Disbursement Services Section (APY)
PROCEDURE 6
Effective Date: 04/16/2003
Last Modified Date: 08/06/2006
Procedure Description
The Request for Payment of Independent Contractor is a Disbursement Services/Accounting/Sponsored Research form that provides departments with a method to pay for individual services. Prepare it online through the Finance Central Web site [choose Check Request; under Payee Type choose Contractor (Independent).]
See also MSD Policy 27, Contractual Services, for guidance concerning independent contractor services that require competitive procurement and/or other Purchasing-related actions before engaging independent contractor services; and CON Policy 3d, Expenditure Guidelines-Contractual Services.
Who Is an Independent Contractor?
An individual who has no employee affiliation with UNC and provides services to UNC. The IRS has developed 20 questions to help define this relationship. See APY Appendix 5, Employee vs. Independent Contractor.
Additional information is available on the Human Resources Web site.
Types of Expenditures
The types of expenditures that can be processed on the Request for Payment of Independent Contractor form include, but are not limited to, the following:
- Accounting/Audit Fees: Professional fees paid to accountants for accounting and auditing services that cannot be competitively bid.
- Consultants' Fees-Academic/Research and Expenses-Fees paid to a professional specialist for consultant services (see CON Policy 3d and MSD Policy 27) when such services are for instructional services, curriculum development, or academically oriented research. Includes reimbursement of travel and out-of-pocket subsistence business expense for these persons. Note that using the "consultant object code" for a service does not make the service a consultant service for Purchasing purposes. The Material & Disbursement Services (Purchasing Office) should be contacted before the services are engaged if there is any question whether specific services fall outside the scope of those regulations that require Purchasing-related actions or approvals.
- Expert Witness Fees-Payments to a professional specialist for services as an expert witness in legal and regulatory proceedings.
- Honorarium, Non-University Employee Personal Services and Expenses (One-Time Payments)-Payments to professional persons for services rendered when custom or propriety forbid the setting of a fee. Includes reimbursement of travel and out-of-pocket subsistence business expense for these persons.
- Legal Fees and Expenses-Professional fees paid to attorneys for legal services. Includes reimbursement of travel and out-of-pocket subsistence business expense for these persons.
- Medical Fees and Expenses-Professional fees paid to medical doctors, dentists, nurses, etc. for medical services rendered on behalf of the institution. Includes reimbursement of travel and out-of-pocket subsistence business expense for these persons.
See also MSD Policy 27, Contractual Services, and CON Policy 3d, Expenditure Guidelines-Contractual Services.
Procedure Steps
Do not use this form for employee compensation for services or employee travel reimbursement.
The following are not considered State agencies and their employees are exempt from the Dual Employment Policy: public schools, community colleges, and cities and counties.
Use the permanent address of the contractor performing the work (not the department's campus address).
The contractor should submit an invoice that includes an explanation of need (nature of services, place work performed, equipment provided, purpose accomplished, etc.); the cost of services (total cost of services, whether at a daily or hourly rate or a flat fee; and any reimbursable costs-original receipts must be attached for all reimbursed costs except mileage).
The invoice must be signed by the contractor and must contain the following statement: "Section 6109 of the Internal Revenue Code requires you to furnish your correct TIN to persons who must file information returns with the IRS to report interest and certain other income paid to you. The IRS uses the number for identification purposes and to help verify the accuracy of your return. You must provide your TIN whether or not you are required to file a tax return."
Complete the first screen of the online form and choose "Validate, Save and Go To Page 2."
The second screen of the online form contains the various criteria that must be considered and satisfied for each contractor. Answer each question, even if the response is "none" or "not applicable."
Print the Supporting Documentation Form (be sure to click "Format to Print" first) and the Check Request (be sure to click in the frame in which the Request is displayed).
Note: The AP-1a is considered a specialized type of Check Request. It will begin with a "C" instead of with a "K."Make a copy of the original invoice and any receipts for reimbursement, along with the Supporting Documentation Form. Send the originals to the address shown on the top of the Supporting Documentation Form. Additionally, for payments made from Federal funds, attach written Federal agency permission, if required.
Additional Information
APY Policy 1, Summary of Payment Forms
APY Appendix 5, Employee vs. Independent Contractor
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