- Table of Contents
- 410.00 Introduction
- 420.00 Forms
- 430.00 Processing Invoices
- 435.00 Purchasing Card
- 435.10 Purchasing Card Manual For Card Holders
- 435.20 Purchasing Card Misuse Policy
- 435.30 Purchasing Card Quick Reference
- 435.40 Purchasing Card Departmental Accounting Technician Application Form
- 435.50 Purchasing Card Application Form
- 435.60 Purchasing Cardholder Agreement
- 435.70 Purchasing Card Routing Log
- 435.80 Lost Receipt
- 435.90 Purchasing Card Trans Dispute Form
- 436.00 Alcohol Purchase Policy
- 440.00 Freight Payments
- 445.00 Moving Expenses
- 450.00 Automatic Payments
- 460.00 Hospitality Approval
- 460.10 Introduction
- 460.20 Definitions
- 460.30 Forms
- 460.40 Authorization
- 470.00 Special Checks
- 470.10 Introduction
- 470.20 Special Checks
- 480.00 Expenditure Account Codes - Operating Expenses
- 480.10 Non-Allowable Expenditures
- 490.00 Contracted Services
- 490.10 Contracting for Services
- 490.20 Determination of Status - Employee or Independent Contractor
- 490.30 Procedures for Contracting for Services of an Independent Contractor (Not for Consulting Services)
- 490.40 Procedures for Contracting for Consulting Services
- 490.50 Contracted Services Agreement Instructions
- 490.60 Contract Payment Information
- 490.70 Payment to Nonresident Alien Contractors
Disbursements to vendors for University purchases are processed by the Business Office, AES, ES, and Grants & Contracts. Section 400 addresses the specifics for travel disbursements.
The following forms are available at the Business Office or University Business Services in Montana Hall:
- Banner Payment Authorization (BPA)
- Travel Authorization and Advance [doc][pdf]
- Hospitality Approval Form
- Contracted Services Agreement
- Independent Contractor Checklist
- Payments to Nonresident Alien Contractors (packet) *Contact Tom Zulauf - University Business Services
- Moving Expenses (packet) *Contact Personnel/Payroll
- Outgoing Foreign Wire Transfer
- Costco Purchase Order Form and Costco Purchase Instructions
Secure an itemized, detailed invoice from the vendor for goods and/or services. Statements will not be accepted (unless stated as the only document furnished by the vendor). If no invoice is available, then use the lower left box on the BPA to itemize the costs.
Verify the invoice is correct in every detail. If there are errors, contact the vendor for a corrected invoice.
Sign the BPA in blue ink with the vendor's name and remit to address. BPA Form Complete the payment line with Index #, Account Code, amount, and Purchase Order (PO) (if applicable). In the Information box, list the remittal information. Please abbreviate when possible. We recommend the following information in order:
- Department name
- Customer or account number
- Invoice number
- Invoice amount (if different from the billed amount)
- Indicate discounts if taken.
Attach the original invoice(s) to the back of the BPA with two staples (one in each upper corner). Invoices smaller than the BPA should be taped to a full size sheet of paper. If there are multiple invoices to the same vendor, run an adding machine tape and attach to the upper left corner of the top invoice.
Obtain the appropriate signature(s).
Forward one (1) original copy of the approved invoice with the BPA to Accounts Payable in University Business Services.
Each department should keep a record of invoices processed for payment. These will be used to verify monthly reports.
The "prompt payment" law enacted by the 48th Legislature requires State agencies to pay most claims within 30 days, unless otherwise stated in a contract or agreement; or pay interest at a rate of .05% a day (18.25% per year) on the unpaid balance.
Original documents are required when submitting BPA's.
435.70 Purchasing Card Routing Log
435.80 Lost Receipt
436.00 Alcohol Purchase Policy
University Business Services pays certain freight bills directly. An information copy of the BPA is sent to each department.
United Parcel Service - University Business Services processes the BPA's to UPS for packages shipped from the MSU Post Office. Be sure your department name and charge number is on each package.
Greyhound - Be sure the department name and the charge number is listed on the original shipping order. Send a copy to University Business Services.
Purchases by departments of the University from MSU service departments are processed for automatic payment. (See Accounts Receivable Section)
Service departments will provide an information copy on a Centralized Accounts Receivable form for departmental purchases. Any corrections must be requested by memo to University Business Services indicating document number, service department, incorrect Index #, correct Index #, and amount.
According to Section 205.4 of the Montana University System Policy and Procedures Manual, expenses for official hospitality, community relations, or public relations may be paid by a unit only when such activities are directly related to the unit. Those authorized to approve hospitality must determine that the activity is directly related to an objective of the unit and evaluate the importance of the event in terms of cost verses benefits and alternatives that would be equally effective.If the hospitality is to benefit persons from outside the unit, the department may pay for the meal expenses of its guest and one official host from the department. OTHER DEPARTMENT MEMBERS ATTENDING MUST PAY FOR THEIR OWN MEALS.
An official guest is a person, not employed or compensated by the unit, who is present on the campus to render a service or as a position candidate.Meals do not include alcohol. Light refreshments mean non-alcoholic beverages and/or pastries or fruit.
A Hospitality Approval Form will be required for all hospitality that exceeds $30.00 for both on and off campus. The Hospitality Approval Form must be attached to the BPA with the itemized invoice.No payment for services can be made without the Hospitality Approval Form and the itemized invoice(s). See above to download Hospitality Approval Form.
To be reimbursed for hospitality that exceeds $30.00, the hospitality must be approved PRIOR to the event, using the Hospitality Approval Form.Authorization by the head of the department is sufficient for less than $50.00. If the cumulative invoices for hospitality exceed $50.00, both the Department Head and that person's supervisor must approve the expenditure.The Dean's or VP's signature is required if more than one MSU employee is attending. The host may not approve his/or her own hospitality.The amount authorized should be adequate to cover the cost of delivery and set up charges. If the amount is exceeded, the authorized approval authority must change and initial the requested amount and if necessary, additional signatures secured.
If you have ANY questions, please contact University Business Services.
University Business Services has one procedure for disbursements where timing needs cannot be met by the regular routing system for BPA's. This procedure is referred to by the term "SPECIAL CHECKS."
Special checks are written in University Business Services on those disbursements that demand immediate payment. Each request for a special check must be clearly marked and include an explanation why a special check is being requested. This revolving account is to be used for purposes demanding immediate payment only, generally for the following limited purposes:
- Shipping charges. Unanticipated travel. Purchases of NSF checks from local banks. Foreign bank drafts and international money orders. C.O.D. payments. Orders when prepayment is required. Honorariums and/or reimbursements to invited guests.
- Reimbursements of campus department petty cash funds.
480.00 Expenditure Account Codes - Operating Expenses
The MSU Purchasing manual states that "...purchases for personal use are not allowed." /policy/purchasing/purch400.htm - 420. Personal expenditures are not allowable for reimbursement, regardless of the funding source. Below are some examples that University Business Services considers to be personal expenditures, and as such are not reimbursable.
Cash may no be charged the University Purchasing Card and transferred to a personal One Card.
Gifts or Awards
Given for graduation, birthday, leaving MSU employ, Secretary's Week, awards to students outside the Financial Aid process, weddings, showers, etc.
Given as a gift, for a funeral, or for office. Purchase of flowers may be allowable if they are business related with approval from University Business Services.
Purchased for greetings, birthday, wedding, "going away", funeral, etc.
- Parking Decal and personal fines
Parking Decal is a personal expense as discussed in MSU's Parking Regulations at http://www.montana.edu/wwwmsupd/regulati.shtml. Fines incurred are also considered personal expenses.
The purchase of temporary parking hangtags may be allowed if they are for a visitor from another state agency, candidate for a position, workshop attendees, visiting dignitaries, etc.
- Graduation Regalia and other clothing (non-uniform)
Graduation regalia-- cap, gown, and hood-- are all personal expenses whether they are for a student or Faculty.
Certain clothing may be purchased if it will be consumed in the course of completing a research project.
- Office treats
Purchase of treats for office personnel is not an allowable expenditure.
Drugs and Alcohol
Purchase of drugs and alcohol or any substance, material or service, which violates
policy, law or regulations pertaining to Montana State University is not allowed with
the following exceptions: Drugs may be purchased for medical purposes through the
Student Health Service or for a sponsored research project. Alcohol may be purchased
for approved events if the Alcohol Request Form has been completed and approved. See
the MSU Alcohol Policy.
Non-Allowable reimbursements are not limited to this list.
Occasionally the University desires to purchase services that cannot be provided by existing University employees. Under Montana law, there are two distinct types of purchased services - services as defined by the Montana Procurement Act and Consulting Services.
Services Under the Montana Procurement Act: Under the Montana Procurement Act, "services" means the furnishing of labor, time or effort by a contractor, not involving the delivery of a specific end product other than reports which are merely incidental to the required performance. Section MCA 18-4-123 (18) MOM Procurement Resources, VI, Services.The term does not include:
consulting services as defined in Section MCA 18-4-132;
the services of registered professional engineers, surveyors, real estate appraisers, registered architects, physicians, dentists or other medical, dental or health care providers;
expert witnesses hired for use in litigation;
hearing's officers for rule making and contested case proceedings, attorneys, consulting actuaries to the public retirement boards;
services purchased with money raised from student activity fees;
services provided by providers of human services regulated by a state agency;
services related to construction contracts; or
services provided under collective bargaining agreements or employment contracts.
Consulting services are defined as the "human service of studying or advising an agency under an independent contract." The term is limited to the provision of professional consulting and does not include the making of periodic or routine reports or the collection of routine data necessary for the functioning of a state agency.
For all contracted services, the person providing the service must not be a current or former employee unless more than six months has elapsed since his/her termination. Montana law prohibits contracting with former state employees, within six months following their termination, to perform services related to matters the employee was involved with during his or her state employment. Section 2-2-201, MCA MOM State Ethics Policy, III, C, 9. Departments must determine the appropriate employment status of persons or firms providing services to the University before entering into the contract.For workers' compensation, unemployment insurance, social security and state and federal income tax purposes, employment status is defined as either employee or independent contractor. The legal responsibility for tax withholding and/or provision of benefits depends on this determination. Prior to entering into a contract, departments must determine whether the relationship with the person or firm providing the service is an employment relationship or an independent contractor relationship. If the contractor fails to meet the criteria for independent contractor status, the contractor is not an independent contractor and should be placed on the University payroll, consistent with University Personnel policy.Although federal and state definitions are not identical, departments may use the Independent Contractor Checklist, available to download from the Forms area above, as a guideline for determining employment status. To be considered an "independent contractor," a firm or individual should meet the criteria set forth on the checklist. Failure to meet one or more criteria strongly indicates an employee/employer relationship.
490.30 Procedures for Contracting for Services of an Independent Contractor (Not for consulting services):
Describe the Services: Prepare an explicit written description of the required services.
Determine if the service is that of an "employee," an "independent contractor for services" or an "independent contractor for consulting services."
Use the correct procedure for the service. If "employee," contact Personnel Services. If "consulting services," use the "consulting services" procedure set forth in Section 390.40. If "contracted services" use the following procedures.
Contracts for contracted services of less than $2,000: Obtain bids if required. Complete the contracted services agreement. The agreement should be completed and signed by all parties indicated on the form before services begin.
Contracts for contracted services of $2,000 or more: Except for Facilities Services which may contract up to its delegated authority, all others must complete the standard purchasing requisition form, including a full description of the desired services and suggested service provider(s).
Route the requisition through the appropriate approval authorities to MSU Purchasing. The Purchasing Department will review the requisition, determine if it should be handled on campus or must be processed by the State of Montana Purchasing Bureau. MSU Purchasing will complete the processing by securing bids, obtaining contract signatures, obtaining required certifications and issuing a purchase order for the contracted services.
Whenever it is reasonably foreseeable that a contract for consulting services will exceed $5,000, the selection process outlined in Section 18-4-133 and 18-4-141, MCA, must be followed. Please contact Purchasing for more information.
Any purchase of services from an independent contractor which is $500 or more in value requires a written contract. Download the Contracted Services Agreement form by going to forms above to simplify contracting with independent contractors who provide services to MSU. The form incorporates the recommendations of the Montana Department of Administration as to the provisions which should be found in such contracts.This form is not recommended for use if the contract is with a state or local government, a college or university or for purchase of computer programming services. These types of agreements usually require the inclusion of unique provisions which are not contained in the Contracted Services Agreement form. MSU Legal Counsel will assist in the development of an appropriate agreement in these situations.This form is a proposal for a contract which incorporates the major provisions required under state law and university policy. Provisions can be modified to meet the particular needs of the contract if it is in the best interest of MSU. If you need any assistance in modifying the terms of this agreement, please contact the MSU Legal Counsel.
Preparing the Contract
The person preparing the contract should fill in the blanks as shown.
Purpose: This section should explain what the contract is intended to accomplish.
Effective date and duration: In most cases, performance should not begin until a contract has been signed and a Purchase Order has been awarded. In all cases, performance should not begin prior to the time the funds were authorized for the contracted service.
Services: This section should contain a thorough explanation of the services to be provided and the deliverables expected. Where there is a separate description of the work or proposal which has been submitted by the contractor and accepted by MSU, it should be referenced under this section. E.g., The contractor will perform the services as outlined in the proposal attached as Exhibit A to this contract.
Consideration: This section should specify the total amount to be paid to the contractor and a description of how and when it will be paid. Any instructions regarding how the contractor must submit the billing or invoice should also be described.
Ownership and Publication of Materials: This section should be reviewed carefully to assure that it is appropriate for the contract in question. If there is the likelihood that copyrightable works will be produced under the contract, it may be necessary to negotiate and draft a more thorough provision concerning the ownership of intellectual property developed under the contract.
Process for Finalization
It is recommended that the general terms of the contract be negotiated with the independent contractor before the contract form is completed. After the contract is drafted to the satisfaction of the Principal Investigator or Department Head, the relevant signatures of the MSU officials should be obtained and the contract should be forwarded to the contractor for his/her signature. If the contractor requests modifications which are acceptable to all parties, the contract can be redrafted or changes can be made on the contract and initialed by all of the parties. The original approved contract should be attached to the BPA with a copy retained by the department if less than $2,000.
All contracts exceeding total payment(s) of $500 (including travel costs) must be written. The original approved contracts with all attachments must be sent to the Purchasing Department. A copy of the contract must be attached to the Banner Payment Authorization (BPA). If additional payments are necessary during the same fiscal year, the document number of the first payment should be referenced, as should the number of the payment (i.e., the third of five payments). A copy of the contract must be attached to the first BPA processed for each fiscal year.Forms required for payment of Contracted Services totaling less than $2000 are:
- Banner Payment Authorization (BPA) Original Contract Bid Tabulation form or Sole Source form Departmental Purchase Order
- Vendor invoice
A nonresident alien contractor is an individual of a foreign country that performs independent personal services. Examples of these services might include a foreign guest speaker or a foreign language translator. To receive payment for these services, the individual must have a United States Social Security Number. If they do not have the required number, they must apply for one at the Social Security Office. The University is required to file IRS Form 1042S, Foreign Person's US Source Income Subject to Withholding, for services performed by all nonresident alien contractors. The University is also required to deduct a 30% withholding tax on all payments made to these contractors unless they qualify for a reduced rate or exemption under an applicable tax treaty. This can be determined by completing IRS Form 8233, Exemption from Withholding.
For paying a nonresident alien, please see this link.