The new Procurement & Disbursing policies and procedures are effective as of today, March 31, 2015.

On March 2, 2015, draft versions of the Procurement & Disbursing policies were made available for previewing on the RCUH website, along with a Summary of RCUH Policy Changes. As a result of the preview period, revisions were made, and the substantive changes are listed below. Thank you for your valuable feedback.

1. Policy 2.002 Definitions:
   • A definition for “Third-Party Payment” was added.
2. Policy 2.006 Tax Treatment of Non-Service Financial Assistance for Individuals:
   • All payments made to UH students and post-doctoral fellows must be processed through UH;
   • All summary reports and forms provided to RCUH Accounting should be sent in hard copy or via the UH File Drop system due to security reasons;
   • The definition of “Program Expenses” was clarified under Section 1.b.ii. of SCHOLARSHIPS AND FELLOWSHIPS;
   • The new Non-Employee Expense Payment Form can be used to make non-service (e.g., scholarship/fellowship, etc.) expense payments (the form will be available for use beginning April 6, 2015);
   • The tax withholding and gross-up process discussed under Section 3.e.iii. of SCHOLARSHIPS AND FELLOWSHIPS was revised and clarified;
   • Sections 1. and 2.a. under OTHER INCOME were revised and clarified; and
   • The corresponding decision tree was revised in accordance with the above changes.
3. Policy 2.007 Tax Treatment of Compensation (Services, Rents, and Royalties):
   • All payments made to UH students and post-doctoral fellows must be processed through UH;
   • All summary reports and forms provided to RCUH Accounting should be sent in hard copy or via the UH File Drop system due to security reasons;
   • Section 3.b. under TYPES OF PAYMENTS was revised with regard to software purchases and royalties;
   • Under PROCURING SERVICES, RENTS, AND ROYALTIES, it is now required that the Scope of Service section of an Agreement for Services document the location where services will be performed;
   • Guidance regarding taxpayer identification numbers in Section 2.e. under GENERAL TAX TREATMENT OF PAYMENTS, was clarified;
   • The TAX TREATMENT OF THIRD-PARTY PAYMENTS (CASH ADVANCES) section was revised to clarify the requirements needed when using a cash advance; and
   • The corresponding decision tree was revised in accordance with the above changes.
4. Policy 2.008 Tax Treatment of Business Expenses (Service-Related)
   • All payments made to UH students and post-doctoral fellows must be processed through UH;
   • All references to the Business Travel Expense Form For Service Providers was changed to the new Non-Employee Expense Payment Form (the form will be available for use beginning April 6, 2015);
   • The payment procedure described in Section 4.b. under PAYMENT OF BUSINESS EXPENSES THROUGH A THIRD-PARTY VENDOR, was clarified;
   • An EXPENDITURE CODES FOR THIRD-PARTY PAYMENTS section was added; and
   • The corresponding decision tree was revised in accordance with the above changes.
5. Policy 2.011 Requirements When Paying U.S. Persons
   • All summary reports and forms provided to RCUH Accounting should be sent in hard copy or via the UH File Drop system due to security reasons.
6. Policy 2.012 Requirements When Paying Foreign Persons
   • The requirements for a B visa holder, described in Section 1. under IMMIGRATION REQUIREMENTS FOR FOREIGN NATIONALS (PERMANENT RESIDENT ALIENS, RESIDENT ALIENS, AND NONRESIDENT ALIENS), was revised and clarified; and
   • All summary reports and forms provided to RCUH Accounting should be sent in hard copy or via the UH File Drop system due to security reasons.
7. Policy 2.204 Services Agreements
   • Under Section 2.b.i., Scope of Service or Performance Requirements, it is now required that the scope include the location where the services will be performed.
8. Policy 2.301 Vendor Records
   • The explanation of the “taxpayer name” and “business name” under Elements of a Vendor Record, was clarified;
   • The process for creating a new vendor record was added under Section 3 of Create a New Vendor Record for U.S. Persons;
   • The descriptions of the IRS and UH/RCUH forms listed under Create a New Vendor Record for Foreign Persons, were revised; and
   • A reference to a new Sample Letter Requesting Vendor Form was added (the Sample Letter Requesting Vendor Form has been added to the Document Library).
9. Policy 2.402 Insurance Requirements (Vendors):
   • Under Section 1.c. Workers’ Compensation and Employers’ Liability Insurance, a notation that waivers of subrogation should be provided in favor of the RCUH whenever possible, was added; and
   • Under Section 2. Certificate of Insurance (General Requirements), “Waiver of Subrogation” and “Priority of Coverage” were added as required elements of a certificate of insurance.

We would also like to remind you of the following major changes from the old policies:

1. Threshold Increased for Purchases without Competition: The threshold for purchases that can be made without competition is raised from $2,500 to $3,000.
2. Purchases Requiring Only Verbal Quotations: The threshold for purchases requiring only verbal quotations is raised from less than $15,000 to less than $25,000.
3. Tax Clearance: A tax clearance is required for all Purchase Orders for the purchase of goods and/or services of $25,000 or more, upon both the Purchase Order issuance, and upon final payment on a Purchase Order.

If there are any questions regarding the changes, please contact Erin Yoda at (808) 956-3969 or [email protected].