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Business and Financial Policies and Procedures

1.3.2 Initiation, Review, and Approval of University Contracts and Leases

Contracts, Agreements, and Understandings

A contract is an agreement between the Board of Trustees of the University of Illinois and one or more other parties that creates legally enforceable obligations. No matter what the agreement is called (e.g., memorandum of understanding, memorandum of agreement, or letter of intent), the document must be drafted, reviewed, and approved in accordance with this policy. However, agreements between units of the are not contracts and are not covered by this policy.

The comptroller is the general fiscal officer of the board and is authorized to approve and execute contracts, on behalf of the board, not expressly requiring prior, specific Board authorization.

As a general rule, all contracts (including renewals and amendments) regardless of funding (revenue, expenditure, or no funds), must be signed by each party’s authorized signatory. The comptroller is the University’s authorized signatory. In the case of a unilateral contract, only the party with the legal obligation to perform may need to sign. Additionally, Illinois law requires that expenditure contracts valued at $250,000 or more be approved by the president and the university counsel.

The comptroller may delegate 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 president and university counsel may delegate their contract approval authority. Delegates who approve contracts on behalf of the president and university counsel must have express authority to do so, unless otherwise provided for in this policy.

The Secretary of the Board of Trustees is responsible for maintaining the central contract repository for the System. The secretary has delegated central contract repository responsibilities 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 System-wide policies and the respective college/department. However, neither faculty nor staff has authority to bind the University of Illinois System, verbally or in writing, to a contract.

Illinois Contract System (iCS)
Illinois Contract System (iCS) is the System's electronic contract management system. Units using iCS are able to develop and route their contracts electronically, instead of in paper form.

For more information regarding iCS, including job aids, training opportunities, troubleshooting, FAQs, who to ask for help, and more, consult the iCS Resource Page.

Contract Process

Contract Initiation
Contracts are initiated by the faculty and staff best acquainted with the subject matter and who have responsibility 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. Counsel review should be sought when assistance is needed in evaluating a contract's required legal form and institutional legal risk. The Office of Business and Financial Services (OBFS) will ensure appropriate Counsel review for all contracts processed by OBFS.

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 approval
  • Contracts to be submitted to the board for specific approval
  • Settlements of claims or disputes
  • Revenue generating healthcare contracts
  • 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
The Contract Approval/Routing Form (CARF) or the electronic checklist in iCS is required to document the approval of the contract by the unit head responsible for the performance of the contract and any additional required approvals from higher level offices. These approvals are filed with the contract.

For all contracts routed in paper form, a completed CARF, with all required signatures, must be included when submitted to OBFS for the comptroller's signature. For contracts developed and routed in iCS, approvals are obtained electronically, within the system, in lieu of signatures on a CARF. This is done through an electronic checklist in iCS. For research contracts, contact your university sponsored programs office for routing and approval requirements. Capital Programs and Real Estate Services provides routing and approval requirements for capital contracts.

University Units
Required signatures on the CARF (or required electronic approvals if using iCS) for university units include:

  • The unit head responsible for the performance of the contract
  • The dean or director of the unit for all contracts with a total dollar value of:
    • $25,000 or more at UIS
    • $50,000 or more at UIC or UIUC
  • The university chancellor/vice president or vice chancellor for all contracts with a total dollar value of:
    • $50,000 or more at UIS
    • $150,000 or more at UIC and UIUC
The signature (or electronic approval) of the next higher level administrator for a given contract negates the need for approval(s) at a lower level. In consultation with university administration (at the chancellor or provost office level), each university OBFS chief business officer may impose more restrictive approval thresholds on individual units, as warranted.
UIC & UIUC
The dean/director approval can be delegated. The unit must maintain documentation of such delegation.
UIS
Delegation of approval is not permitted at UIS.

System Offices Units
Required signatures on the CARF (or electronic approvals on the iCS checklist) for units of System Offices include:

  • The director responsible for the performance of the contract.
  • The executive director or next higher level of approval for all contracts with a total value of $50,000 or more.
  • The assistant vice president or next higher level for all contracts with a total value of $150,000 or more.

The executive director approval can be delegated. Units must maintain documentation of such delegation.

The signature (or electronic approval) of the next higher level administrator for a given contract negates the need for approval(s) at a lower level. In consultation with system-level executive officers, the senior associate vice president for business and finance (SAVP) may impose more restrictive approval thresholds on individual units, as warranted.

Final Form and Execution
Only contracts in their final form, with a fully-signed CARF (or fully approved checklist in iCS), may be submitted for the comptroller's signature. Contracts are considered "fully executed" when they bear all required signatures.

Recording and Filing
All contracts, regardless of funding (revenue, expenditure, or no funds), that require the comptroller's signature must be filed in iCS, unless otherwise provided for in this policy.

To meet System and state of Illinois filing requirements, units not developing and routing contracts within iCS must ensure that all fully-executed contracts, along with signed CARF (when required), are filed with the UCRO within seven calendar days after execution.

When the following unaltered standard contract templates for under $10,000 are executed outside of iCS, units must retain a copy of the fully-executed standard contract and do not need to submit these to UCRO:

In addition, when authority has been granted to a unit to sign a unit-specific contract template less than $10,000, and the contract is executed outside of iCS, units must retain a copy of the fully-executed standard contract and do not need to submit these to UCRO.

Standard and Non-standard Contracts

Standard Contract Templates
OBFS and Counsel created several pre-approved ("standard") contract templates to facilitate some common business transactions. Units may use these standard contract templates to expedite the contract process provided the terms of the contract require no alteration to the template language or legal form. Many of these standard contract templates are available at Contracts Forms (links also provided below) and in iCS.

The following standard contract templates must be submitted to OBFS, along with the appropriate, fully-signed CARF, or routed via checklist in iCS, for the comptroller's signature:

The following standard contract templates (if unaltered) do not need to be submitted to OBFS and do not require a CARF, but do require the use of a checklist if developed and routed in iCS, and may be executed by the unit head in the name of the comptroller. The unaltered template must be printed and signed by hand. Unit heads will sign the comptroller's name and their own name on these standard contract templates. This signature delegation is granted only to the unit head and cannot be further delegated by a unit head to another employee. In rare situations, a request for an exception can be submitted to the university OBFS chief business officer or the AVP for procurement services (for procurement-related contracts). Documented approval by the university OBFS chief business officer or the AVP for procurement services (for procurement-related contracts) is required for any exception.

For units that develop and route these templates in iCS, they must scan and upload the fully-executed agreement into iCS, and complete all checklist items. However, when these standard contract templates are executed outside of iCS, units must retain a copy of every fully-executed standard contract signed by the unit head in the name of the comptroller. These do not need to be submitted to UCRO.

Note: If changes are made to a standard contract template, the contract cannot be executed by the unit head. Instead, the contract must be submitted with the appropriate, fully-signed CARF (or checklist in iCS), for the comptroller's signature.

Unit-specific Contract Templates

OBFS and Counsel 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 (or checklist in iCS), must be submitted for the comptroller's signature.

From time to time, the university OBFS chief business officer or the AVP for procurement services (for procurement-related contracts) may authorize a unit head, or other designated employee, to execute in the name of the comptroller, unaltered, unit-specific templates for amounts less than $10,000. Unit heads and/or designated employees 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. The comptroller signature delegation cannot be further delegated to another employee.

When these unit-specific contract templates (if unaltered) are developed and routed in iCS, they must be printed and signed, by hand, by the unit head or designated employee. Unit heads and/or designated employees sign the comptroller's name and their own name on these unit-specific contract templates for less than $10,000. The contract must then be scanned and uploaded to iCS and all checklist items completed.

Units are responsible for ensuring their unit-specific templates are in compliance with System-wide 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.

Note: If changes are made to a unit-specific template, the contract cannot be executed by the unit head or designated employee. Instead, the contract must be submitted with the appropriate, fully-signed CARF (or checklist in iCS), for the comptroller's signature.

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. If a standard contract template is modified, it becomes a non-standard contract. The appropriate, fully-signed CARF (or checklist in iCS) must accompany every non-standard contract submitted for the comptroller's signature.

Amendments
Contract amendments are contracts. All amendments (including those to standard contract templates signed by a unit head) must be reviewed and routed for final signature in accordance with this policy, along with the CARF (or checklist in iCS). The university counsel and president must approve any contract amendment that increases the value of the original contract either to or by $250,000 in a fiscal year. To expedite processing in hard copy, attach a copy of the original contract and all previous amendments.

UIUC - Technical Testing Services Agreement
In order to provide technical testing services, the System must first enter into an agreement using the Technical Testing Services Agreement template, as noted in 16.4.2. Two templates are available for use, one for services with value of $10,000 or more, and another for services with a value less than $10,000.

The unit providing the testing services must submit a Pre-Award Intake Form (PAIF) and Proposal Intake Form (PIF) to the Office of Sponsored Programs if (1) the value of the services is $10,000 or more, or (2) service value is less than $10,000 and the customer or client requests modifications to the template language. The resulting testing agreement will require signatures of the unit head, the responsible faculty member, and an authorized representative of the other party. The Office of Sponsored Programs reviews and approves the documents, and affixes the signature of the comptroller.

If the value of the testing agreement is less than $10,000 and the template is unaltered, the applicable template agreement shall be printed and signed, by hand, by the unit head. The unit head will sign the comptroller's name and their own name on this standard contract template. In addition, the faculty member must sign as the University Technical Contact. The comptroller signature delegation is granted only to the unit head and cannot be further delegated by a unit head to another employee. If changes are made to the standard contract template, the unit head may not execute the agreement. Instead, it must be submitted to the Office of Sponsored Programs for review and comptroller signature with the PAIF and PIF, as described above. Units must retain a copy of every fully-executed standard contract signed by the unit head in the name of the comptroller.

A copy of the executed contract and a budget for the technical testing services should be sent to the Grants and Contracts Office, Post-Award Administration, 1901 S. First Street, Suite A, MC-685, Champaign, IL 61820. Testing services should not commence until there is a fully executed agreement.

UIUC – Facility Use Agreement – research space or specialized equipment

In order to provide access to research space or specialized equipment, the System must first enter into an agreement using the Facility Use Agreement template. Two templates are available for use, one for facility use with value of $10,000 or more, and another for facility use with a value less than $10,000.

The unit providing the facility must submit a Pre-Award Intake Form (PAIF) and Proposal Intake Form (PIF) to the Office of Sponsored Programs if (1) the value of the facility usage is $10,000 or more, or (2) value is less than $10,000 and the customer or client requests modifications to the template language. The resulting facility use agreement will require signatures of the unit head, the responsible faculty member, and an authorized representative of the other party. The Office of Sponsored Programs reviews and approves the documents, and affixes the signature of the comptroller.

If the value of the facility use agreement is less than $10,000 and the template is unaltered, the applicable template agreement shall be printed and signed, by hand, by the unit head. The unit head will sign the comptroller's name and their own name on this standard contract template. In addition, the faculty member must sign as the University Technical Contact. The comptroller signature delegation is granted only to the unit head and cannot be further delegated by a unit head to another employee. If changes are made to the standard contract template, the unit head may not execute the agreement. Instead, it must be submitted to the Office of Sponsored Programs for review and comptroller signature with the PAIF and PIF, as described above. Units must retain a copy of every fully-executed standard contract signed by the unit head in the name of the comptroller.

A copy of the executed contract and a budget for the facility usage services should be sent to the Grants and Contracts Office, Post-Award Administration, 1901 S. First Street, Suite A, MC-685, Champaign, IL 61820. Services should not commence until there is a fully executed agreement.

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.

Construction/Repair of Buildings

Facility Use Agreements

Financial Assistance and Sponsorship Payments to Outside Organizations
Units may propose financial assistance to a non-University entity by sending the request with detailed information to the appropriate OBFS office:

Leases for Real Property

Purchase of Goods or Services

Revenue Generating Agreements

Sponsored Program Contracts

System-owned Intellectual Property

 UIUC Technical Testing Services Agreements

Other Contracts

Other Resources

Contract-related Forms

Illinois Contract System (iCS)

  • iCS Resources (information to help you develop and process contracts electronically)

Related Policies and Procedures
1.3.1 Approval of Financial Documents
22.1 Contracts for Revenue Generating Activities
7 Purchasing - information about procuring goods and services, bid limits, the bidding process, iBuy, Banner, and P-Card requisitions.
16 Grants and Research Contracts - pre-and post-award information and campus-specific process requirements, processes, and forms.
16.4.2 Technical Testing Services Agreement (UIUC Supplement)
17 Consultants and Independent Contractors

Definitions

Contract - an agreement between the University of Illinois System and one or more other parties, creating obligations that are legally recognizable or enforceable.

University OBFS Chief Business Officer -

  • UIUC: Assistant Vice President for Business and Finance
  • UIC: Assistant Vice President for Business and Finance
  • UIS: Director of Business Services
  • System Offices: 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 dean or associate dean as "unit head."

Responsibilities
The board authorizes the university counsel and the chief financial officer/vice president/comptroller to approve this contracting policy.

Who to Ask

All universities
     Office of University Counsel
     Purchasing Division
     University Contract Records Office - Phone: 217-244-5427

UIC
     Office of Business Development Services (OBDS)
     Office of Research Services (ORS)

UIS
     Grants, Contracts, and Research Administration

UIUC
     Contract Services Office (CSO)
     Office of Sponsored Programs (OSP)

Last Updated: May 5, 2017 | Approved: Senior Associate Vice President for Business and Finance and University Counsel | Effective: August 5, 2013

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