Section 2.3 - Initiation, Review, and Approval of University Contracts and Leases
Date: July 2011
Approved: University Comptroller and University Counsel
The University Comptroller is the general fiscal officer of the Board of Trustees of the University of Illinois and is authorized to approve and execute, on behalf of the Board, contracts not expressly requiring prior, specific Board authorization.
Contracts (including renewals and amendments), regardless of funding (revenue, expenditure, or no funds), must be signed by all parties obligated by the contract. Additionally, Illinois law requires that expenditure contracts valued at $250,000 or more be signed also by the President of the University and the University Counsel.
The President, Comptroller, and University Counsel may delegate their contract execution authority. Delegates who sign contracts on behalf of the Comptroller must have express authority to do so, unless otherwise provided for in this policy. Comptroller delegates are responsible for ensuring all required approvals are received and appropriate legal review is complete, before affixing the Comptroller’s signature to a contract.
The Secretary of the Board of Trustees is responsible for maintaining the central repository for University contracts. The Secretary has delegated central repository responsibilities for these contracts to the University Contract Records Office (UCRO), except for legal settlements, real estate sales and acquisitions, and certain employment agreements which are filed directly with the Secretary’s office.
Faculty and staff may conduct preliminary negotiations with prospective research sponsors and prospective sponsors of revenue generating activities, in accordance with the policies of the University and the respective college/department. However, neither faculty nor staff have authority to bind the University, verbally or in writing, to a contract.
Contract Development Cycle
Contract Initiation
Contracts are initiated by the University faculty and staff best acquainted with the subject matter and responsible for the performance of the contract.
Legal Review
The Office of University Counsel (Counsel) must review and approve certain contracts as to legal form and validity. Counsel review may be requested for any contract (including “agreement” and “memorandum of understanding”), and should be sought by anyone needing assistance in evaluating a contract’s required legal form and institutional legal risk.
The following contract types require documented approval from Counsel (as to legal form and validity) prior to being signed by the Comptroller (or delegate):
- Contracts that require the President’s signature.
- Contracts to be submitted to the Board of Trustees for specific approval.
- Settlements of claims or disputes.
- Revenue generating healthcare contracts at the Chicago campus.
- Contracts for legal services.
- Contracts related to the sharing of student data with outside entities.
- Employment-related contracts, such as separation agreements.
Contract Approval and Routing Form
A completed Contract Approval/Routing Form (CARF), with all required signatures, must be included with all contracts submitted for the Comptroller’s signature. A CARF is not required for contracts processed by campus sponsored programs offices.
The CARF documents the contract’s approval by the unit head responsible for the performance of the contract, and is filed with the contract.
Required signatures on the CARF include:
- The unit head responsible for the performance of the contract.
- The dean or director of the unit for all contracts valued at $25,000 or more.
- The campus Vice President/Chancellor or Vice Chancellor (or CEO at the Chicago campus) for all contracts valued at $50,000 or more.
- The Vice President/Chancellor or Vice Chancellor (or CEO at the Chicago campus) for all revenue generating contracts at the Chicago campus.
Final Form and Execution
Only contracts in their final form, with a fully-signed CARF, may be submitted for the Comptroller’s signature. Contracts are considered “fully executed” when they bear the signatures of all parties obligated by the contract, including the University Comptroller (and the University President and University Counsel when required).
Recording and Filing
All contracts, regardless of funding (revenue, expenditure, or no funds), that require the Comptroller’s signature must be filed with the University Contract Records Office (UCRO). To meet University and State of Illinois filing requirements, units must ensure that all fully-executed contracts, along with signed CARF, are filed with the UCRO within seven calendar days after execution.
Standard and Non-standard Contracts
Standard Contract Templates
OBFS and Counsel have created several preapproved (“standard”) contract templates to facilitate some common business transactions. To expedite the contract process, units may use these templates when the terms of the contract require no alteration to the template language or legal form.
The following standard contract templates must be submitted, along with the appropriate, fully-signed CARF, for the Comptroller’s signature:
The following standard contract templates (if unaltered) do not require a CARF and may be executed by the unit head in the name of the Comptroller. Unit heads will sign the Comptroller’s name and their own name on these standard contract templates. Units must retain a copy of every fully-executed standard contract signed by the unit head in the name of the Comptroller.
Note: If changes are made to a standard contract template, the contract must be submitted, along with the appropriate, fully-signed CARF, for the Comptroller’s signature.
Unit-specific Contract Templates
OBFS and Counsel will work with individual units to create contract templates when there is a demonstrated business need. These unit-specific templates, accompanied by a fully-signed CARF, must be submitted for the Comptroller’s signature.
From time to time, the campus OBFS executive officer may authorize a unit head to execute, in the name of the Comptroller, unaltered, unit-specific templates for amounts less than $5,000. Unit heads will sign the Comptroller’s name and their own name on these unit-specific contract templates. Units must retain a copy of all contracts executed using this authorization.
Units are responsible for ensuring their unit-specific templates are in compliance with University rules and policies, and correct legal form. As a best practice, units are encouraged to submit their templates to OBFS and Counsel for review and approval every two years.
Non-standard Contracts
All contracts, agreements, purchase orders, proposals, memoranda, letters of understanding, and other such documents having no Counsel-approved standard template, whether received from an outside party or created within a University unit, are considered non-standard. The appropriate, fully-signed CARF must accompany every non-standard contract submitted for the Comptroller’s signature.
Amendments
Contract amendments are contracts. All amendments (including those to standard templates signed by a unit head) must be reviewed and routed, along with the appropriate fully-signed CARF, for final signature(s) in accordance with the requirements of this policy. To expedite processing, attach a copy of the original contract and all previous amendments.
How to Begin, and Where to Find On-going Assistance, by Contract Type
The contracting unit is primarily responsible for management and administration of its contracts. However, units must work with one or more of the following offices to ensure contracts are correctly developed, written, and submitted.
Sponsored Project Contracts
Purchase of Goods or Services
Construction/Repair of Buildings
Leases for Real Property
Revenue Generating Agreements
University-owned Intellectual Property
To Create Unit-specific Contract Templates
All Other Standard and Non-Standard Contracts
Legal Review (Required or Optional)
Contract-related Forms
Related Policies and Procedures
Section 2.2 - Approval of Financial Documents
Section 5 - Receivables
Section 7 - Purchasing – for information about procuring goods and services, bid limits, the bidding process, ibuy, Banner, and P-Card requisitions.
Section 16 - Grants and Research Contracts – for pre-and post-award information and campus-specific process requirements, processes, and forms.
Section 17 - Consultants, Independent Contractors, and Honoraria
Definitions
Contract -- an agreement between the University and one or more other parties, creating obligations that are legally recognizable or enforceable.
OBFS executive officer --
- At UIUC: Assistant Vice President for Business and Finance
- At UIC: Executive Assistant Vice President for Business and Finance
- At UIS: Director of Business Services/Purchasing
- For UA: Senior Associate Vice President for Business and Finance
Unit Head -- a unit head is a department head or higher. Some units do not have department heads; some small colleges do not have departments. When there are only College-level offices for administration, signature should be that of the Associate Dean or Dean as “unit head.”
Responsibilities
The Board of Trustees authorizes the University Counsel and the Chief Financial Officer/Vice President and Comptroller to approve this contracting policy.
Who to Ask
Purchasing Division – all campuses
Office of University Counsel – all campuses
University Contract Records Office – all campuses -- Phone: (217) 244-0056 Fax: (217) 239-6934
Office of Business Development Services (OBDS) at Chicago
Office of Research Services (ORS) at Chicago
Grants, Contracts, and Research Administration at Springfield
Office of Sponsored Programs and Research Administration (OSPRA) at Urbana
Contracts (for the Urbana Campus) – comprehensive information about Urbana contract types, the contract review process, and answers to questions.
Please send questions regarding this policy manual to OBFSPolicies@uillinois.edu.
Last Updated: April 3, 2012