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].

As previously announced on October 29, 2014, RCUH has been in the process of updating its Procurement & Disbursing policies. The policies are now available for viewing under 2.00 Procurement & Disbursing NEW Policies Effective 3/31/15. Note that the effective date of the policies has been changed to March 31, 2015, due to our postponement of the preview date.

In addition to what was previously announced on October 29, 2014, we would like to call your attention to Policies 2.005 through 2.012, which provide additional guidance regarding the tax treatment of payments. We will be holding training sessions on Policies 2.005 through 2.012 in the near future.

What was formerly known as the Attachments Index, located at the bottom of the old (current) policies, has been renamed the Document Library, and is located at the top of the new policies. For more details regarding the policy changes, refer to the Summary of RCUH Policy Changes.

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

New Fields

• UH and RCUH Employee Number — New vendor records for UH and RCUH employees will require that users enter the employee’s UH or RCUH employee identification number as appropriate. If a user tries to create a new record using an employee number already entered on an existing RCUH record, an error message will be returned.
• User’s email address — The user who creates a vendor record will be required to enter his/her email address.

New Codes in Status (ST) Column

• Instead of a “●” symbol, a status code will be displayed to describe the vendor record type (EM, G, A) or the IRS or UH form (W9, WH, W8, WE, 60) on file at RCUH. In the purchasing menu, the code appears next to the vendor name. In the payments menu, the code appears after the zipcode field. U.S. citizens and permanent resident aliens may have a W-9 or a WH-1 on fil
• If the field is blank and the vendor has a U.S. address, the record was likely created prior to October 2013 when the W-9 became a requirement. Request the vendor’s W-9 if your payment will be IRS-reportable.
• If RCUH has a form on file for a foreign entity, users do not have to request another Form W-8 or Form 60 from the vendor, unless paying U.S. source income to a foreign vendor who only has a RCUH Form 60 on file. All foreign vendor payments must still be submitted to the RCUH Disbursing Office.

Status	U.S. vendors	Form
W9	U.S. citizen, sole proprietor/individual, corporation, partnership, limited liability company, permanent resident alien	IRS W-9 Form
WH	U.S. citizen, permanent resident alien	UH WH-1
EM	RCUH or UH regular employee	No ‘W’ form required
G	U.S. Federal, State or County governmental entity	No ‘W’ form required
Status	Foreign vendors	Form
A	Nonresident alien (NRA) individual	No current form on file; new form required for each payment due to changes in information for each visit
W8	Foreign person various	New W-8 forms (BEN, ECI, EXP or IMY); Old IRS Form W-8BEN
WE	Foreign entity	New IRS Form W-8BEN-E
60	Foreign entity or NRA paid for foreign source income	RCUH Form 60

General Improvements

• Text changes were made to make the instructions more understandable and easier to follow. A Form W-9 is not required for Federal, State and County governmental entities and is not required for regular RCUH and UH employees.

The IRS introduced a December 2014 version of its Form W-9, http://www.irs.gov/pub/irs-pdf/fw9.pdf.

Please request that your vendors submit their information on the most recent Form W-9 version  (see attached explanation).