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  • DRAFT: Financial Assistance and Sponsorship Payments to Non-University Entities

Comments

laa@illinois.edu Feb 27, 2017 1:35 pm

The only thing I would like to see clarified is whether the financial assistance recipient needs to have a Banner ID or can they be paid as a ‘temp vendor’.  From what I read, it seems like the recipient needs to have a Banner ID, but I think it would be beneficial to have that spelled out clearly, some may need that.

Reply to laa@illinois.edu at 1:35 pm
aaronr1@uic.edu Feb 17, 2017 2:08 pm

For Step 3 of the Over $5,000 processing instructions, can the financial assistance template be published to units on the OBFS Contract Forms website the way that the Procurement of Services template is? At Chicago, when handling the POS template, units prefill the template and route it with the CARF or prefill the template directly in iCS? Routing a CARF without an actual contract may cause confusion.

Reply to aaronr1@uic.edu at 2:08 pm
aaronr1@uic.edu Feb 17, 2017 1:55 pm

When this is ultimately formatted for publication, can the following sentence be bold/underlined/highlighted as much as possible "Units must use account code 186550 for all financial assistance/sponsorship payments."?

Reply to aaronr1@uic.edu at 1:55 pm
aaronr1@uic.edu Feb 17, 2017 1:54 pm

Financial Assistance/Sponsorship Payment for a Recipient to Purchase Goods or Services

What is the line that tips identification of intent from allowable to unallowable? The examples below seem to be rooted in the level of detail, e.g. okay to say “this money is to buy lanyards”, but you can’t say “this money is to buy 30 green lanyards for the event on 5/13”. Is that a clear enough distinction? Is University Counsel comfortable with the allowable examples? The language may need to be clarified. If a Unit says “This money is to buy lanyards”, isn’t the essence of that that they’re telling the unit what the money must be used for, which is not allowed?

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’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’s missions.

To maintain the autonomy of the Recipient and mitigate risk to the University, 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 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 cannot make a financial assistance/sponsorship payment directly to a catering company to cater a Recipient’s annual meeting.

Reply to aaronr1@uic.edu at 1:54 pm
aaronr1@uic.edu Feb 17, 2017 1:50 pm

Should the below heading be updated to reflect that the content is primarily about the ability to identify intent?

Financial Assistance/Sponsorship Payment for a Recipient to Purchase Goods or Services

nce/sponsorship payment directly to a catering company to cater a Recipient’s annual meeting.

Reply to aaronr1@uic.edu at 1:50 pm
aaronr1@uic.edu Feb 17, 2017 1:45 pm

In the below two examples, can we make it clearer what specific factors make one situation allowable and the other not allowable? In the unallowable example, are we presuming that the conference does NOT promote or advance one or more of the University’s missions? Or is the only distinguishing factor that the money in the second example is only going to pay for registrations/both/dues? What would type the second example into allowable territory? If the Unit providing the money said that the money is for registrations but also that the money is to generally support the cause of the conference, and such cause supports one or more of the University’s missions? Also, where does the idea that merely paying for conference registrations/booth/dues fall under the earlier definition of what is a purchase that appears under allowability? Is another example needed on that list?

 

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’s missions.  It is acceptable for the University to obtain consideration such as advertising in the annual conference’s brochure as a sponsor.  The University 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; provide the University with a booth at a Recipient’s conference; or pay for an individual’s dues to an organization.  These activities would be considered a purchase.

Reply to aaronr1@uic.edu at 1:45 pm
aaronr1@uic.edu Feb 17, 2017 1:34 pm

Can the content below about consideration be deleted, and instead, in the earlier content under allowability, add a sentence before “A unit cannot use a financial assistance/sponsorship payment if…” that reads “A unit may make a financial assistance/sponsorship payment to a Recipient with or without consideration.” Then at the end of the allowability section, paste the examples that currently appear under the consideration content. The two lead-in sentences that are currently under the consideration section before the examples merely restate content that was already stated (e.g. the need to promote or advance one or more of the University’s missions and not to be a purchase”.

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’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’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’s missions.  It is acceptable for the University to obtain consideration such as advertising in the annual conference’s brochure as a sponsor.  The University 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; provide the University with a booth at a Recipient’s conference; or pay for an individual’s dues to an organization.  These activities would be considered a purchase.

Reply to aaronr1@uic.edu at 1:34 pm
vpierce4@uic.edu Feb 17, 2017 11:37 am

“As a general rule, the University 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. As a general rule, the University 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.”

For some groups this will generate tax liability. How will we support through this process?

 

“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 University purchase include payment of funds to: obtain goods that will be owned by the University; obtain goods which the University in turn donates to the Recipient; obtain goods using a University 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.”

This does speak to several of our meetings and provides some strong direction.

The last sentence creates some challenges for competition groups that could receive funding but then compete under the university name.

 

“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’s missions.”

I think there should be some direction as to who defines that link because as we discussed almost anything can be considered “to promote or advance.” Will that be up to unit heads discretion or will that be reviewed by someone before it goes in TEM?

 

“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 be in compliance with the donor’s intent, where applicable.  State appropriated funds cannot be used for financial assistance/sponsorship payments to a Recipient.”

For our purposes are we excluding student fees in any way shape or purpose?

Can we provide (because we will be asked) how to start the self supporting funds?

 

Without having the FA/SP Form in front of me this looks good. I think there are some gaps to some of the particulars we discussed such as insurance for a group but it looks good so far.

Reply to vpierce4@uic.edu at 11:37 am