Professional Service Contracts (PSCs) - PowerPoint Presentation

Slide1

Professional Service Contracts (PSCs)

An overview and general information

SERV January 30, 2014Slide2

PSC - Definition

The PSC is a means by which contracted services can be obtained, employee vs. independent contractor status can be determined, and the interests of the University protected. The document can be found at:

http://usd.msu.edu/files/documents/ap-pur-psc-rev3.pdf

Slide3

PSC Use

The PSC is only to be used for customized services:

with independent contractors that are for professional, or

technical services that are predominantly intellectual in nature and require specialized knowledge

In most cases the services are of a specific project nature and not ongoing. Slide4

PSC Use Continued

An independent contractor provides service for the university

but is free from immediate control or direction in the performance of his or her work under a contract of service

A worker is an employee if the person for whom he works has the right to direct and control him concerning when and where to do the workSlide5

PSC and MSU Employees

Individuals currently employed by the university may

not

be paid as an independent contractor.

Individuals who were previously employed by the university may not be paid as an independent contractor

in the same calendar year that they were an employee performing the same dutiesSlide6

Conflict of Interest Disclosure Form

PSCs with Individuals who have relatives employed with MSU must include the PSC Conflict of Interest Form

This form is located at:

http://usd.msu.edu/files/documents/conflict-of-interest.pdf

Slide7

PSC General Information

The PSC is intended for use with contracted services only, not for the procurement of printed materials, other products or any service involving labor.

The PSC form is completed (

for contracts of $600 or more

) and sent to the proper Institute Fiscal Officer (FO), ANR Events, or other unit as indicated.Slide8

PSC General Information - continued

For services under $600.00

Disbursement Voucher (DV) may be processed as a means for payment for services without completing the PSC

For contracted professional services ≥ $600.00

MSUE departments need to complete the PSC (and submit it to the Institute FO, ANR Events or other unit), or

Hire an individual on a project pay basis through Human Resources as a temporary employee.

University limits when project pay may be used

Project pay must be carefully considered with respect to possible affordable care act costsSlide9

PSC General Information - continued

Payments for honoraria, speakers and performers do not require a PSC or requisition by MSU.

MSUE requires

a PSC is completed and sent to the Institute FO or ANR Events,

for any honoraria, speaker or performer payments ≥

$600

This will protect MSUE’s interests and ensure that the service being provided meet the criteria on page three of the PSC document. Slide10

PSC Payments < $600In the cases of Honoraria/Speaker/Performer payments less than $600Can be processed using a DV along with the completed

Honoraria/Speaker/Performer Checklist, available in Section 71 of the MBP: http://ctlr.msu.edu/download/mbp/Sec71HonorariaChecklist.pdfPlease pay special attention to the: “Documentation (check one or more)” section on the checklist

Attach and submit the required documentation with the checklist along with your payment request to the MSUE Business Office or ANR Events via email. In the body of the email please confirm that the following statements are true:Slide11

Honoraria/Speaker/Performer ChecklistPerson requesting payment for honoraria/speaker/performer < $600 should make sure the following criteria are accurate for (U.S. citizens and permanent residents only):

The above-referenced service provider presented a lecture or address, conducted a training session as a one-time or occasional speaker, or presented a

performance.

The

service provider is not a current employee or student at Michigan State University.

The service provider does not receive extensive instructions on how to perform his/her

job.

The

service provider does provide or could be available to perform this job at other businesses/schools.

The service provider does not receive benefits from Michigan State University.

The university and the service provider agree, either in writing or orally, that the relationship is strictly that of

an

independent

contractor. Slide12

Honoraria/Speaker/Performer Checklist - continued

Include in the email the account/subaccount that the Honoraria/Speaker/Performer payment is to be issued from.

Include a business purpose for the payment in the body of the email as well.

Attach a W-9 completed by the contractor.Slide13

PSC Completion PRIOR to Service Being Provided

The PSC document is not intended for use as an “after-the-fact” means of paying suppliers for services

All PSC documentation is to be completed

in advance

of bringing a contractor on board to perform a specific set of activities if payment is $600 or moreSlide14

PSC Over $15,000 No Competitive Bid

A sole or single source justification is required for a PSC over $15,000 when competitive bids are not soughtSlide15

PSC and External Agency Maximum Limits – Check First!Some agencies have maximum consultant ratesDept. of Justice: $450/dayNational Science Foundation: $521/day (Executive Schedule Level IV Federal employee)

Other agencies have various maximums.Slide16

PSCs and RC AccountsPSC’s on RC accounts must include the following information.Dates that are within the project period.Rate Justification.Distinction between services and expenses.

Reminders for PSC payments on RC accountsCopies of receipts must be submitted for all expensesInvoice must include dates of service and signature

The department/PI should verify that consultant expenses comply with agency and university restrictionsSlide17

PSCs and CGA

CGA approval is not required for PSC payments

However CGA may spot-audit the payment and/or request further information!Slide18

PSC Types of ServicesExamples of services for PSC:InterpretersResearchersFreelance writing

Educational advisory servicesSpeakersLecturing/training for longer period of timeSlide19

Questions

Holly A. Lacina, MPA

MSU Extension Business Office

Children and Youth Institute

Justin S. Morrill Hall of Agriculture

446 West Circle Drive, Room 160

East Lansing, MI 48824-3754

Email:

lacinah@msu.edu

Phone: 517-432-6567

Fax: 517-432-7644

MSUE BUSINESS OFFICE WEB SITE:

http://od.msue.msu.edu/business_office