In this Open Comment Period:
Section 8 - Determine the Allowability of Specific Expenditures Financial Assistance and Sponsorship Payments to Outside Organizations
In this Open Comment Period we present updated policy and procedural information for processing financial assistance and sponsorship payments to outside organizations.
Changes to the policy include:
- Allows financial assistance/sponsorship payments of $5,000 or less to be made using the new Financial Assistance/Sponsorship Payment Form without the need for a two-party signed contract.
- Defines University Purchasing and University Payables roles within the process.
- Requires Recipients to have a Banner Vendor ID prior to processing a financial assistance/sponsorship payment request.
- Provides new examples to assist in determining what is/is not allowed to be paid as a financial assistance/sponsorship agreement.
- Outlines new procedures for processing financial assistance/sponsorship payments and provides a new job aid to assist with processing.
- Allows payments to Registered Student Organizations (RSOs) that conform to this policy to continue to be processed; a financial assistance/sponsorship payment policy specific to RSOs is under review.
- Defines four activities which Recipients are not allowed to use financial assistance/sponsorship payments towards.
- Provides additional funding source options for financial assistance/sponsorship payments.
- Requires all financial assistance/sponsorship payments to be made using account code 186550.
Policy Statement
Financial assistance and sponsorship payments may be made to a non-University entity (“Recipient”) to support initiatives that promote or advance one or more of the University of Illinois System’s missions.
In order to make a financial assistance/sponsorship payment to a Recipient, the Recipient must have a Banner Vendor ID.
Financial assistance/sponsorship payments to Registered Student Organizations (RSO) that comply with this policy are allowed.
Reason for the Policy
This policy establishes the authority for -- and limitations on -- making financial assistance/sponsorship payments to non-University entities.
Applicability of the Policy
This policy applies to all financial assistance/sponsorship payments made to non-University entities
Allowability
Financial assistance/sponsorship payments must be made to an organization, not to an individual. Prior approval is required from the Assistant Vice President of Procurement Services in the rare circumstance where a unit is requesting a financial assistance/sponsorship payment to an individual. If approval is granted for a financial assistance/sponsorship payment to an individual and the individual is a student, the payment should be processed following the steps for Payments to University of Illinois Students.
Financial assistance/sponsorship payments to a Recipient cannot be used to:
- carry on propaganda or otherwise attempt to influence legislation;
- influence the outcome of any public election;
- carry on, directly or indirectly, any voter registration drive; or,
- conduct illegal activity.
A unit cannot use a financial assistance/sponsorship payment if the unit is making a purchase, as defined in the Illinois Procurement Code (30 ILCS 500/). Examples of what would be considered a purchase include payment of funds to: obtain goods that will be owned by the University of Illinois System; obtain goods which the University of Illinois System in turn donates to the Recipient; obtain goods using a University of Illinois System license, hazardous material certification, or other similar authorization; or, to obtain a service which is completed on behalf of or under the direction of the University of Illinois System.
Financial assistance/sponsorship payments cannot be artificially divided to circumvent the dollar thresholds established in this policy.
The Recipient is not allowed to utilize the University of Illinois System’s tax exempt status for any purchases the Recipient makes with the financial assistance/sponsorship payment.
Financial Assistance/Sponsorship Payment to a Recipient With/Without Consideration
A unit may make a financial assistance/sponsorship payment to a Recipient for no consideration if the Recipient’s activities promote or advance one or more of the University of Illinois System’s missions.
A unit may make a financial assistance/sponsorship payment to a Recipient for consideration if it is not a purchase and the Recipient is promoting or advancing one or more of the University of Illinois System’s missions.
Allowable Example (with consideration): A financial assistance/sponsorship payment may be made to a Recipient to sponsor the Recipient’s annual conference if the Recipient’s annual conference promotes or advances one or more of the University of Illinois System’s missions. It is acceptable to obtain consideration such as advertising in the annual conference’s brochure as a sponsor. The University of Illinois System may also obtain consideration in the form of conference registrations as long as the financial assistance/sponsorship payment is not solely being made to purchase the advertising in the conference brochure or to purchase the conference registrations.
Consideration for a financial assistance/sponsorship payment cannot be a purchase.
Unallowable Example (with consideration): A financial assistance/sponsorship payment cannot be made to solely: purchase conference registrations; obtain access to a vendor booth at the Recipient’s conference; or pay for an individual’s dues to an organization. These activities would be considered a purchase regardless whether or not the conference promotes or advances one or more of the University of Illinois System’s missions.
Financial Assistance/Sponsorship Payment for a Recipient to Purchase Goods or Services
When making a financial assistance/sponsorship payment for a Recipient to purchase a good or a service, unit may identify the intent of the financial assistance/sponsorship payment to the Recipient.
Allowable Example (good): A financial assistance/sponsorship payment can be made to a Recipient for the Recipient to purchase nametag-lanyards to be given out at their annual meeting if the Recipient’s annual meeting promotes or advances one or more of the University of Illinois System’s missions.
Allowable Example (service): A financial assistance/sponsorship payment can be made to a Recipient for the Recipient to pay for catering services at their annual meeting if the Recipient’s annual meeting promotes or advances one or more of the University of Illinois System’s missions.
To maintain the autonomy of the Recipient and mitigate risk to the University of Illinois System, the unit should not direct how, when and where the financial assistance/sponsorship payment must be used by the Recipient.
Unallowable Example (good): This financial assistance/sponsorship payment is made to the Recipient for the Recipient to 100 green, 100 red and 100 blue nametag-lanyards from [Specific Nametag-Lanyard supplier] to be provided to attendees of the Recipient’s annual meeting.
Unallowable Example (service): A financial assistance/sponsorship payment cannot be made to the Recipient if the University of Illinois System is directing that the financial assistance/sponsorship payment must be used to pay $500 to a specific catering company to cater the Recipient’s annual meeting.
Unallowable Example (service): The University of Illinois System cannot make a financial assistance/sponsorship payment directly to a catering company to cater a Recipient’s annual meeting.
Funding
Financial assistance/sponsorship payments must be funded from institutional, gift, endowment income, or self-supporting funds (when directly related to generation of the fund’s revenue). Use of any gift funds must comply with the donor’s intent, where applicable. State appropriated funds cannot be used for financial assistance/sponsorship payments to a Recipient.
As a general rule, the University of Illinois System is required to report financial assistance payments as taxable income on IRS Form 1099-MISC if the cumulative value paid to the Recipient over the calendar year equals or exceeds $600. See IRS Instructions for Form 1099-MISC for more information. Units must use account code 186550 for all financial assistance/sponsorship payments.
Funds will be paid via a check sent through U.S. Mail or direct deposit, based on how the Recipient elected to receive payment when completing the vendor setup process.
Procedure
To process a financial assistance/sponsorship payments to non-RSO recipients follow the procedures below.
$5000 or Less
- Unit determines eligibility of the financial assistance/sponsorship payment pursuant to this policy.
- Unit must obtain written assurances (e-mail is an acceptable form of a written assurance) from the Recipient that it will not use the funds to:
- carry on propaganda or otherwise attempt to influence legislation;
- influence the outcome of any public election;
- carry on, directly or indirectly, any voter registration drive; or,
- conduct illegal activity.
- Unit completes the Financial Assistance/Sponsorship Payment Form.
- The Unit Head must approve the payment by signing and certifying to the statements included in the Financial Assistance/Sponsorship Payment Form. Unit Head approval and signature cannot be delegated.
- A contract is not required.
- If the Recipient requires a contract, the contract should be routed to the Purchasing Division for execution using a Contract Approval Routing Form (“CARF”) (for all units that have not implemented iCS), or the Illinois Contract System (“iCS”) (for units that have implemented iCS) along with the signed Financial Assistance/Sponsorship Payment Form and any supporting documentation, for execution. If Recipient requires a contract, do not proceed to Step 7 until a contract has been fully executed by Purchasing.
- Unit submits payment request in Travel and Expense Management (“TEM”), using account code 186550. The unit must attach the completed Financial Assistance/Sponsorship Payment Form, including supporting documentation (as described on the Financial Assistance/Sponsorship Payment Form). If applicable, the unit must reference the executed contract number; however, the contract should not be attached to the payment request.
- University Payables (“UPAY”) reviews the payment request and the Financial Assistance/Sponsorship Payment Form before processing payment.
- All financial assistance/sponsorship payments are subject to post-audit review for compliance.
Over $5000
- If the payment qualifies as financial assistance/sponsorship payment pursuant to this Section of the OBFS Policies and Procedures, the unit completes the Financial Assistance/Sponsorship Payment Form.
- The Unit Head must approve the payment by signing and certifying the statements in the Financial Assistance/Sponsorship Payment Form. Unit Head approval and signature cannot be delegated.
- A contract is required. The unit must route the completed and signed Financial Assistance/Sponsorship Payment Form to the Purchasing Division using a CARF (for all units that have not implemented iCS), or iCS (for units that have implemented iCS).
- Purchasing will review the Financial Assistance/Sponsorship Payment Form to confirm eligibility of the financial assistance/sponsorship payment pursuant to this Section of the OBFS Policies and Procedures.
- Purchasing will work with the unit to obtain a Recipient-signed copy of a Financial Assistance Award Agreement.
- Purchasing will route the Financial Assistance Award Agreement for review and approval before obtaining authorized signature. Purchasing will provide the unit and Recipient with a copy of the fully executed contract.
- Unit submits payment request in TEM, using account code 186550. The unit must attach the completed Financial Assistance/Sponsorship Payment Form, including supporting documentation (as described on the Financial Assistance/Sponsorship Payment Form). Unit must reference the executed contract number; however, the contract should not be attached to the payment request.
- UPAY reviews the payment request before processing payment.
Forms Used in this Procedure
Financial Assistance/Sponsorship Payment Form
Contract Approval Routing Form
Additional Resources
Section 1 Initiation, Review, and Approval of University Contracts and Leases
Job Aid: How to Submit a TEM Expense Report for a Financial Assistance/Sponsorship Payment to a Non-University Recipient
Vendor Setup
Payments to University of Illinois Students
Managing Self-Supporting Funds Training Guide
iCS Resource Page
To leave feedback, please use the "Add Comment" link below. On the next screen, choose the "Sign in with my NetID" option and log in with your University credentials. Comment moderation is enabled. Your comment will not appear until approved. You may also submit a comment without posting to the feedback board by contacting obfspolicies@uillinois.edu.
