mbp315 .htm 05/02/2001 Manual of Business Procedures, Volume II Revised May 2001 Page 4 of 5 Development or the MSU Foundation is to be contacted immediately if gifts of this nature are contemplated. All property or equipment received by the University as a loan should be processed according to instructions in section 224. B. A donor must have a written appraisal from an independent, qualified appraiser for gifts of $5,000 or more. The appraisal must conform to current IRS guidelines. It is the donor's responsibility to secure, arrange and pay for appraisals of gift property, with assistance from University Development. The University may request a second independent appraisal or may require its own appraisal prior to establishing gift value. Contact University Development or the MSU Foundation for further information. C. Tax Requirements: Internal Revenue Form 8283, Noncash Charitable Contributions, is required from a donor if the gift is over $500. This form must be signed by the MSU Foundation if the gift is over $5,000. The Internal Revenue Service requires Form 8282 to be completed when the donated property over $500 has been sold, exchanged, consumed or disposed of within two years after the date the original donee received the property. The MSU Foundation must be notified of any disposition of noncash gifts within the first two years so that they may prepare the proper notification. NOTE: The donor receives a copy of this form. If the selling/disposal price is much lower than the gift value, the donor's charitable gift value could be challenged. IV. CONSIGNMENT EQUIPMENT - GIFTS (General Stores, stock number 140-2498; see exhibit, 315-C). This form should be processed after the gift-in-kind has been received by the University. Documentation for the gift-in-kind (appraisals, etc.) should be attached. Include your common unit code, date received, and required signatures as follows: Department Chairperson Dean or Designated Representative MSU Foundation Contract and Grant Administration Inventory Department V. FINAL APPROVAL OF GIFTS, GRANTS AND CONTRACTS All gifts, grants or contracts presented to the University must be approved by the Board of Trustees. Contract and Grant Administration will coordinate this activity. VI. CASH RECEIPTS Colleges, departments and individuals should process all checks immediately upon receipt as follows: A. Checks received for Contracts and Grants should be forwarded to Contrant and Grant Administration for processing. Checks for Gifts should be forwarded to University Development (see procedure, H~!!!J1R). Departments and colleges are not permitted to deposit or cash checks. B. When payment for sponsored programs is not received in advance, the Office of Contract and Grant Administration will bill the sponsor according to the terms of the grant or contract. http://ctlr.msu.edu/mbp/mbp315 .htm 05/02/2001 l'4anual of Business Procedures, Volume II Revised May 2001 Page 5 of 5 VII. EXPENDITURES A. Expenditures of funds must be made in accordance with policies established by the University unless additionally restricted by the terms of the gift, grant or contract. B. MSU employees traveling overseas on University business must provide receipts for all currency exchange transactions. If receipts are unavailable, the employee must certify in writing that all funds exchanged have been accounted for and business expense receipts presented must equal the amount received in local currency. VIII. REPORTS A. Project leaders will be responsible for preparing technical reports as required by the terms of the grants and contracts. B. Financial reports for grants and contracts will be prepared by the Office of Contract and Grant Administration and forwarded to sponsors as required. C. Reports of gifts will be prepared and/or coordinated by the Office of the Vice President for University Development. SUPPLEMENTARY STATEMENT REGARDING DISPOSITION OF PATENTS Except as otherwise provided, any discovery or invention which results from research carried on by, or under the direction of, any employee of the University and having the cost thereof paid from University funds or from funds under the control of, or of the employee's duties with the University, or which has been developed in whole or in part by the utilization of University resources or facilities, shall belong to the University and shall be used and controlled in such a manner as to produce the greatest benefit to the University and the public. Any proposed deviation from this standard University patent policy shall be referred to the Vice President for Research and Graduate Studies. IX. EXHIBITS Exhibit 315-A. Transmittal Form for Request for Contract, Grant or Gift Support E~llj}?jt}1~::J3_. Cooperative Research Agreement E~lli}?itJJ~::~- Consignment/Non-Cash Gift Form http:// ctlr .msu. edu/mbp/mbp315 .htm 05/02/2001 .. t J~~ - 7~~-~~ 5}i)oj \>J"'W.~O.. , r-,--''S~.e.Au. \ Manual of Business Procedures, Volume II Revised March 1996 II SECTION 315: GIFTS, GRANTS OR CONTRACTS I. SPONSORED RESEARCH A. BASIC POLICIES FOR ADMINISTRATION B. PROPOSAL C. COOPERATIVE RESEARCH AGREEMENT D. PROCEDURES AFTER APPROVAL BY OUTSIDE AGENCY II. GIFTS III. NONCASHGIFTS/GIFTS-IN-KJND {SECURITIES, REAL ESTATE, MINERAL INTERESTS, OR OTHER PERSONAL PROPERTY IV. CONSIGNMENT EQUIPMENT - GIFTS V. FINAL AP PROV AL VI. CASH RECEIPTS VII. EXPENDITURES VIII. REPORTS IX. EXHIBITS ~SECTION 315: GIFTS, GRANTS OR CONTRACTS I. :;.SPONSORED RESEARCH :;.A. Basic Policies for Administration 1. Research projects should be developed consistent with the University's goals. 2. Sponsored research should be accepted only if appropriate time, space and facilities can be made available. Provisions should be made for continuity of support in order to stabilize required staff. 3. The University should retain the rights of first publication for its scholars. 4. The complete cost of the research should be determinedlf grants or contracts are accepted which do not cover all of the direct and indirect costs, the department/college may be asked to provide the additional financial support with the full recognition that it is making a contribution to the cost of the work. 5. Research projects should conform to established University patent policy (see "Supplementary Statement Regarding Disposition of Patent's at end of section). :;.B. Proposal 1. The proposal, which is generally developed in the department, should establish the terms Page 1 Manual of Business Procedures, Volume II Revised March 1996 and conditions for the provision of funds and the performance of research. Before the final draft of the proposal is completed, the budget should be reviewed by the Office of Contract and Grant Administration, for conformity with policies on such matters as allowable direct and indirect costs. 2. Direct costs involve expenditures that are directly related to a project such as salaries, supplies and services, and purchases of equipment. Indirect costs involve administrative services, maintenance and operation of physical facilities and other expenditures that cannot readily be related directly to the research projectlndirect costs are computed by multiplying a fixed percentage, which is negotiated with the federal government, times the total direct costs excluding equipment items and the portion of each subcontract which exceeds $25,000. Only the Vice President for Finance and Operations can negotiate indirect cost rates on behalf of the University. 3. The proposal should not be submitted to an outside agency before it is approved by the unit administrator, dean, and Contract and Grant Administration. If human subjects are involved in the proposed research, approval b Committee on Research Involving Human Subjects is require · efore an account number can e assigned. +--~-~u~~:..---tw---:-- the y. 4. 5. 6. Proposals which call for use of radioactive isotopes, some forms of recombinant DNA, or hazardous organisms or chemicals require approval of the appropriate committee. 7. P ropo s a l~~umpu t e r s--ur use of tetevision-eqnipnrerrr-slmrrl _b.e-apf>F0:ved-by-the-¥iee-P-re:vest for Gom:pttti:ng-and Tet:hrroto-gr 8. Proposals to do sponsored research or education projects overseas require approval by the Dean of International Studies and Programs. 9. Proposals involving new space, alterations, or renovations of existing space and/or facilities require approval of the Office of Facilities Planning and Space Management. 10. One copy of the proposal should be prepared for each person signing the transmittal sheet in addition to those required by the sponsoring agency. 11. A "Transmittal Sheet for Request for Contract, Grant or Gift Support" (se(exhibit, 315-A) should be completed and submitted with the proposal through appropriate channels as mentioned above, reaching Contract and Grant Administration after all other approvals have been obtained. 12. 13. Page 2 Manual of Business Procedures, Volume II Revised March 1996 :;.c. Cooperative Research Agreement 1. It is sometimes advantageous to substitute a Cooperative Research Agreement in lieu of a more extensive contract or grant document. These forms are available from the Contract and Grant Administration web site (355-5040), (seeexhibit, 315-B) . .Cooperative ResearGh-A-greement-s--fre(:fOOntly-Gmmnit-l'es0urees-ef---t-he~T:J1tiveFs1t ifl-a-mmmer re.quiring_spec;ial-.-€-valuat-i0n and-legaLcoullSei.--- - - 2. Research activities utilizing the Cooperative Research Agreement should be processed for campus approvals the same as formal proposals. These agreements should be accompanied by a "Transmittal Sheet for Request for Contract, Grant or Gift Support," which requires unit administrator, college and University level approvabefore the agreement is completed. :;.n. Procedures After Approval by Outside Agency Official award notifications should be sent to Contract and Grant Administration, who will notify the project leader, department and coordinate acceptance by the Board of Trustees. II. :.GIFTS :;.A. Definition: A gift is a voluntary transfer of funds or property by a person or organization to Michigan State University without any valuable consideration or compensation to the donor. :;.B. Gifts will be processed by the Office of University Development to assure that: 1. All gifts are properly receipted and recorded. 2. Each donor receives a prompt and appropriate acknowledgement. 3. Members of the Board of Trustees, the administration, faculty and volunteer organizations are kept fully informed. 4. A central record is maintained on all gifts. :;.c. Gifts are to be accepted, processed, acknowledged and recorded according to established University policies outlined in the "Procedures and Practices for the Development Program." Copies may be obtained from the Vice President for University Development (355-8257) or the Associate Vice President and Director of Development (355-8257). :;.D. Checks for unrestricted and designated gifts to be deposited into 31-XXXX accounts should be forwarded immediately by departments to University Development, 220 Hannah Technology & Research Center, for processing. Any correspondence from the donor should be attached. ";If. Gifts for research (non-Federal and non-State) of $1,000 or less should be sent directly to University Development for direct deposit in existing sponsored project accounts. Any correspondence from the donor should be attached. Please include ~~ listing the Page 3 ess Procedures, Volume II Revised March 1996 following information:a count number, amount, AES project number (if applicable), name of researcher. Gifts fo more than $1,000 should be routed through Contract and Grant Administration with appropriate forms attached (see procedures at beginning of section 315). :;.E. Official acceptance of all gifts to Michigan State University will be made by the Board of Trustees based upon a consolidated quarterly report of the Vice President for University Development. Only those gifts which are in conformity with the needs of the University will be accepted. The University reserves the right to refuse any gift which is judged to be inconsistent with institutional needs or for which University resources are too limited to properly administer the gift. In addition, only those gifts from which disbursements are to be made on a nondiscriminatory basis will be accepted. III. :;.NONCASH GIFTS/GIFTS-IN-KIND (SECURITIES, REAL ESTATE, MINERAL INTERESTS, OR OTHER PERSONAL PROPERTY). A. Gifts of real and personal property and gifts-in-kind must be documented on a Consignment/Non-Cash Gift Form (seeexhibit, 315-C) and approved by the Secretary to the Board of Trustees for submission to the Board for acceptance. The Office of University Development or the MSU Foundation is to be contacted immediately if gifts of this nature are contemplated. All property or equipment received by the University as a loan should be processed according to instructions in section 224. B. A donor must have a written appraisal from an independent, qualified appraiser for gifts of $5,000 or more. The appraisal must conform to current IRS guidelines. It is the donor's responsibility to secure, arrange and pay for appraisals of gift property, with assistance from University Development. The University may request a second independent appraisal or may require its own appraisal prior to establishing gift value. Contact University Development or the MSU Foundation for further information. <;:. Tax Requirements: Internal Revenue Form 8283,Noncash Charitable Contributions, is required from a donor if the gift is over $500. This form must be signed by the MSU Foundation if the gift is over $5,000. The Internal Revenue Service requires Form 8282 to be completed when the donated property over $500 has been sold, exchanged, consumed or disposed of within two years after the date the originaldonee received the property. The MSU Foundation must be notified of any disposition ofnoncash gifts within the first two years so that they may prepare the proper notification.NOTE: The donor receives a copy of this form. If the selling/disposal price is much lower than the gift value, the donor's charitable gift value could be challenged. IV. ~CONSIGNMENT EQUIPMENT - GIFTS (General Stores, stock number 140-2498; seeexhibit, 315-C). This form should be processed after the gift-in-kind has been received by the University. Documentation for the gift-in-kind (appraisals, etc.) should be attached. Include your common unit code, dat(received, and required signatures as follows: Department Chairperson Dean or Designated Representative MSU Foundation Page4 Manual of Business Procedures, Volume II Revised March 1996 Contract and Grant Administration Inventory Department v. :.FINAL APPROVAL OF GIFTS, GRANTS AND CONTRACTS All gifts, grants or contracts presented to the University must be approved by the Board of Trustees. Contract and Grant Administration will coordinate this activity. VI. :.CASH RECEIPTS Colleges, departments and individuals should process all checks immediately upon receipt as follows: A. Checks received for Contracts and Grants should be forwarded toContrant and Grant Administration for processing. Checks for Gifts should be forwarded to University Development (see procedure, item II.D). Departments and colleges are not permitted to deposit or cash checks. B. When payment for sponsored programs is not received in advance, the Office of Contract and Grant Administration will bill the sponsor according to the terms of the grant or contract. VII. :.EXPENDITURES A. Expenditures of funds must be made in accordance with policies established by the University unless additionally restricted by the terms of the gift, grant or contract. B. MSU employees traveling overseas on University business must provide receipts for all currency exchange transactions. If receipts are unavailable, the employee must certify in writing that all funds exchanged have been accounted for and business expense receipts presented must equal the amount received in local currency. VIII. :.REPORTS A. Project leaders will be responsible for preparing technical reports as required by the terms of the grants and contracts. B. Financial reports for grants and contracts will be prepared by the Office of Contract and Grant Administration and forwarded to sponsors as required. C. Reports of gifts will be prepared and/or coordinated by the Office of the Vice President for University Development. :.SUPPLEMENTARY STATEMENT REGARDING DISPOSITION OF PATENTS Except as otherwise provided, any discovery or invention which results from research carried on by, or under the direction of, any employee of the University and having the Page 5 Manual of Business Procedures, Volume II Revised March 1996 cost thereof paid from University funds or from funds under the control of, or of the employee's duties with the University, or which has been developed in whole or in part by the utilization of University resources or facilities, shall belong to the University and shall be used and controlled in such a manner as to produce the greatest benefit to the University and the public. Any proposed deviation from this standard University patent policy shall be referred to the Vice President for Research and Graduate Studies. IX. ;6EXHIBITS Exhibit 315-A. Transmittal Form for Request for Contract, Grant or Gift Support Exhibit 315-B. Cooperative Research Agreement Exhibit 315-C. Consignment/Non-Cash Gift Form II Page 6 Changes to Section 70 include: I.C.5 clarification regarding where reimbursed airfare may be purchased. l.D updated 11.G.3. added requirement for airfare online reservations (documentation). IV.G.3 . added requirement for airfare online reservations (documentation). V.B.2.g. added requirement for airfare online reservations (documentation).