Accounts Payable Policies: Non-Employee Expenses
Contract Requirements. Contracts with non-employee individuals for the provision of goods and/or services to the University should be prepared in writing before any goods/services are provided and, at a minimum, should include the following:
Full business name, personal name, and address of the independent contractor.
Business tax identification number (either Social Security No. or Federal Employer Identification No.) Note: For confidentiality purposes, a tax identification number should not be included in the body of the contract. Rather, a Form W-9 should be requested by the department, completed by the service provider and submitted directly to the UNK Accounts Payable office.
- A full description of the goods/services to be provided the University.
- A full description of any in-kind goods/services to be provided by either the University or the contractor.
- A full description of the arrangement for reimbursement of out-of-pocket expenses to the contractor.
- The time period during which the goods/services are to be provided.
- If the service provider is represented by an agent or intermediary, a
full description of the relationship between the service provider and/or
the agent or intermediary.
- Full description of the University's payment obligation. This includes a description of any prepayment or refund provisions or timelines and a clear designation of who is to be paid if the service provider is represented by an agent or intermediary.
- Original signature of the University official authorizing the contract. This must be an individual who is officially designated by the Vice Chancellor for Business and Finance to enter into a contractual relationship on behalf of the University. (If the total contract payment equals or exceeds $1,000, the contract must be signed by Barbara Johnson, Vice Chancellor of Business and Finance or her Assistant Vice Chancellor.)
- Original signature of the goods/service provider or his agent/intermediary, when appropriate. (Note: A facsimile (fax) or electronic signature is acceptable in lieu of the goods/service provider's (or agent's) original signature if a ready determination can be made that the facsimile (fax) came directly from the signer.)
- A completed Notice to Out-of-State Provider of Personal Services form should be completed by any out-of-state service provider and attached to the contract along with a completed Form W4-NA, if applicable. This form may not be completed on the service provider's behalf by an agent or intermediary.
- A completed U.S. Citizenship Attestation Form. Effective October 1, 2009, any individual employed by the University of Nebraska, providing independent contractor services for the University of Nebraska, or otherwise seeking public benefits from the University of Nebraska must attest that she/he is legally present in the United States and when applicable, is eligible to work. This form may not be completed on the service provider's behalf by an agent or intermediary. (Note: If there are more than one individuals performing the services,in lieu of requiring each individual performing services to complete and submit a separate U.S. Citizenship Attestation Form, when appropriate, language may be added to the contract to cover the requirements. Please see State Regulations for more information.)
- See Non-Resident Alien Services/Expenses below for more
information regarding contracts involving service providers who are not
US Citizens and/or are not permanent residents of the United States.
The Non-employee Service and Expense Reimbursement Agreement form may be used to fulfill the requirements of a simple written contract.
Employee vs Independent Contractor?
Non-Employee Food/Meal Expenses.
Non-Employee Expense Reimbursements.
Out-of-Pocket Expenses. Arrangements with non-employee individuals for the reimbursement of out-of-pocket expenses incurred for legitimate business purposes during the business relationship with the University should be documented in the written contract with the individual. IRS rules will be followed in determining the taxability of expense reimbursements paid to non-employees.
Direct Billing. Departments are encouraged to arrange for non-employee travel accommodations (except meals) in advance in the same way arrangements are made for employee travel. Those arrangements should include, when possible, agreements with vendors to bill the University directly for those expenses.
Documentation. Documentation requirements for non-employee expense reimbursements include original copies of the completed Non-employee Service and Expense Reimbursement Agreement form, original vendor invoices or receipts, and copies of letters, agendas or other information describing the purpose or benefit for which the non-employee was invited to campus. This documentation should be submitted to the Accounts Payable office for review. (See also Candidate (Job applicant) Expenses and Independent Contractor Services / Honoraria.)
Definition. "Volunteers" shall mean those persons providing services to the University who are not being compensated for their time.
Allowed Expenses. The University may pay for the reasonable and necessary expenses for the recruitment, training, utilization and recognition of volunteers providing services to the University under a recognized program.
Recognized Program. In order to be a recognized volunteer program, a written program description complying with State specifications must be submitted to the Vice Chancellor of Business & Finance for approval, who, in turn, must submit the program to the State of Nebraska for final approval.
Non-Resident Alien Services/Expenses.
Non-Citizens of the U.S. Before contracting for services with an individual who is not a citizen of the United States of America, nor whom has permanent residence in the United States, tax reporting matters and visa type issues must be resolved. Please contact the Accounts Payable office (865-8419) for assistance as soon as a decision is made to invite the non-resident alien individual to campus. The preliminary paperwork involved can sometimes take a lengthy amount of time to prepare and must be in place before services are rendered.
Out-of-state Individuals Performing Services in Nebraska. See Withholding on Non-resident Alien Personal Services.
Independent Contractor Services/Honoraria.
Tax Reporting Status. Before contracting for services with an individual who is not an employee of the University, a determination should be made of what the status of that individual is to be with regard to tax-reporting issues. See Employee vs Independent Contractor.
Contract Required. For individuals who will be paid as independent contractors, the State requires a written contract be prepared and negotiated between that individual and the University before services are rendered. See Contract Requirements