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Business and Financial Policies and Procedures

Section 1 Introduction to Business and Financial Functions at the University of Illinois - Printer Friendly Version

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Section 1 Introduction to Business and Financial Functions at the University of Illinois

 

The University of Illinois is subject to and complies with a variety of federal and state financial requirements and generally accepted accounting principles which may be different from those governing other businesses. The OBFS Policies and Procedures Manual includes the policies and procedures to follow for complying with these requirements as they relate to your unit's business functions.

Section 1 provides an overview of the University's financial functions. The scope and diversity of University activities and facilities are more complex than those normally found in a single corporate entity. The complexity of University business operations is the result of our size, scope, and diversity and the external regulations that shape our policies and procedures.

1.1 Introduction to the unique business environment at the University.

1.1.1 How the University Measures the Financial Health of Units
1.1.2 How the Unit Financial Report Calculates Unit Flexible and Inflexible Fund Cash
1.1.3 How the University Compiles its Annual Financial Report
1.1.4 How the University Reports Tuition and Fee Waivers
1.1.5 How Accounting is Conducted at the University of Illinois
1.1.6 How the President Certifies Fiscal Compliance

1.2 Responsibilities

1.2.1 Business and Financial Responsibilities
1.2.2 Introduction to Unit Head Financial Responsibilities

1.3 Financial Documents

1.3.1 Approval of Financial Documents
1.3.2 Initiation, Review, and Approval of University Contracts and Leases
1.3.3 What Approving or Signing a Document Means
1.3.4 Funding Language for Board of Trustees Roll Call Items and Contracts

1.4 Records Management

1.4.1 University Business and Financial Records Management

1.5 Conducting Business Outside of Illinois

1.5.1 How to Conduct Business Outside the State of Illinois

1.6 Ethics and Compliance

1.6.1 Comply with Anti-Bribery Laws
1.6.2 Reporting Fraud or Misconduct, Whistleblower Protection, and Investigations

1.1.1 How the University Measures the Financial Health of Units

Units have the primary responsibility for monitoring and evaluating the financial health of their unit to be sure University financial resources are managed properly. OBFS relies on the unit's financial information to gain an accurate picture of the University's overall financial condition. Mechanisms to do this include:

  • The Unit Annual Financial Report - Campus budget offices prepare the Unit Annual Financial Report for the previous fiscal year. The Office of the Provost/OBFS distributes the Report to the units. If needed, the Office of the Provost/OBFS meets with the unit to discuss the unit's financial health. OBFS provides a summary report of all units for University officers.
  • The FCIAA Questionnaire - This is the mechanism the University uses to report its internal control compliance. For additional information, consult the OBFS webpage on Fiscal Control and Internal Auditing Act (FCIAA).
  • Biennial Inventory - Each unit must ensure completion of the biennial moveable equipment inventory and prompt follow-up and disposition of unreconciled moveable equipment items according to the steps in Biennial Inventory.

The Unit Annual Financial Report summarizes the unit's financial performance as measured against the four standards below:

  • Cash Standard - Is the unit solvent or insolvent?
  • Equity Standard - Does the unit have equity in its current assets or is it in an unfavorable financial position?
  • Revenue and Expense Standard - Does the unit generate operating revenue equal to or exceeding its operating expenses?
  • Balance Reporting Standard - Does the unit maintain a positive cash balance in each fund type?

Cash Standard

The Unit Annual Financial Report measures net fund balance, utilizing the "net flexible funds" amount at the end of the fiscal year. A net flexible cash balance indicates the unit is solvent. A net flexible cash deficit indicates the unit is insolvent.

The Unit Annual Financial Report also displays the unit's net flexible funds cash balance as a percent of total fiscal year expenditures. For details on fund types used to calculate net fund balances, consult 1.1.2 How the Unit Annual Financial Report Calculates Flexible and Inflexible Fund Cash.

Revenue and Expense Standard

Operating revenue generated by a unit in the fiscal year should generally equal or exceed its operating expenses. Operating revenue includes state and institutional funds allocated to the unit, gifts, endowments, grants, contracts, and other revenue generated by the unit. A unit meets the revenue and expense standard if:

  • The unit has an operating gain for the fiscal year

  • OR
  • The unit has sufficient carry-forward funds from prior fiscal years to cover an operating loss for the fiscal year and the operating loss was the result of planned expenditure of funds accumulated in prior years for a specific purpose.

Balance Reporting Standard

Each unit should have and maintain a positive balance in each of its operating funds and on a roll-up basis for its institutional funds.

In addition, OBFS reviews inactive funds (that is, funds with no activity in the current fiscal year), requests that units review the continuing need for inactive funds, and closes inactive funds that are no longer necessary.

The use of cash balance and/or equity (fund balance) standards in the determination of overdrafts for individual fund sources is at the discretion of each campus chief business officer or the Senior Associate Vice President for Business and Finance for University of Illinois System Offices units. Each year, units with a deficit of $10,000 or more are notified by the Provost and/or OBFS and provided with forms, instructions, and a deadline for submitting the required remedial business plan.

You may not have to file a business plan to eliminate a deficit of $10,000 or more if one of the following exceptions is met:

  1. You knew you would have a planned deficit which could be a mechanism for overall University or campus funds management purposes, if you:
    • Have prior written approval of your campus chief business officer or designee (the Senior Associate Vice President for Business and Finance for System Offices units)
    • Have other University funds available to cover the deficit or a June 30 deficit is inherent in their business cycle
  2. University storeroom and certain departmental activity funds approved by the campus chief business officer (the Senior Associate Vice President for Business and Finance for System Offices units), where all the following apply:
    • The inventory of goods available for sale is equal to or greater than the amount of the cash deficit.
    • The inventory is not more than 10% of the annual revenue or an amount determined to be appropriate by the campus chief business officer (the Senior Associate Vice President for Business and Finance for System Offices units).
    • The University funds have a positive fund balance.
    • The cash deficit for the fiscal year is approved in advance in writing by the campus chief business officer (the Senior Associate Vice President for Business and Finance for System Offices units).

    The campus chief business officer (the Senior Associate Vice President for Business and Finance for System Offices units) may grant a renewal of the approval of the cash deficit under the same terms and conditions, provided the cash deficit meets the goals mutually agreed upon in the business plan.

  3. University clearing funds with a deficit where all the following apply:
    • The nature and the fund is to periodically have a deficit.
    • The deficit has the prior written approval of the campus chief business officer (the Senior Associate Vice President for Business and Finance for System Offices units).
    • The fund is functioning as intended and being reconciled as a clearing mechanism.
  4. Sponsored project deficit balances are excluded. Contact your campus Grants and Contracts office for information about overdrafts on sponsored projects.
  5. The measure for state deficits is at the unit level. Unit state deficits at the end of a fiscal year are carried forward as F & A or state deficits in the next fiscal year.

Additional Resources

 

 

 

 

 

Last Updated: January 24, 2017 | Approved: Senior Associate Vice President for Business and Finance | Effective: July 5, 2016

1.1.2 How the Unit Financial Report Calculates Unit Flexible and Inflexible Fund Cash

Each unit is expected to have sufficient and appropriate cash to pay salaries and operating expenses. The Unit Annual Financial Report prepared for each unit measures solvency utilizing the "net flexible cash" amount at the end of the fiscal year. A net flexible cash balance indicates the unit is solvent. A net flexible cash deficit indicates the unit is insolvent.

Flexible Funds - Cash in flexible fund sources is available to pay unit program costs.

Inflexible Funds - Cash in inflexible fund sources is available to pay specific project or program costs.

Net Flexible Funds - Positive cash balances in the unit's flexible fund sources, less cash deficits in the unit's flexible fund sources, less cash deficits in the unit's inflexible fund sources.

The following table lists inflexible funds, the method for calculating the amount of cash, and restrictions on the use of these funds:

Flexible Funds Source Method for Calculating the Amount of Cash
State Funds Budget less Expenses Less Obligations

Institutional Funds:

  • Facilities and Administrative (F&A, also known as ICR - indirect costs recovered)
  • Administrative and Educational Allowances
  • Patent, Copyright, and Royalty
Budget less Expenses
Unrestricted Gift and Endowment Funds General Ledger Cash Balance

Service Plan Funds:

  • Medical Service Plan (MSP)
  • Nursing Service Plan (NSP)
  • Dental Service Plan (DSP)
  • Occupational Health Service Plan (OHSP)
General Ledger Cash Balance
Storeroom, Service, Auxiliary Enterprise, and Departmental Activity Funds, which are part of a single purpose unit (Student Auxiliary Operations, Athletics, and University Hospital) General Ledger Cash Balance

The following table lists inflexible funds, the method for calculating the amount of cash, and restrictions on the use of these funds:

Source of Inflexible Funds Method for Calculating the Amount of Cash Restrictions on the Use of Funds
Restricted Gift and Endowment Funds General Ledger Cash Balance As specified by the donor
Other Storeroom, Service, Auxiliary Enterprise, and Departmental Activity Funds General Ledger Cash Balance The State Finance Act restricts the use of these funds to the support, maintenance, and development of the activity generating the revenue
Plant Funds General Ledger Cash Balance Based upon the source of funding and intended purpose

Last Updated: July 5, 2016 | Approved: Senior Associate Vice President for Business and Finance | Effective: July 5, 2016

1.1.3 How the University Compiles its Annual Financial Report

The University is subject to and complies with the reporting requirements mandated by the  State Comptroller Act (15 ILCS 405/19.5). This requires that financial reports are prepared using accounting principles generally accepted in the United States, as prescribed by the Governmental Accounting Standards Board (GASB), which establishes standards for external financial reporting for public colleges and universities. The reports must be published so the public and members of groups responsible for the University's support have necessary information about its financial affairs. The University’s Annual Financial Report also provides information helpful in evaluating how resources are managed to attain the University's goals.

The Annual Financial Report presents the University's financial activities for the fiscal year which ends on June 30. The report covers the annual operating activity for the entire fiscal year and the financial position at the end of the fiscal year. It also includes information from the prior year for comparison.

The report contains basic financial statements, supplementary schedules, and the independent auditor's opinion of these statements issued by the Special Assistant Auditors for the State Auditor General. It also contains an aggregate financial statement that presents University-related organizations (UROs) as defined in the Legislative Audit Commission Guidelines, in a separate column as components of the University of Illinois.

The Annual Financial Report is compiled from University accounting records, which are maintained using fund accounting principles. The University's financial statements consolidate all campus and administrative activities to present the University's financial position as a whole.

Components of the University Annual Financial Report

Basic Financial Statements

Statement of Net Position - Reports the financial position of the University at the end of the fiscal year, which includes all its assets and liabilities using the accrual basis of accounting.

Statement of Revenues, Expenses, and Changes in Net Position - Reports the University's revenues, expenses, and resulting change in net position for the fiscal year.

Statement of Cash Flows - Reports the major sources and uses of cash during the fiscal year.

Supplementary Materials
Schedules, notes, and materials that provide details in support of the basic financial statements.

Independent Auditor’s Report A statement by the external auditors that they have reviewed the basic financial statements and determined that they are fairly presented in accordance with Generally Accepted Accounting Principles (GAAP).

Other separate institutional reports, as required by law or bond indentures, are also published and distributed.

Additional Resources


University Accounting Fund Types
University of Illinois Annual Financial Reports
Legislative Audit Commission Guidelines

Last Updated: July 5, 2016 | Approved: Senior Associate Vice President for Business and Finance | Effective: July 5, 2016

1.1.4 How the University Reports Tuition and Fee Waivers

The Illinois Board of Higher Education's policy on undergraduate tuition and fee waivers limits the amount of undergraduate tuition waivers to 3 percent of the total available undergraduate tuition revenue. Each year the University must report regarding tuition and fee waivers granted in the previous fiscal year to the Board of Higher Education by September 15 (Public Act 92-0051).

Information on waivers, including selection criteria, application forms, critical deadline and award dates and administrative responsibilities, is available:

University-wide

Tuition

Urbana-Champaign

Article 3 – Academic Policies and Regulations, Part 5
Division of Management Information Policies and Procedures for Granting Tuition Waivers
Graduate College Tuition Waiver Policy

Chicago

Office of Budget and Program Analysis - Policy on Tuition and Fee Waivers
Graduate College Tuition and Fees Waivers

Springfield

Graduate Assistantships
Tuition Waivers and Reimbursements

Tax implications

Tuition and Fees: Waivers, Departmental Payments, and Reimbursements

Last Updated: July 5, 2016 | Approved: Senior Associate Vice President for Business and Finance | Effective: July 5, 2016

1.1.5 How Accounting is Conducted at the University of Illinois

The Banner General Ledger and Operating Ledger systems constitute the official financial record of the University and permit comparison to formal spending authority (budgets, appropriations, etc.) for fiscal control purposes. These centralized accounting systems also generate reports that help to safeguard the University’s assets.

The Banner General Ledger system consists of several types of accounts:

  • Balance sheet
  • Revenue
  • Expense
  • Transfers

The Banner Operating Ledger records budgets and contains detailed transactions for actual revenue, expense, and transfer activity that is summarized in the General Ledger.

Centralized accounting processes maintain the University’s chart of accounts and other methods for classifying financial data. These processes also ensure the integrity of the data recorded in the financial record.

Basis of Accounting

The University reports financial activity using the accrual accounting method. In accrual accounting, revenues are reported when earned, not necessarily when money is received. Expenses are reported when materials or services are received, not necessarily when money is paid out. Although some revenue and expense transactions are recorded throughout the year, at year-end all must be recorded for inclusion in annual reports. Recording revenue and expenses on the accrual basis requires that:

  • Revenue earned at a reporting date, but not yet received, is added and recorded as a receivable.
  • Revenue received, but applicable to future periods, is subtracted and recorded as deferred revenue.
  • Expenses incurred at a reporting date, but not yet paid, are added and a payable is recorded.
  • Expenses paid, but applicable to future periods, are subtracted and recorded as a prepaid expense.

Accruals and Deferrals

Financial activity may occur before the related transactions have formally processed through the appropriate Banner financial system. In other cases, financial activity that covers more than one financial accounting period may be recorded in Banner. When these situations occur, temporary entries that adjust for the timing of these transactions may be recorded at the end of a financial period. This provides more accurate financial reporting as of the end of that period.

Entries that add unrecorded financial activity are referred to as accruals. Entries that adjust for activity that belongs to a future period are referred to as deferrals. When accruals and deferrals are recorded at the end of a particular accounting period, they must be reversed at the beginning of the next accounting period so the transactions will not be duplicated or misstated in future accounting periods. Units may initiate accrual and deferral entries only for these fund types:

  • Self-Supporting
  • Services plans
  • Plant
Your unit may—or in some cases must—process accrual and deferral entries at the end of an accounting period.

Regulations and Standards

Unless otherwise stated in the OBFS Policies and Procedures Manual, all business and accounting of the University of Illinois must conform to Generally Accepted Accounting Principles (GAAP) and practices for educational institutions established, in order of precedence, by:

  • Statewide Accounting Management System (SAMS), Illinois State Comptroller
  • Government Accounting Standards Board (GASB)
  • Audits of Colleges and Universities, American Institute of Certified Public Accountants, New York
  • Hospital Audit Guide, American Institute of Certified Public Accountants, New York
  • College and University Business Administration, National Association of College and University Business Officers, Washington, DC

Additional Resources

Fund Types
University of Illinois Annual Financial Reports

Last Updated: November 30, 2017 | Approved: Senior Associate Vice President for Business and Finance | Effective: July 5, 2016

1.1.6 How the President Certifies Fiscal Compliance

The University is subject to and complies with State statutes and Board of Trustees (BOT) policies requiring compliance with specific fiscal and administrative control standards that measure the financial health of the University as a whole. The President certifies University compliance with fiscal and administrative control standards, to the Auditor General of the State of Illinois, as required under the Fiscal Control and Internal Auditing Act (FCIAA).

OBFS uses the electronic FCIAA questionnaire from each college or administrative unit to support the President’s certification.

Each unit completes a FCIAA questionnaire, which forms the basis for the annual certification. The certification provides reasonable assurance of:

  • The efficient and effective utilization of resources in compliance with applicable law
  • The obligation and expenditure of funds in compliance with applicable law
  • The safeguarding of funds, property, other assets and resources against waste, loss, unauthorized use, and misappropriation
  • The proper recording, accounting, and reporting of revenues, expenditures, and transfers of assets, resources, or funds, to maintain accountability of the State's resources
  • The management and use of funds held outside the State Treasury in accordance with the terms of their enabling authorities, and that no unauthorized funds exist

 

Related policies and Procedures

9.2 Submit the FCIAA Questionnaire
How Internal Controls Protect You and Your Unit

Additional Resources

Fiscal Control and Internal Auditing Act (FCIAA)

Last Updated: July 5, 2016 | Approved: Senior Associate Vice President for Business and Finance | Effective: July 5, 2016

1.2.1 Business and Financial Responsibilities

The Senior Associate Vice President for Business and Finance (SAVP) has been delegated the responsibility for business and financial functions and services by the Vice President/Chief Financial Officer and Comptroller. The SAVP delegates authority to direct and/or facilitate the procedures used in all campus business and financial matters to members of the Senior Associate Vice President for Business and Finance Advisory Council (SAVPAC).

Some members of SAVPAC have the additional responsibility to act as chief business officer for the campuses:

  • Chicago – Assistant Vice President for Business and Finance
  • Springfield – Director of Business Services
  • Urbana – Assistant Vice President for Business and Finance

The chief business officers:

  • Provide assistance, consultation, and decision support regarding business and financial issues to campus administration officers, campus business managers and campus fiscal officers.
  • Help ensure compliance with University policies and other regulatory requirements.
  • Partner with campus leadership in meeting strategic objectives in cost effective, compliant manner.

University units have been delegated the responsibility for their financial information which is critical to the integrity of the University's financial statements. Therefore, personnel responsible for the business and financial activity of their unit must carefully review all policies and procedures to ensure that their financial information is properly recorded in the University's financial system.

Units are responsible for ensuring the most effective use of University resources through such measures as:

  • Maintaining accounts and preparing reports which show the financial impact of University activities and programs
  • Supporting the mission of the University through the best use of financial resources
  • Establishing internal controls to ensure stewardship of public funds

All employees are responsible for exercising reasonable care of University and State resources.

Last Updated: July 5, 2016 | Approved: Senior Associate Vice President for Business and Finance | Effective: July 5, 2016

1.2.2 Introduction to Unit Head Financial Responsibilities

All administrators at all levels have a fiduciary responsibility for ensuring the wise and most effective use of University resources. Unit heads are responsible for the financial health of their units to ensure University financial resources are managed properly.

In addition to the background information provided in this Section 1 of the OBFS Policies and Procedures Manual, unit heads may refer to the following areas in the (redesigned) sections of the OBFS Manual, to find information related to specific responsibilities:

Specific Responsibilities

Comply with Unit Head Property Custodial Responsibilities
Comply with Unit Head Cash Handling Responsibilities
19.1.3 Comply with Unit Head Responsibilities for Data Control
9.1 Comply with Unit Head Responsibilities for Internal Control

Additional Resources

Fiscal Control and Internal Auditing Act (FCIAA)
Orientation for New Business and Finance Employees

Last Updated: July 5, 2016 | Approved: Senior Associate Vice President for Business and Finance | Effective: July 5, 2016

1.3.1 Approval of Financial Documents

The University Vice President/Chief Financial Officer and Comptroller (Comptroller) is the general fiscal (financial) officer of the Board of Trustees and has authority to approve for the Board all expenditures the Board makes for a general or specific appropriation. The Comptroller also has general authority to execute contracts for the Board. These authorizations are subject to certain conditions and requirements outlined in The General Rules Concerning University Organization and Procedure (General Rules).

The General Rules also provides for the delegation of these authorities. To provide for the orderly transaction of University business, the following is used in the approval of financial documents for all state and non-state funds.

For ALL capital related items, see "Capital Projects/Construction" below.

Purchases

Professional Services

Purchases less than $1,000,000 - The approval authority for purchases less than $1,000,000 is delegated to the Assistant Vice President for Procurement Services who may further delegate authority and issue pertinent guidelines.

Purchases of $1,000,000 or more - The Assistant Vice President for Procurement Services refers all transactions of $1,000,000 or more for professional services to the Comptroller, by way of the Senior Associate Vice President for Business and Finance, as a recommendation to the Board of Trustees for approval.

Commodities, Equipment, and Services other than Professional Services

Purchases of less than $1,000,000 - The approval authority for purchases of less than $1,000,000 is delegated to the Assistant Vice President for Procurement Services who may further delegate authority and issue pertinent guidelines.

Purchases of $1,000,000 or more - The Assistant Vice President for Procurement Services refers all purchases of $1,000,000 or more to the Comptroller, by way of the Senior Associate Vice President for Business and Finance, as a recommendation to the Board of Trustees for approval.

Purchase Orders and Change Orders

Purchase orders - The University Comptroller or delegates signs all purchase orders. The Purchasing offices issue all purchase orders upon proper approval of the purchase, except where limited purchasing authorization has been assigned to a particular unit (see 7.2 Purchase of Goods and Services).

Change orders - Change orders related to medical center operations that exceed 25 percent of the original Board approved contract or purchase agreement, and change orders that are not related to the medical center operations that exceed 25 percent of the original Board approved contract for construction or professional services or original Board approved purchase agreements for supplies or equipment, will be reported to the Board at its next scheduled meeting but will not require prior authorization of the Board.

Emergency Board Approval Purchases

Presidential approval of emergency transactions - The president, after consulting with each member of the executive committee of the Board who can reasonably be contacted, may approve emergency transactions in excess of the Board limit on behalf of the Board of Trustees and report the same promptly to the Board. If the amount of the emergency transaction exceeds such dollar amounts as the Board of Trustees may specify from time to time the president must consult with all Board members who can reasonably be contacted before approving the emergency action.

Approval of Exempt Purchases

The Director of Purchasing considers a buyer's recommendation before approving the purchase of items exempted from the bidding procedure by the Board of Trustees. In unusual cases, the approval of the Assistant Vice President for Procurement Services is obtained and, if necessary, the approval of the Comptroller by way of the Senior Associate Vice President for Business and Finance.

Loan, Lease, and Lease-Purchase of Equipment

Agreements covering loan or leasing of equipment to University departments are signed by the Comptroller, or authorized signature delegate. The agreement should follow the approval requirements outlined in this section.

Power of Attorney (Freight Forwarder)

All individual transactions relating to the Power of Attorney are signed in the Comptroller's name by the Assistant Vice President for Procurement Services or delegate.

Capital Projects/Construction

A capital project is an undertaking that results in a creation, an alteration or a connection to real property. Capital projects include the development of project scopes, budgets, schedules and procurement of all construction related services for new buildings, additions/modifications to existing buildings, and associated backbone infrastructure. Professional consultant services related to capital projects such as programming, conceptualization/feasibility studies, construction documentation, bidding, construction observation and warranty services are included in the definition of a capital project.

Approval of the Board of Trustees is required for the following:

  • Budgets for individual capital projects of $5,000,000 or more
  • Professional service contracts related to capital projects of $1,000,000 or more
  • Construction contracts of $2,500,000 or more

Contact the University Office for Capital Programs and Real Estate Services for delegated authority for those levels below the Board of Trustees' authority level.

For all capital related policies and guidelines, see the University Office for Capital Programs and Real Estate Services' website.

Job Order Contracting (JOC) - The Director of the Physical Plant (UIC), the Director of Physical Planning and Operations (UIS), or the Director of Facilities and Services (UIUC) may approve any single JOC project up to $250,000. All projects using JOC forces must be reported to the University Office of Capital Programs and Real Estate Services on a quarterly basis.

Use of University forces - University forces may be used for minor alterations, repairs, and construction work (other than painting and regular ongoing maintenance).

For all projects costing less than $250,000 - The Director of the Physical Plant (UIC), the Director of Physical Planning and Operations (UIS), or the Director of Facilities and Services (UIUC) determine whether the work is done by University forces, Job Order Contracting, or competitive bidding. For projects under the bid limit, the Directors may request the Purchasing Division to issue purchase orders if outside contractors are used.

For projects costing $250,000 or more but less than $500,000 - The work is normally done by outside contractors on specific competitive bids. However, if exceptional circumstances are present that justify using University forces, and it is considered in the best interest of the University, the Director of the Physical Plant (UIC), the Director of Physical Planning and Operations (UIS), or the Director of Facilities and Services (UIUC) may approve any single project up to $500,000.

Outside Sponsored Programs (Including Research Contracts)

Proposals - Proposals are transmitted to the campus pre-award office. Per the General Rules (Art. 2 sec 6(d)), final approval of all proposals are the responsibility of the vice chancellor for research (VCR), or the chancellor where there is no campus VCR, or his/her delegates

Contracts - Contracts, including grant and cooperative agreements, are executed in the name of the Comptroller by the person authorized to sign (see "Delegation of Signatures" in this section).

Establishment of any new unit of instruction, research or public service (e.g. colleges, schools, departments, institutes, and centers), under a sponsored project or otherwise, must comply with the approval process set forth in Article VIII of the University Statutes and must receive final approval by both the Board of Trustees and the Illinois Board of Higher Education.

Acceptances of grants and other documents relating to contracts and grants may be signed by authorized employees in the name of the Comptroller (see "Delegation of Signatures" in this section).

Leases or Contracts for Student or Employee Housing

Leases or contracts for student or employee housing are signed by the Director of Campus Services (UIC), Director of Housing and Residential Life (UIS), and the Director of Housing (UIUC). Copies are retained by the originating office on behalf of the Board of Trustees.

Land Acquisition, Land Disposal, and Easements

Prior Board authorization is required for the following:

  • Acquisition of property located outside approved campus Master Plan boundaries at the Chicago and Urbana-Champaign campuses
  • Condemnation of property
  • Sale or exchange of property (except gift properties, where authorization is delegated to the Comptroller)

The Comptroller is delegated authority for the following:

  • Acquisition of property within approved campus Master Plan boundaries, consistent with practices and law
  • Sale of gift properties and any personal property acquired
  • Reasonable relocation assistance costs to an owner occupant
  • Granting of all easements
  • Other leases

Lease of real estate and office space - Prior Board authorization is required for leases where the annual rental costs, exclusive of operating costs, are $100,000 or more. The Vice President for Finance/CFO and Comptroller has full authority for lease amendments and renewal increases. The dollar limitation applies to the annual rental of the lease extended beyond one year.

Delegation of Signatures

Authorization to sign Comptroller's name - All contracts prepared for the Comptroller's signature are signed in the Comptroller's name by employees authorized in writing by the Comptroller. A list of employees authorized to sign the Comptroller's name and what documents they are authorized to sign is available from the Office of the Senior Associate Vice President for Business and Finance.

Unit Approval for Expenditures

Authority

The Comptroller authorizes all expenditures and executes all contracts for the Board.

A variety of business documents, initiated by the heads of budgetary units, are for the expenditure of funds. The signature or approval of these business documents by unit personnel certifies that, to the best of their knowledge, the transaction is a proper one and that in signing they are accepting responsibility for it. (A proper transaction is one that complies with published rules and guidelines, as outlined in Section 7, Purchasing, Section 8, Payments and Reimbursements, and Section 15, Travel, and is based on common business practice.) Based on this certification the Office of Business and Financial Services, on behalf of the Comptroller, enters into agreements, and authorizes expenditures or transfer of funds.

Normally, the signature or approval of the head of the budgetary unit is necessary on business documents. This signature authority may be delegated to others. Additional signatures or approvals are often necessary as indicated in this and other guidelines.

Conflict of Interest

The University complies with State of Illinois requirements regarding potential procurement conflicts of interest. Please contact your campus Purchasing Office for information regarding current requirements.

Travel

Traveler certification - The travel certification on all travel expense requests must be validated by the traveler (payee) via the Travel Expense Management (TEM) system.

Approval of vouchers - Employees may not approve their own travel expense requests. Travel expense requests for the head of a unit, as a rule, are approved by the head of the next supervisory administrative unit or delegate.

Travel Card - The Office of Business and Financial Services, Office of Procurement Services authorizes units to use the Travel Card (T-Card), a MasterCard from Bank of America, to purchase qualified travel expenses, business meals and/or refreshments for specific events to relieve the employee from significant out of pocket expenses based on the cardholder's approval and use criteria as established by the cardholder's unit. Cardholders are responsible for proper use of the card, obtaining receipts for purchases, and for logging expenses in the Travel Expense Management System (TEM). A department card manager (DCM), designated by the department, is responsible for managing the cardholder application process in his/her department, the approval limits and ensuring that T-Card holders have received appropriate training for use and security of the T-Card. See Section 15, Travel, for additional information on the T-Card program

Approval for the President, Members of the Board of Trustees, and the Chancellors - The Comptroller or delegates and the Senior Associate Vice President for Business and Finance (SAVP) approve travel reimbursement requests on behalf of, and for, the President of the University and members of the Board of Trustees. The Comptroller delegates approval of travel reimbursement requests for the Chancellors to the chief business officers (CBOs). If a CBO is not available to review a travel reimbursement request for a Chancellor, his/her proxy, the Comptroller or SAVP may review and approve the request.

Approval Delegation for the Chancellors - Chancellors may delegate their approval authority for travel reimbursement requests.

Personal Services

Employees may not approve their own payroll documents. Payroll documents for the head of a unit, as a rule, are approved by the head of the next higher administrative unit or delegate.

Goods, Contractual Services and other Expenditures

Procurement Card - The Office of Business and Financial Services, Office of Procurement Services authorizes units to use the Procurement Card (P-Card), a MasterCard from Bank of America, to purchase supplies and equipment based on the cardholder's approval and use criteria as established by the cardholder's unit. Cardholders are responsible for proper use of the card, obtaining receipts for purchases, and for logging orders in the P-card system. A department card manager (DCM), designated by the department, is responsible for managing the cardholder application process in his/her department, the approval limits and ensuring that P-Card holders have received appropriate training for use and security of the P-Card. See 7.6 P-Card for additional information on the P-Card program.

Requisitions - The Office of Business and Financial Services enters into a purchasing agreement with a vendor based on a properly approved purchase requisition (or, when authorized, a properly approved unit direct purchase). The Office of Business and Financial Services also authorizes payments to vendors for goods and services received and charges the funds indicated without additional approvals.

Incidental charges in connection with a purchase (for example, freight, toll charges, interest penalties, etc.) may be paid and charged to unit funds without additional approvals. Specific approval requirements are outlined in Section 7, Purchasing.

Miscellaneous payments - The Office of Business and Financial Services authorizes payments based on properly approved vouchers. These vouchers may be for the purchase of goods or services, travel, or any other purpose for which an appropriation has been made. In signing these vouchers unit heads are certifying that the goods or services have been received and that, to the best of their knowledge, the charge is a proper one to the funds indicated. Employees may not approve their own reimbursement.

Stores and service transfers - Stores and service transactions are between a unit and the stores or service unit. Stores and service units have several ways of obtaining department approval to provide goods or services and to charge unit funds. The Office of Business and Financial Services authorizes the transfer of funds (expenditures) based on appropriately certified transfer vouchers submitted by stores or service units. In submitting transfer vouchers, heads of stores or service units are certifying that:

  • They have delivered the goods or services according to University policies.
  • They have approval from the unit to charge the funds indicated.
  • The funds are proper for disbursements for the goods/services provided.

Journal entry transfers - Occasionally the Office of Business and Financial Services may authorize the transfer of funds (expenditures) based on the terms of a grant contract agreement (such as, indirect cost recovery) or another University policy (for example, administrative charges).

Sponsored Projects and Federal Appropriated Funds

Sponsored projects and federal appropriated funds often require additional approvals to charge funds. Requisitions, vouchers, and other business documents are to have these additional approvals before submission to the stores or service unit or the Office of Business and Financial Services for processing and payment.

Signatures On Vouchers and Checks

Vouchers to the State Comptroller

Board officer's approval - All vouchers submitted to the State Comptroller must be certified by the President of the University of Illinois, or delegates, pursuant to 30 ILCS 105/10.

Signature cards - A state signature card must be on file in the State Comptroller's Office that provides specimen signatures to the State Comptroller for the persons authorized to sign in the name of the President for this purpose.

Handwritten signatures - Employees authorized to sign the President's name to vouchers must also sign their own names to the vouchers.

Checks on University Funds

Board officer's approval - All checks presented for payment from University funds must carry the signatures of the Chair and Secretary of the Board of Trustees, unless otherwise authorized.

Campus Funds Checks

Campus Bursar Fund (UIC) - The signature (or machine facsimile signature) of the Comptroller, or delegates, is required.

Campus Imprest Fund (UIUC) - The signature (or machine facsimile signature) of the Comptroller, or delegates, is required.

Signatures on Letters Of Credit

Signatures on letters of credit are as authorized by the Comptroller by way of the Senior Associate Vice President for Business and Finance or delegate.

University Investments

Authorizations By Audit, Budget, Finance and Facilities Committee

Authority - The Comptroller is authorized to manage University investments at his/her discretion consistent with the Board's approved Investment policy. The Comptroller has delegated authority to i) approve investment manager hiring and termination, ii) buy or sell securities to manage investments within the University's target asset allocation, and iii) buy or sell endowment real estate including farmland. Treasury Operations investment staff have authority to manage day-to-day transactions and external investment manager relationships for the university's investment assets under direction of the Comptroller.

Tax Returns

University-Wide

When the University Comptroller's signature is required on tax documents, the University Comptroller or delegate may sign. These documents include but are not limited to:

  • Monthly, quarterly, and annual tax returns.
  • Reports to governmental authorities for withholding or excise taxes.
  • Applications for business registration and other documentation for reporting and withholding, unemployment, and workers' compensation obligations.

Campus

All other tax returns and declarations prepared for a single campus are submitted by the Controller and Senior Assistant Vice-President for Business and Finance, or delegates.

Insurance

Proof of loss form - Proof of loss forms, where the University agrees to release an indemnifying company for a settlement of the University's claim, may be signed by the Comptroller or delegate.

Insurance contracts - Insurance policies, endorsements, and riders that require the signature of the University Comptroller are signed by the Comptroller or delegate.

Last Updated: July 5, 2016 | Approved: Senior Associate Vice President for Business and Finance | Effective: July 5, 2016

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 University of Illinois System 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: September 22, 2017 | Approved: Senior Associate Vice President for Business and Finance and University Counsel | Effective: August 5, 2013

1.3.3 What Approving or Signing a Document Means

No employee has the authority to sign any document that binds or financially obligates the University unless such signature authority has been specifically delegated. That includes contracts and other agreements such as a Letter of Agreement (LOA), Memorandum of Understanding (MOU), and Memorandum of Agreement (MOA).

Who can sign or approve business and financial documents is determined by the General Rules Concerning University Organization and Procedure (General Rules).

Sponsored projects and federal appropriated funds often require additional approvals to charge these types of funds. Requisitions, vouchers, and other business documents must have these additional approvals before submitting them for processing and payment.

When you sign or approve a paper or electronic document, in addition to the stated provisions (explicit representations), you are attesting to certain unstated provisions (implicit representations):

  • Although your unit head is ultimately responsible for the unit budget, you are responsible for ensuring that funds are available for the transaction.
  • The transaction is within the scope and limit of your signature authority as delegated by your unit head.
  • The transaction is for official University business, is reasonable and necessary, and complies with University, state, or federal regulations or agreements.
  • The amount of the transaction is, to the best of your knowledge, correct and complies with all University, state, or federal regulations.
  • You are not signing for your own payroll/benefits, travel, reimbursement, or other payment.
  • For payroll transactions:
    • You have first-hand knowledge or other documentation (for example, daily time reports approved by the supervisor) of the hours worked/benefits used.
    • The benefits used do not exceed the benefits to which the employee is entitled.

Signing for the receipt of a cash advance implies that the amount of the advance is reasonable and necessary for the conduct of University business and within the requirements for obtaining such advances, and that the advance will be cleared within 60 days of completion of the travel or event.

Last Updated: September 1, 2015 | Approved: Senior Associate Vice President for Business and Finance | Effective: September 1, 2015

1.3.4 Funding Language for Board of Trustees Roll Call Items and Contracts

Roll Call Items

Roll call items seeking Board of Trustees approval of capital project budgets, purchases, contracts, change orders, or leases must contain the appropriate funding language both in the heading of the roll call item labeled “Funding:” and in the body of the roll call item demonstrating compliance with the General Rules and Illinois State Statutes. The following identifies the appropriate funding language to ensure such compliance. The chief business officers at the campuses are available to assist with identifying the appropriate funding language for Board Items.

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State Funds Operating Appropriation

State Funds Operating Appropriation – the appropriate funding language for the heading of the roll call item is “ State Appropriated Funds”. The following identifies the appropriate funding language for the body of the roll call item:

  1. For Board of Trustees approval of capital project budgets, the following funding language is appropriate:

    Funds for the project are available from the Fiscal Year nnnn State appropriated operating budget.
  2. For Board of Trustees approval of a purchase, contract, change order, or lease when the payment will be from state funds appropriated by the General Assembly, and the appropriation bill has been signed by the Governor, and the budget has been approved by the Board of Trustees, the following funding language is appropriate:

    Funds are available from the Fiscal Year nnnn State appropriated funds operating budget of the [unit name].
  3. For Board of Trustees approval of a purchase, contract, change order, or lease when the payment will be from state funds not appropriated by the General Assembly, the appropriation bill has not been signed by the Governor, and the budget has not been approved by the Board of Trustees, the following funding language and contract terms are appropriate:

    Funds are included in the appropriation bill of the General Assembly to meet the ordinary and contingent expenses of the University for Fiscal Year nnnn and will be included in the [unit name] operating budget authorization request for Fiscal Year nnnn to be submitted to the Board of Trustees. The contract is subject to the appropriation of these funds and Board of Trustees approval of the operating budget.
  4. For Board of Trustees approval of a purchase, contract, change order, or lease when the payment will partially be from state funds appropriated by the General Assembly, the appropriation bill has been signed by the Governor, and the budget has been approved by the Board of Trustees and partially from state funds not appropriated by the General Assembly, the appropriation bill has not been signed by the Governor, and the budget has not been approved by the Board of Trustees, the following funding language and contract terms are appropriate:

    Funds for the current fiscal year are available from the State appropriated funds operating budget of the [unit name]. Funds for the next fiscal year are included in the appropriation bill of the General Assembly to meet the ordinary and contingent expenses of the University for Fiscal Year nnnn and will be included in the [unit name] operating budget authorization request for Fiscal Year nnnn to be submitted to the Board of Trustees. The extended contract is subject to the appropriation of these funds and Board of Trustees approval of the operating budget.

Institutional Funds

Institutional Funds (i.e., Facilities and Administration (F&A), formerly Indirect Cost Recovery (ICR), Administrative Allowance, and Patent, Royalty, and Copyright Income) - the appropriate funding language for the heading of the roll call item is "Institutional Funds Operating Budget". The following identifies the appropriate funding language for the body of the roll call item:

  1. For Board of Trustees approval of capital project budgets, the following funding language is appropriate:

    Funds for the project are available from the Fiscal Year nnnn institutional funds operating budget.
  2. For Board of Trustees approval of a purchase, contract, change order, or lease when the payment will be from an institutional funds operating budget approved by the Board of Trustees, the following funding language is appropriate:

    Funds are available from the Fiscal Year nnnn institutional funds operating budget of the [unit name].
  3. For Board of Trustees approval of a purchase, contract, change order, or lease when the payment will be from an institutional funds operating budget not approved by the Board of Trustees, the following funding language and contract terms are appropriate:

    Funds for the contract will be included in the [unit name] institutional funds operating budget authorization request to be submitted to the Board of Trustees for Fiscal Year nnnn. The contract is subject to the Board of Trustees approval of the operating budget.
  4. For Board of Trustees approval of a purchase, contract, change order, or lease when the payment will partially be from an institutional funds operating budget approved by the Board of Trustees and partially from an institutional funds operating budget not approved by the Board of Trustees, the following funding language and contract terms are appropriate:

    Funds for the current fiscal year are available from the institutional funds operating budget of the [unit name]. Funds for the next fiscal year will be included in the [unit name] Fiscal Year nnnn institutional funds operating budget authorization request to be submitted to the Board of Trustees. The contract is subject to the Board of Trustees approval of the budget.

Federal, State, or City Grant or Contract Funds

Federal, State, or City Grant or Contract Funds - the appropriate funding language for the heading of the roll call item is "name of the grant or contract award and name of the grantor or contractor". The following identifies the appropriate funding language for the body of the roll call item:

  1. For Board of Trustees approval of capital project budgets, the following funding language is appropriate:

    Funds for the project are available from [name of sponsor] grant for [purpose or name of grant].
  2. For Board of Trustees approval of a purchase, contract, change order, or lease when the payment will be from a federal grant or contract awarded to the University and is included in an operating budget approved by the Board of Trustees, the following funding language is appropriate:

    Funds are available from [name of sponsor] grant for [purpose or name of grant].
  3. For Board of Trustees approval of a purchase, contract, change order, or lease when the payment will be from a federal grant or contract awarded to the University and is included in an operating budget not yet approved by the Board of Trustees, the following funding language and contract terms are appropriate:

    Funds for the contract will be included in the [unit name] restricted funds operating budget authorization request to be submitted to the Board of Trustees for Fiscal Year nnnn. The contract is subject to the Board of Trustees approval of the operating budget.
  4. For Board of Trustees approval of a purchase, contract, change order, or lease when the payment will partially be from a federal grant or contract awarded to the University and is included in an operating budget approved by the Board of Trustees and partially from a federal grant or contract awarded to the University and is included in an operating budget not yet approved by the Board of Trustees:

    Funds for the current fiscal year are available from the restricted funds operating budget of the [unit name]. Funds for the next fiscal year will be included in the [unit name] Fiscal Year nnnn restricted funds operating budget authorization request to be submitted to the Board of Trustees. The contract is subject to the Board of Trustees approval of the budget.

Revenue Bonds Funds

Revenue Bonds Funds - the appropriate funding language for the heading of the roll call item is "name of the revenue bond fund". The following identifies the appropriate funding language for the body of the roll call item:

  1. For Board of Trustees approval of capital project budgets, the following funding language is appropriate:

    Funds for the project are available from [name of the revenue bond fund].
  2. For Board of Trustees approval of a purchase, contract, change order, or lease when the payment will be from proceeds of revenue bonds approved by the Board of Trustees and sold, the following funding language is appropriate:

    Funds for the project will be made available from the proceeds of the [name of the revenue bond fund].
  3. For Board of Trustees approval of a purchase, contract, change order, or lease when the payment will be from proceeds of a future revenue bond's issue, the following funding language is appropriate: (Note: Projected expenditures incurred within one year preceding the issuance of revenue bonds are allowable against revenue bond funds.)

    Funds for this contract are available initially from [unit name] [source of funds] with anticipated reimbursement from the proceeds of a subsequent revenue bond sale.

Gift/Endowment Funds

Gift/Endowment Funds - the appropriate funding language for the heading of the roll call item is "gift funds". The following identifies the appropriate funding language for the body of the roll call item:

  1. For Board of Trustees approval of capital project budgets, the following funding language is appropriate:

    Funds for the project are available from gift funds.

    If the donor requests to be anonymous, the following funding language is appropriate:

    Funds for the project are available from the restricted funds operating budget of the [unit name].
  2. For Board of Trustees approval of a purchase, contract, change order, or lease when the payment will be from gift or endowment funds in the University Treasury, the following funding language is appropriate:

    Private gift funds are available from the Fiscal Year nnnn restricted funds operating budget of the [unit name].
  3. For Board of Trustees approval of a purchase, contract, change order, or lease when the payment will partially be from gift or endowment funds in the University Treasury and partially from gift or endowment funds not in the University Treasury, the following funding language and contract terms are appropriate:

    Funds for the contract will be included in the [unit name] restricted funds operating budget authorization request to be submitted to the Board of Trustees for Fiscal Year nnnn. The contract is subject to the Board of Trustees approval of the budget.

State Capital Development Board Funds

State Capital Development Board Funds - the appropriate funding language for the heading of the roll call item is " State Capital Appropriation". The following identifies the appropriate funding language for the body of the roll call item:

  1. Note: The University's authority to award purchases, contracts, change orders, or leases when the payment will be from a capital appropriation is limited to when the funds have been appropriated by the General Assembly, the appropriation bill has been signed by the Governor, and the Governor has released the capital appropriation funds.
  2. For Board of Trustees approval of capital project budgets, the following funding language is appropriate:

    Funds (for this project; for the employment of the professional firms) have been appropriated to the Capital Development Board for FYnnnn."
  3. For Board of Trustees approval of a purchase, contract, change order, or lease when the payment will be from a capital appropriation appropriated by the General Assembly, and the appropriation bill has been signed by the Governor, and the Governor has released the capital appropriation funds, and the project budget has been approved as required by the Board of Trustees, the following funding language is appropriate:

    Funds [for this project; for the employment of the professional firms] have been appropriated to the [Capital Development Board or University].
  4. For Board of Trustees approval of a purchase, contract, change order, or lease when the payment will partially be from an institutional funds operating budget approved by the Board of Trustees, and partially from a capital appropriation appropriated by the General Assembly, and the appropriation bill has been signed by the Governor, and the Governor has released the capital appropriation funds, and the project budget has been approved as required by the Board of Trustees, the following funding language is appropriate:

    A portion of the funding [for this project; for the employment of the professional firms] is available from the Fiscal Year nnnn institutional funds operating budget of the [unit name] and the remainder of the funding is available from funds appropriated to the Capital Development Board.

Auxiliary Facility System Repair and Replacement Reserve Funds

Auxiliary Facility System Repair and Replacement Reserve Funds - the appropriate funding language for the heading of the roll call item is "Auxiliary Facility System Repair and Replacement Reserve Budget". The following identifies the appropriate funding language for the body of the roll call item:

  1. For Board of Trustees approval of capital project budgets, the following funding language is appropriate:

    Funds for the project are available from the auxiliary facility system repair and replacement reserve budget.
  2. For Board of Trustees approval of a purchase, contract, change order, or lease when the payment will be from auxiliary facility system repair and replacement reserve funds and the project budget has been approved as required by the Board of Trustees, the following funding language is appropriate:

    Funds are available from the auxiliary facility system repair and replacement reserve budget for Fiscal Year nnnn.

Activity, Storeroom, and Service Funds

Activity, Storeroom, and Service Funds - the appropriate funding language for the heading of the roll call item is "Restricted Funds Operating Budget". The following identifies the appropriate funding language for the body of the roll call item:

  1. For Board of Trustees approval of capital project budgets, the following funding language is appropriate:

    Funds for the project are available from operating budget of the [name of fund and unit].
  2. For Board of Trustees approval of a purchase, contract, change order, or lease when the payment will be from an operating budget approved by the Board of Trustees, the following funding language is appropriate:

    Funds are available from the Fiscal Year nnnn operating budget of the [name of fund and unit].
  3. For Board of Trustees approval of a purchase, contract, change order, or lease when the payment will be from an operating budget not approved by the Board of Trustees, the following funding language and contract terms are appropriate:

    Funds for this contract will be included in the operating budget authorization request to be submitted to the Board of Trustees for Fiscal Year nnnn [name of fund and unit]. The contract is subject to the Board of Trustees approval of the budget.
  4. For Board of Trustees approval of a purchase, contract, change order, or lease when the payment will partially be from an operating budget approved by the Board of Trustees and partially from an operating budget not approved by the Board of Trustees, the following funding language and contract terms are appropriate:

    For the current fiscal year, funds are available from the Fiscal Year nnnn operating budget of the [name of fund and unit]. For the future fiscal year, funds will be included in the operating budget authorization request to be submitted to the Board of Trustees for Fiscal Year nnnn [name of fund and unit]. The contract is subject to the Board of Trustees approval of the budget.

Health Services Facilities System Fund

Health Services Facilities System Fund - the appropriate funding language for the heading of the roll call item is "Health Services Facilities System Operating Budget".The following identifies the appropriate funding language for the body of the roll call item:

  1. For Board of Trustees approval of capital project budgets, the following funding language is appropriate:

    Funds are available from the health services facilities system operating budget.
  2. For Board of Trustees approval of a purchase, contract, change order, or lease when the payment will be from a health services facilities system operating budget approved by the Board of Trustees, the following funding language is appropriate:

    Funds are available from the Fiscal Year nnnn health services facilities system operating budget.
  3. For Board of Trustees approval of a purchase, contract, change order, or lease when the payment will be from a health services facilities system operating budget not approved by the Board of Trustees, the following funding language and contract terms are appropriate:

    Funds for the contract will be included in the health services facilities system operating budget authorization request to be submitted to the Board of Trustees for Fiscal Year nnnn. The contract is subject to the Board of Trustees approval of the budget.
  4. For Board of Trustees approval of a purchase, contract, change order, or lease when the payment will partially be from a health services facilities system operating budget approved by the Board of Trustees and partially from a health services facilities system operating budget not approved by the Board of Trustees, the following funding language and contract terms are appropriate:

    For the current fiscal year, funds are available in the health services facilities system operating budget. For the future fiscal year, funds will be included in the health services facilities system operating budget authorization request to be submitted to the Board of Trustees. The contract is subject to the Board of Trustees approval of the budget.

Medical Service Plan Funds

Medical Service Plan Funds - the appropriate funding language for the heading of the roll call item is "Restricted Funds Operating Budget". The following identifies the appropriate funding language for the body of the roll call item:

  1. For Board of Trustees approval of capital project budgets, the following funding language is appropriate:

    Funds are available from the restricted funds operating budget of the College of Medicine at [give location].
  2. For Board of Trustees approval of a purchase, contract, change order, or lease when the payment will be from a medical service plan operating budget approved by the Board of Trustees, the following funding language is appropriate:

    Funds are available from the Fiscal Year nnnn restricted funds operating budget of the College of Medicine at [give location].
  3. For Board of Trustees approval of a purchase, contract, change order, or lease when the payment will be from a medical service plan operating budget not approved by the Board of Trustees, the following funding language and contract terms are appropriate:

    Funds for the contract will be included in the restricted funds operating budget of the College of Medicine at [give location] authorization request to be submitted to the Board of Trustees for Fiscal Year nnnn. The contract is subject to the Board of Trustees approval of the budget.
  4. For Board of Trustees approval of a purchase, contract, change order, or lease when the payment will be from a medical service plan operating budget approved by the Board of Trustees and partially from a medical service plan operating budget not approved by the Board of Trustees, the following funding language and contract terms are appropriate:

    For the current fiscal year, funds are available in the restricted funds operating budget of the College of Medicine at [give location]. For the future fiscal year, funds will be included in the restricted funds operating budget of the College of Medicine at [give location] budget authorization request to be submitted to the Board of Trustees. The contract is subject to the Board of Trustees approval of the budget.

Last Updated: March 17, 2008 | Approved: Senior Associate Vice President for Business and Finance | Effective: March 2004

1.4.1 University Business and Financial Records Management

The University is subject to and complies with the Illinois State Records Act. The Act requires the University to maintain an active and continuing program for the economical and efficient retention of University records. University records cannot be destroyed or otherwise disposed of without prior approval from University Archives. Contact the Records and Information Management (RIMS) team to receive proper authorization for disposal or transfer of records, in accordance with the State Records Act. The University of Illinois Archives is authorized by Article VI, Section 4 of the General Rules Concerning University Organization and Procedure to acquire official records, publications, and personal papers of the administrative and academic staff and records of faculty and student organizations.

Definitions

Records - Records are official and trustworthy documents used by the University for accountability and transparency. Requirements for retaining records are mandated by federal and state laws and regulations.

Working documents - Working documents are unofficial yet trustworthy documents used to support business activities. Examples include copies of official records retained for your convenience or preliminary planning documents.

Temporary documents - Temporary documents are transitory and not records or working documents. Examples include drafts, reference materials, and routine correspondence.

Record Keeping Requirements

Redesigned sections of the OBFS Business and Financial Policies and Procedures Manual contain a page of record keeping requirements for that section.
Keeping Budget Records
Keeping Payroll Records
Keeping Receivables Records
Keeping Insurance Records
Keeping Payables Records
Keeping Supporting Records
Keeping Cash Handling Records
Keeping Property Accounting Records
Keeping Accounting Records
Keeping Investment and Banking Records
Keeping Travel Records
Keeping Business Systems Access and Security Records
Keeping Identity Management Records
Keeping Merchant Card Records
Keeping Self-Supporting Activities Records

Additional Resources

Records and Information Management Services
Urbana - University Archives
Chicago - University Archives
Springfield - Archives/Special Collections

Last Updated: July 5, 2016 | Approved: Senior Associate Vice President for Business and Finance | Effective: July 5, 2016

1.5.1 How to Conduct Business Outside the State of Illinois

Policy Statement

Occasionally, it may be necessary to conduct University of Illinois System business outside the state of Illinois, including outside of the country. Conducting business outside the state of Illinois may include, but is not limited to, opening new System and university office locations, allowing employees to work remotely for extended periods, off-site teaching and research activities, and internet sales. The System must abide by the relevant laws, which are state and country specific.

Procedure

Before moving forward with any proposal to conduct business outside Illinois consult the System Offices units below to help ensure that the System complies with applicable laws.

  1. Consult with the Office of University Counsel before conducting business outside the state of Illinois to determine the applicable legal requirements. University Counsel may find it necessary to obtain the assistance of local legal counsel to interpret these foreign laws, at the unit's expense.

    University Counsel contacts:
    Chicago 312-996-7762
    Springfield 217-206-7796
    Urbana-Champaign 217-333-0560

  2. Consult with the Office of Treasury Operations, Tax Compliance and Analysis (Tax) before conducting business outside the state of Illinois to ensure compliance with tax and other related business laws. Tax assists with registration requirements for employment tax, sales tax, and other applicable tax obligations. It also obtains sales and use tax exemptions in other states and coordinates foreign tax issues.

    Tax Compliance and Analysis contact:
    217-244-8359

    Related policy: 18.16 Implications of Conducting Business Outside the State of Illinois

  3. Contact the University Purchasing before securing any services and goods, including services of an independent contractor or housing and office space. Do not begin any work until the required contracts have been fully executed.

    University Purchasing contacts:
    Chicago 312-996-7084
    Springfield 217-206-6651
    Urbana-Champaign 217-333-3505
    Purchasing Who To Ask

    Related policy: 1.3.2 Initiation, Review, and Approval of University Contracts and Leases

  4. Consult with your System or university human resources (HR) office before beginning any search, recruitment effort, or hiring, to ensure all policies and processes are followed. HR will also determine impacts on bargaining units.

    Contact HR before using the services of a System employee. Do not begin any work until HR ensures that appropriate employment documents are completed. Refer to 17.2 Classification of Independent Contractors Versus Employees to determine proper worker classification.

    Human Resources contacts:
    uihr@uillinois.edu
    System Human Resource Services (SHRS)
    Main Line 217-333-2590
    Chicago 312-996-5130
    Urbana-Champaign 217-333-2600
    University Equal Opportunity 217-333-7925

  5. Contact University Payroll and Benefits (UPB) to ensure that relevant employment taxes are properly withheld.

    Withholding and documentation requirements in each state and country are unique. Employees working in another state must complete a Form W-4 or withholding statement for that state and a certificate of non-residence in Illinois or a Form IL-W-5-NR, Employee's Statement of Nonresidence in Illinois. UPB works with employees to collect the required documentation. UPB makes tax deposits and reports withholdings and earnings based on state requirements.

    University Payroll and Benefits contacts:
    payinq@uillinois.edu
    Chicago 312-996-7200 (Phone Number requires dialing all 10-digits)
    Springfield 217-206-7144
    Urbana-Champaign 217-265-6363

  6. Consult with the Office of Treasury Operations, Cash Management (CM) before conducting banking outside of the United States. CM determines the best strategy to navigate the complexities of foreign banking laws. All banking relationships are opened through CM. Also, CM obtains the signature of the CFO and Board approval, if necessary.

    Cash Management contacts:
    cashmgmt@uillinois.edu
    217-333-2400

    14 Investments, Banking, and Internal Loans - Manage Foreign Bank Accounts
    14 Investments, Banking, and Internal Loans - Open or Close Bank Accounts

  7. Consult with the University Risk Management Office before beginning business activities outside the state of Illinois to assess risk management issues and determine whether insurance coverage is required.

    Inform Risk Management if leased space is needed. Also, inform Risk Management if any System vehicles will be used for System business because special insurance may be required. There may be additional issues to consider when employees live and work outside the United States, such as workers' compensation and medical evacuation and repatriation insurance. Several states and foreign countries do not accept the System's workers' compensation self-insurance plan, requiring the purchase of commercial workers' compensation insurance. Units must bear this additional cost.

    Risk Management contact:
    217-333-3113

  8. Consult with Real Estate Planning Services (RES) at least six months in advance of needing off campus leased space. Space needs assessments are performed by each campus in conjunction with Facilities and Services and/or the Office of the Provost.

    Real estate transactions including leases, licenses, easements, acquisitions, and dispositions must be processed by RES on behalf of the Board of Trustees.

    Real Estate Services contacts:
    Chicago 312-996-2949
    Springfield / Urbana-Champaign / System Offices 217-244-4483
     

For additional information, refer to 18.16 Implications of Conducting Business Outside the State of Illinois.

Last Updated: November 30, 2017 | Approved: Senior Associate Vice President for Business and Finance | Effective: March 2016

1.6.1 Comply with Anti-Bribery Laws
 

Policy Statement

The University does not permit bribes, kickbacks, or other similar unlawful inducements to be offered or given to any individual, organization or government, either directly by an employee, officer or trustee or indirectly through an agent or intermediary.

To prevent third parties from offering corrupt payments on the University's behalf, all University employees, officers and trustees must exercise care and take precautions to ensure all University business relationships are with reputable and qualified persons and entities.

The University also prohibits its employees, officers, trustees and agents acting on behalf of the University from accepting bribes, kickbacks, or other similar unlawful inducements offered for the purpose of influencing the individual or the University in connection with any University activities.

Reason for the Policy

The University is subject to, and must comply with, the Foreign Corrupt Practices Act (FCPA) of 1977. The anti-bribery provisions of the FCPA make it unlawful for a U.S. person, including the University or an employee, officer, trustee or agent of the University, to pay or authorize the payment of money or anything of value to a foreign official in order to influence any act or decision of the foreign official in his or her official capacity or to secure any other improper advantage in order to obtain or retain business. The law prohibits not only cash bribes but also offers of favors and other inducements that are of value to the recipient, such as inappropriate gifts and entertainment. The FCPA prohibits direct payments or offers to foreign officials, as well as indirect payments or offers made through a third party, such as a consultant or other agent.

Violations of the FCPA and similar foreign laws, such as the U.K. Bribery Act of 2010, can lead to criminal, civil and regulatory penalties for the University and the individuals involved, as well as disciplinary action, up to and including termination of employment. Violations can also result in significant damage to our collective reputation. Foreign bribery laws may be more restrictive than the FCPA.

Applicability of the Policy

All University employees, officers, trustees and agents (contractors, associates and other third parties acting on behalf of the University) must comply with the FCPA. 

The University of Illinois participates in many international activities in Illinois and abroad. The following are examples of University activities where the FCPA and similar foreign anti-bribery laws are particularly relevant:

  • Collaborations with foreign institutions and entities, especially those owned or operated by a foreign government;
  • Events hosted by the University that include foreign visitors, especially foreign officials;
  • Projects that involve interactions with foreign officials; and
  • Education programs offered overseas or on a campus in which foreign officials may enroll. 

Definitions

Bribes and Kickbacks

"Bribes" and "kickbacks" can be money or anything else of value, such as:

  • Gifts, meals, hospitality, entertainment, and travel expenses to foreign officials and/or their family members of any value if they are likely to evidence an intent to improperly influence a foreign official;
  • “favors” provided to foreign officials, such as an internship for a family member outside the normal hiring process, or hiring a vendor owned by a foreign official or a member of his or her family, or admitting to an educational program an unqualified candidate because of his or her relationship to a foreign government official;
  • donations to a charity associated with or at the request of a foreign official; and
  • free use of University facilities or property.
Agent or Intermediary

For the purpose of the University policy, an “agent or intermediary” refers to a person or entity retained to represent the University or help the University conduct business in a foreign country.

Obtaining or Retaining Business

“Obtaining or retaining business” is interpreted broadly and encompasses more than the mere award or renewal of a contract. For example, it may include payments to obtain favorable tax treatment. Also, the business to be obtained or retained does not need to be with a foreign government or foreign government-controlled instrumentality.

Guidance

Reputable and Qualified Partners and Representatives

In exercising care and taking precautions to ensure business relationships are only with reputable and qualified partners and representatives,” University employees, officers and trustees should conduct due diligence appropriate under the circumstances. In this regard, the U.S. embassy or consulate may be a good source of information on the reputation and business practices of the prospective partner or representative. In negotiating a business relationship, red flags should be considered, e.g., unusual payment patterns or financial arrangements, a history of corruption in the country, unusually high commissions, “consulting agreements” that include only vaguely described services, lack of transparency in expenses and accounting records, apparent lack of qualifications or resources on the part of a prospective partner or representative to perform the services offered, and whether a prospective partner or representative is related to, closely associated with or recommended by an official of the potential governmental customer.

Willful Blindness and/or Deliberate Ignorance

To constitute a violation of the FCPA, the payment or other inducement to the foreign official must be made knowing that it is unlawful. However, a person subject to the FCPA will not avoid civil or criminal liability by “willful blindness,” “deliberate ignorance,” or by engaging a third-party to take action on behalf of the University under circumstances where there is a high probability the third-party’s action would violate the FCPA.

Entertainment and Gifts

Entertainment and gifts that are not allowed include:

  • Any gift of cash or a cash substitute;
  • Anything that is offered as a quid pro quo;
  • Any gift or entertainment that is illegal under the foreign country’s laws, or known to be prohibited by the foreign official’s department, agency, or organization;
  • Anything that may result in, or may be perceived as resulting in, a decision by a foreign official providing a personal benefit to a member of the University community;
  • Anything given to foreign officials associated with a tender or competitive bidding process where the University is involved;
  • Any inappropriate entertainment (such as entertainment that is illegal under local law or U.S. law);
  • Any travel, entertainment, or gifts to family members of foreign officials. (In rare instances and subject to the express pre-approval of the Office of Business and Financial Services (OBFS), it may be acceptable for the University to pay for the travel expenses of the spouse of a foreign official who has been invited to speak on campus, consistent with the University's policies for pay and travel expenses of spouses and speakers who are not considered foreign officials.

Anti-bribery laws and this policy do not prohibit the open and transparent giving of small tokens of gratitude to anyone, or the incurring of bona fide hospitality business expenses when consistent with federal, state and local laws and regulations and other University policies. However, keep in mind that the FCPA does not contain a minimum threshold amount for corrupt gifts or payments. What might be considered a modest payment in the United States could be a more significant amount in a foreign country. In any case, small gifts in the following situations are unlikely to be considered violations of the FCPA when there is no intent to improperly influence a foreign official:

  • Giving hospitality gifts that are modest and reasonable, both in isolation and in the context of other hospitality offered to others in a similar situation;
  • Presenting a small token of esteem or gratitude to display respect consistent with reasonable business practice;
  • Extending normal courtesies as long as the expenses are nominal and reasonable;

Provided

  • Any such small gift is given openly and transparently and properly approved and recorded;
  • The expenses are not within any of the categories of prohibited gifts and entertainment above; and;
  • The expenses are otherwise permissible under all applicable U.S. and foreign laws and regulations.
Non-University Activities and Financial Interests

All academic staff, including faculty, academic professionals and postdoctoral associates, are reminded of their obligation under State law and University policy to report and obtain approval for their non-University activities and financial interests each year, including those involving foreign entities or institutions. For more information on this obligation, visit the Office of the Vice President for Research website.

University policy also requires Civil Service employees to disclose activities that may present a potential conflict with their University roles and responsibilities. This is outlined in Rule 16.01 of the Policy and Rules for Civil Service Staff. For more information, contact your supervisor, unit head, or staff Human Resources office, or visit the Office of the Vice President for Research website.

 

Additional Resources

Office of the Vice President for Research
Rule 16.01 - Policy and Rules for Civil Service Staff

Procedure

Any suspected or known violation of this policy must be reported to the University Ethics and Compliance Office. Contact the University Ethics and Compliance Office via the toll-free Ethics Line at 1-866-758-2146 or email at ethicsofficer@uillinois.edu.

Additional Resources

FCPA - A Resource Guide to the U.S. Foreign Corrupt Practices Act

Related Policies and Procedures

1.6.2 Reporting Fraud or Misconduct, Whistleblower Protection, and Investigations
1.5.1 How to Conduct Business Outside the State of Illinois
8 Reporting Foreign Bank Payments
14 Manage Foreign Bank Accounts

Last Updated: May 19, 2016 | Approved: Senior Associate Vice President for Business and Finance | Effective: March 2016

1.6.1.1 Report Suspected or Known Violations

Procedure

Any suspected or known violation of this policy must be reported to the University Ethics and Compliance Office. Contact the University Ethics and Compliance Office via the toll-free Ethics Line at 1-866-758-2146 or email at ethicsofficer@uillinois.edu.

Last Updated: March 7, 2016 | Approved: Senior Associate Vice President for Business and Finance - March 2016

Definitions

Bribes and Kickbacks

"Bribes" and "kickbacks" can be money or anything else of value, such as:

  • Gifts, meals, hospitality, entertainment, and travel expenses to foreign officials and/or their family members of any value if they are likely to evidence an intent to improperly influence a foreign official;
  • “favors” provided to foreign officials, such as an internship for a family member outside the normal hiring process, or hiring a vendor owned by a foreign official or a member of his or her family, or admitting to an educational program an unqualified candidate because of his or her relationship to a foreign government official;
  • donations to a charity associated with or at the request of a foreign official; and
  • free use of University facilities or property.

Agent or Intermediary

For the purpose of the University policy, an “agent or intermediary” refers to a person or entity retained to represent the University or help the University conduct business in a foreign country.

Obtaining or Retaining Business

“Obtaining or retaining business” is interpreted broadly and encompasses more than the mere award or renewal of a contract. For example, it may include payments to obtain favorable tax treatment. Also, the business to be obtained or retained does not need to be with a foreign government or foreign government-controlled instrumentality.

Last Updated: March 7, 2016 | Approved: Senior Associate Vice President for Business and Finance - March 2016

Guidance

Reputable and Qualified Partners and Representatives

In exercising care and taking precautions to ensure business relationships are only with reputable and qualified partners and representatives,” University employees, officers and trustees should conduct due diligence appropriate under the circumstances. In this regard, the U.S. embassy or consulate may be a good source of information on the reputation and business practices of the prospective partner or representative. In negotiating a business relationship, red flags should be considered, e.g., unusual payment patterns or financial arrangements, a history of corruption in the country, unusually high commissions, “consulting agreements” that include only vaguely described services, lack of transparency in expenses and accounting records, apparent lack of qualifications or resources on the part of a prospective partner or representative to perform the services offered, and whether a prospective partner or representative is related to, closely associated with or recommended by an official of the potential governmental customer.

Willful Blindness and/or Deliberate Ignorance

To constitute a violation of the FCPA, the payment or other inducement to the foreign official must be made knowing that it is unlawful. However, a person subject to the FCPA will not avoid civil or criminal liability by “willful blindness,” “deliberate ignorance,” or by engaging a third-party to take action on behalf of the University under circumstances where there is a high probability the third-party’s action would violate the FCPA.

Entertainment and Gifts

Entertainment and gifts that are not allowed include:

  • Any gift of cash or a cash substitute;
  • Anything that is offered as a quid pro quo;
  • Any gift or entertainment that is illegal under the foreign country’s laws, or known to be prohibited by the foreign official’s department, agency, or organization;
  • Anything that may result in, or may be perceived as resulting in, a decision by a foreign official providing a personal benefit to a member of the University community;
  • Anything given to foreign officials associated with a tender or competitive bidding process where the University is involved;
  • Any inappropriate entertainment (such as entertainment that is illegal under local law or U.S. law);
  • Any travel, entertainment, or gifts to family members of foreign officials. (In rare instances and subject to the express pre-approval of the Office of Business and Financial Services (OBFS), it may be acceptable for the University to pay for the travel expenses of the spouse of a foreign official who has been invited to speak on campus, consistent with the University's policies for pay and travel expenses of spouses and speakers who are not considered foreign officials.

Anti-bribery laws and this policy do not prohibit the open and transparent giving of small tokens of gratitude to anyone, or the incurring of bona fide hospitality business expenses when consistent with federal, state and local laws and regulations and other University policies. However, keep in mind that the FCPA does not contain a minimum threshold amount for corrupt gifts or payments. What might be considered a modest payment in the United States could be a more significant amount in a foreign country. In any case, small gifts in the following situations are unlikely to be considered violations of the FCPA when there is no intent to improperly influence a foreign official:

  • Giving hospitality gifts that are modest and reasonable, both in isolation and in the context of other hospitality offered to others in a similar situation;
  • Presenting a small token of esteem or gratitude to display respect consistent with reasonable business practice;
  • Extending normal courtesies as long as the expenses are nominal and reasonable;

Provided

  • Any such small gift is given openly and transparently and properly approved and recorded;
  • The expenses are not within any of the categories of prohibited gifts and entertainment above; and;
  • The expenses are otherwise permissible under all applicable U.S. and foreign laws and regulations.

Non-University Activities and Financial Interests

All academic staff, including faculty, academic professionals and postdoctoral associates, are reminded of their obligation under State law and University policy to report and obtain approval for their non-University activities and financial interests each year, including those involving foreign entities or institutions. For more information on this obligation, visit the Office of the Vice President for Research website.

University policy also requires Civil Service employees to disclose activities that may present a potential conflict with their University roles and responsibilities. This is outlined in Rule 16.01 of the Policy and Rules for Civil Service Staff. For more information, contact your supervisor, unit head, or staff Human Resources office, or visit the Office of the Vice President for Research website.

 

Additional Resources

Office of the Vice President for Research
Rule 16.01 - Policy and Rules for Civil Service Staff

Last Updated: March 7, 2016 | Approved: Senior Associate Vice President for Business and Finance - March 2016

1.6.2 Reporting Fraud or Misconduct, Whistleblower Protection, and Investigations

 

Purpose

The purpose of this policy is:

  1. to define employee and management responsibility for reporting fraud, potential or actual, or misconduct and to establish procedures for addressing wrongful conduct; and
  2. to protect any employee who engages in good faith disclosure of alleged wrongful conduct to a designated University official or public body.

More specifically it:

  • encourages employees to disclose serious breaches of conduct covered by the University policies or state or federal law;
  • informs employees how allegations of wrongful conduct can be disclosed;
  • protects employees from reprisal by adverse employment action as a result of having disclosed wrongful conduct (employees who self-report misconduct are not afforded protection by this policy) or participated in an ethics-related investigation; and
  • provides individuals who believe they have been subject to reprisal a fair process to seek relief from retaliatory acts.

Nothing in this policy is intended to interfere with legitimate employment decisions.

Policies Regarding Conduct, Behavior, and Reporting

The University has developed numerous policies and procedures for enforcing standards of conduct and behavior. Additionally, University employees are expected to abide by applicable state and federal laws. Furthermore, an employee cannot be compelled by a supervisor or University official to violate a University policy, an applicable law, or public policy. In the interest of the University, an employee who has particular knowledge of specific acts which he or she reasonably believes constitute wrongful conduct should disclose the conduct to the University Ethics and Compliance Office via the toll-free Ethics Line at 866-758-2146 or by email at ethicsofficer@uillinois.edu.

Employee and Management Responsibility

The University's Code of Conduct establishes guidelines for professional conduct and indicates those acting on behalf of the University have a general duty to conduct themselves in a manner that will maintain and strengthen the public's trust and confidence in the integrity of the University and take no actions incompatible with their obligations to the University. University employees are responsible for safeguarding University resources and ensuring they are used only for authorized purposes, in accordance with University rules, policies, and applicable law.

It is a violation of University policy for any employee to receive or use University resources for non-University purposes or personal gain. Management employees are responsible for detecting fraudulent activities or misconduct in their areas of responsibility. Each manager should be familiar with the types of improprieties that might occur in his/her area and be alert for any indication that improper or dishonest activity is or was in existence in his/her area. When dishonest or improper activity is detected or suspected, management should determine whether an error or misunderstanding has occurred or whether possible fraud exists. Management is responsible for taking appropriate corrective actions to ensure adequate controls exist to prevent the reoccurrence of fraud.

In addition to complying with University policies, employees are expected to comply with all applicable federal and state laws, which include but are not limited to the mandatory reporting of abuse or neglect of minors visiting our campus or participating in University sponsored activities.

Protection for Those Reporting Fraud or Misconduct

The State Officials and Employees Ethics Act (Ethics Act), 5 ILCS 430/15-5 et. seq. provides protection to University employees who:

  • Disclose or threaten to disclose to their supervisor or any public body an act or omission that the employee reasonably believes to be a violation of law, rule or regulation by another University employee;
  • Provide information to or testify before any public body conducting an investigation hearing or inquiry into a violation of law, rule, or regulations; or
  • Assist or participate in a proceeding to enforce the Ethics Act.

The University will not take retaliatory action such as:

  • Reprimand, discharge, suspension, demotion or denial of promotion or transfer that occurs in retaliation for an employee's exercise of any one of the three protected activities, above.

The Ethics Act provides remedies for employees if retaliation occurs, and if the employee's work performance or behavior did not warrant the adverse action, which may include one or more of the following:

  • Employee shall be made whole;
  • Reinstatement;
  • Two times back pay;
  • Interest on back pay; and/or
  • Payment of reasonable costs and attorneys' fees.

The employee would need to pursue a civil action in order to attempt to receive some or all of the remedial relief listed above.

Cooperation Following Report and During an Investigation

The reporting employee shall refrain from further involvement in the matter unless directed otherwise by the University Ethics and Compliance Office, the Office of University Audits, University Counsel, or University Police.

University employees are required to cooperate with the University Ethics and Compliance Office, Office of University Audits, University Police/Public Safety, the Office of the Executive Inspector General, and other involved law enforcement agencies in the detection, reporting, and investigation of fraud and/or misconduct, including the prosecution of offenders. The University Ethics and Compliance Office, Office of University Audits, University Counsel or University Police/Public Safety will direct management involvement in any University investigation.

The University Ethics and Compliance Office maintains records of these allegations. The University Ethics and Compliance Office or a referring unit (for example, internal audit, campus police, public safety, human resources) will follow-up on the matter which may include an investigation of the disclosure. Laws and University policies impose privacy and confidentiality restraints on reporting the results of such a review or investigation. Within the constraints of these laws and policies, the University Ethics and Compliance Office will acknowledge, and as appropriate and permissible by law and policy, provide confirmation of the status and outcome of the review.

It should be noted that a disclosure warranting an investigation is not the same as making a complaint of reprisal (adverse employment action or situation). In matters of disclosure, the University will make all reasonable efforts to maintain the identity of the employee making the disclosure confidential, as long as maintaining confidentiality does not interfere with conducting an investigation of the specific allegations or taking corrective action.

The University will take appropriate disciplinary and legal action against employees who commit fraud. The University's actions may include termination of employment, mandating restitution, and/or informing the appropriate authorities in accordance with University policies and procedures, and state and federal law.

Complaints of Reprisal

The University Ethics and Compliance Office will coordinate with the President or other senior management official to appoint an investigator. The investigator will report findings and recommendations to the senior management official concerning whether retaliation occurred, and if so, what the appropriate remedy or remedies will be. The decision of the senior management official will be final.

Definitions and Examples

Employee - Employee is defined as anyone who is compensated by the University or paid a fee for services by the University

Management - Management is defined as any administrator, manager, director, supervisor, or other individual who manages or supervises University resources.

Resources - Resources are defined as money, property, personnel (including time worked) or any other assets owned or controlled by the University.

Retaliatory Action - Retaliatory action includes reprimand, discharge, suspension, demotion, or denial of promotion or transfer.

Wrongful conduct is defined as:

  • a serious violation of University policy;
  • a serious violation of the University Code of Conduct;
  • a violation of applicable state and federal laws;
  • embezzlement or other financial irregularities; and/or
  • the use of University property, resources, or authority for personal gain or other non-University related purpose except as provided under University policy.

Examples of wrongful conduct or fraud covered under this policy include but are not limited to such actions as:

  • Theft, misappropriation, misapplication, destruction, removal, or concealment of University resources including intellectual property;
  • Forgery, falsification, or alteration of documents;
  • Improprieties/misrepresentation in the handling or reporting of money or financial transactions;
  • Authorizing or receiving payment for goods not received or services not performed;
  • Misuse of University facilities, such as telephones, email systems and computers;
  • Intentional violation of the Illinois Procurement Code (30 ILCS 500), including dishonest or improper reporting of results, selective reporting, or omission of conflicting data for deceptive purposes;
  • Accepting or offering bribes, kickbacks, or rebates;
  • Lack of reporting of actual or perceived abuse of a minor; and/or
  • Actions related to concealing or perpetuating above mentioned activities.

Additional Resources

University Ethics and Compliance Office
Office of Executive Inspector for the Agencies of the Illinois Governor

Last Updated: April 2, 2015 | Approved: University Ethics and Compliance Office | Effective: April 2015