GAP 200.134, All Other Payments to Individuals for Services

I.   General

II.  Process Overview

III. Detailed Responsibilities for Engaging and Paying Individuals

 

Note: For charging a restricted grant or contract, please refer to GAP 200.370, Purchasing Services on Sponsored Funds

 

I. General

This procedure is to be used when engaging and paying individuals for a specified time period to give professional advice or to render professional service for a fee. Examples include technical specialists, photographers, and consultants.

Services listed below are covered in a separate procedure:

• GAP 200.130, Guest Speakers, Conference Participants, and Honoraria Recipients
• GAP 200.131, Architects, Engineers, Attorneys or Auditors
• GAP 200.133, Instructors and Lecturers (Non-faculty)

This procedure will provide you with the information to determine what forms you need to complete, and the process for engaging and paying individuals. The GAPs referenced and linked will provide you with the specific process and approval procedures.

If an individual is hired to perform services, you must first determine if the relationship is that of an independent contractor or an employee-employer. The Independent Contractor Checklist (ICC) is the established tool to make this determination.

If the person hired is already a Duke employee, he or she must also be treated as an employee for these services and paid through the payroll system. Otherwise, whether an employer-employee relationship exists generally depends on a single factor: the degree to which the University or Health System has a right to direct and control the worker, not only as to the result to be accomplished, but also as to the details and means by which that result is to be achieved. The ICC is designed to include the IRS defined characteristics to help determine whether the individual can be classified as an independent contractor.

Payments to individuals who are U.S. citizens and permanent residents, other than for reimbursement of properly substantiated travel and other expenses, are reportable to the Internal Revenue Service. Thus, the payee's name, permanent address and social security number are required on the appropriate form in order to pay the individual.

If the payee is a non-resident alien (not a U.S. citizen or not possessing a green card) the Required Documentation for Payments Issued to Foreign Nationals document available through Accounts Payable details the required documentation.

The G/L account used for payments to individuals classified as independent contractors is generally 622000, Professional Services.

 

II. Process Overview

Complete the Independent Contractor Checklist (ICC). Based on the results of the checklist:

• If the individual is determined to be an employee, he or she must be paid through the payroll system.
• If the individual is determined to be an Independent Contractor; who is performing consulting services where the total cost of the engagement is less than or equal to$2,500, and the service is not involving patient care or access to patient information,  submit an Accounts Payable Check Request, completed ICC, and invoice or documentation to Accounts Payable. (DUHS departments must first route the forms to the appropriate Health System Finance Office for approval.) GAP 200.136, Accounts Payable Check Request details the specific procedures and approvals required for the Accounts Payable Check Request.
• If the individual is determined to be an Independent Contractor: who is performing consulting services where the total cost of the engagement is greater than $2,500, or the service is involving patient care or access to patient information, printing or design work, temporary staffing agency, travel agency or construction, select one of the following options.

 

III. Detailed Responsibilities for Engaging and Paying Individuals

This section provides a step by step listing of the responsible party and the action to be taken for the process of engaging and paying individuals. It will repeat some items that are included in the general and overview sections, including the Reference Chart for Obtaining and Paying for Outside Services, Independent Contractor Checklist (ICC), Outside Services Agreement (OSA), and the Research Support Services Agreement (RSSA).

DEPARTMENT INITIATOR RESPONSIBLE FOR ACTIONS

Before the individual begins work:

1. Complete the Independent Contractor Checklist (ICC).

2. If the ICC questions have more ‘No’ answers than ‘Yes’ answers (ignoring NAs and Unknowns), the individual is considered an employee, per IRS guidelines, and must be paid through the Payroll system.
   If the ICC questions have more ‘Yes’ answers than ‘No’ answers, proceed to Step 3.

3. Select from below:

a.  If the total cost of the engagement will be less than or equal to $2,500 and the service is not involving patient care or access to patient information, printing and design, temporary staffing services, travel agency services, or construction you do not need to follow the rest of this  procedure. After the services are performed, complete an Accounts Payable Check Request, providing information regarding the nature and scope of work performed, rates, etc. Submit the Check Request, completed ICC, and invoice or documentation to Accounts Payable.

• DUHS departments must first route the forms to the appropriate Health System Finance Office for approval. GAP 200.136, Accounts Payable Check Request details the specific procedures and approvals required for the Accounts Payable Check Request

b.  If the total cost of the engagement will be less than $2,500 or the service is involving patient care or access to patient information, printing and design, or temporary staffing agency, a travel agency or construction review options i, ii, or iii and determine which best matches your situation. If you determine options i or ii are appropriate read the caution note below and proceed to Step 4.

i.   For Restricted grant/contract WBS elements (30x to 35x, or 38x): complete an RSSA. For questions regarding completing the RSSA form please contact your Pre-Award office. Proceed to Step 4.

ii.  For all other cost objects if services are Category 1 type services (refer to section II) or involves patient care, access to patient information, printing or design work, temporary staffing agency, travel agency or construction: complete an OSA. When informed early in the process, Procurement Services will assist in completing the OSA form (call 919 681-5900 for assistance). Proceed to Step 4.

iii. For all other cost objects if the services are Category 2 type services (refer to section II): After the services are performed, submit an Accounts Payable Check Request, completed ICC, copy of the contract, and invoice or documentation to Accounts Payable.

    You do not need to follow the rest of this procedure.

• DUHS departments must first route the forms to the appropriate Health System Finance Office for approval. GAP 200.136, Accounts Payable Check Request details the specific procedures and approvals required for the Accounts Payable Check Request.

DEPARTMENT INITIATOR RESPONSIBLE FOR ACTIONS:

4. Complete a Buy@Duke Text Shopping Cart.

5. Obtain departmental approval on the RSSA or OSA from Department Chair/Director. Unit approval for Buy@Duke Text Shopping Carts obtained through approval workflow.

6. Select from below:

a.  For Restricted grant/contract WBS elements (203, 30x to 35x, or 38x) forward all forms to the appropriate Pre-Award Office for approval.

Office of Research Support or
Office of Research Administration

b.  If the cost object charged is not a restricted grant or contract, forward all forms to Procurement Services and skip to step 11.

STEPS 7 THROUGH 10 ARE FOR RESTRICTED WBS ELEMENTS ONLY.

PRE-AWARD OFFICE RESPONSIBLE FOR ACTIONS:

7. Ensure that intended purchase of service is in compliance with the provisions of the grant or contract before a Purchase Order is issued.

8. Ensure that sponsor guidelines for the rate of compensation for consultants are observed.

9. Obtain agency/sponsor approval if necessary.

10. Forward approved package to Procurement Services.

PROCUREMENT SERVICES RESPONSIBLE FOR ACTIONS:

11. Review forms (ICC and RSSA/OSA) for completeness, accuracy and compliance with established Policies.

12. Process forms, provide final approval and sign the RSSA/OSA on behalf of Duke.

13. Issue a bona fide contract (Purchase Order and attachments or RSSA/OSA) to the independent contractor.

14. Distribute a copy of the approved RSSA/OSA to the department, along with the Purchase Order.

DURING AND AFTER THE SERVICES HAVE BEEN PERFORMED

DEPARTMENT INITIATOR RESPONSIBLE FOR ACTIONS:

15. Monitor performance, evaluate quality of the work, and review progress made against the project time schedule.

16. Ensure that the work is being done according to the terms and conditions of the contract.

17. Review and approve expenditures and billing, ensuring that billings are current and reasonable compared to progress reports, effort expended and travel incurred.

18. Approve the invoice for payment. Note the Purchase Order number on the invoice and forward it to Accounts Payable.

MODIFICATIONS

PRE-AWARD/PROCUREMENT SERVICES RESPONSIBLE FOR ACTIONS:

19. Any revision or modification to the signed contract must be in writing. The Department, Pre-award Office, and Procurement Services must approve changes to restricted WBS elements. The Department and Procurement Services must approve changes to non-restricted cost objects. Upon agreement, if a Purchase Order was issued, Procurement Services will issue a change order to document the contract revisions.