Honorariums

When an honorarium is paid, the payment is in lieu of any travel expenses and fees (account code 70500). If the guest is to receive payment at the completion of his or her visit to Auburn University, you will need to submit the travel voucher to Procurement and Payment Services in sufficient time for a check to be prepared.

The travel voucher should reflect:

• The guest's name and title or position
• The guest's vendor number
• The date and purpose of the visit
• The amount of the honorarium
• Mailing address
• Copies of agreements or correspondence with the visitor which confirm this information.
• Appropriate dean's signature

Send these materials to Procurement and Payment Services. At the end of the calendar year, Procurement and Payment Services will provide the visitor with an IRS Form 1099 (Other Income Statement).

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Independent Contractors
(Payment of Non-University Personnel for Professional Services)

A Professional Services Contract (PSC) - BO 55-20 and is used when the services of firms or individuals outside the University are required to undertake a project requiring that individual's or organization's expertise. The contractor is responsible for accomplishing the work called for in the contract and will not be supervised or controlled by the University.

Because departments frequently have trouble determining when it is appropriate to obtain services through a PSC rather than through a purchase requisition (PR)/purchase order (PO), we've developed a document providing guidance. Read more on PO vs PSC vs Subcontract.

Because independent contractors are not employees of the University, neither they nor their work is covered by AU's insurance. Some types of service require specific types and levels of insurance. Those service providers must provide written proof of that insurance to us. Please contact Risk Management & Insurance at 844-4870 for additional guidance on this issue.

A Professional Services Contract may not be used with anyone who is a current University employee or with anyone who will become an AU employee in the foreseeable future. In most cases retired/former employees will also not meet the IRS regulations to qualify as an independent contractor with AU.

This procedure should not bypass University employment policies or provide a service that is available through existing University resources. Any payment to a University employee for personal services must be made through the University payroll system.

IRS standards strictly limit who may be classified as an independent contractor. Independent Contractor (IC) Form - IC 99-01 can assist you in determining whether a person providing services should be classified as an employee or an independent contractor. Read more about IRS Guidelines for Independent Contractors/Employees (excerpted from IRS Publication 15-A). Effective May 1, 2007, a Form IC must be completed and submitted for PPS approval for only those Independent Contractors who are individuals or sole proprietors. The Form IC is no longer required for companies providing services to AU.

Professional Services < $600
Effective May 1, 2007, departments engaging an independent contractor where the yearly aggregate of payments to that contractor will be < $600 are no longer required to process a PSC for that engagement. In those cases, the form IC must still be completed and attached to all payment vouchers for those services.

Upon review of the Form IC, if PPS determines that the relationship does not comply with IRS guidelines regarding independent contractor vs employee status, the voucher will be returned to the department for payment through the payroll system.

For more information regarding the applicable IRS regulations, please check the link located within the Independent Contractor section of the FPPM in the Travel Policy or Spending Policy section. Questions regarding Independent Contractor status should be routed to PPS.

Professional Services > $600
A Professional Services Contract (PSC) - BO 55-20 and Independent Contractor (IC) Form - IC 99-01 (individuals only) must be completed and approved by Procurement and Payment Services prior to the beginning of the service and will be used to support the payment after the services are completed. Purchase orders are not used. Both the Professional Services Contract and all payments must reflect the information as provided during the vendor registration. A single PSC may be submitted to cover recurring small dollar PSC related payments during the course of one fiscal year.

In cases where the intended cost of the service is projected to exceed $7500 in one fiscal year, a more detailed/comprehensive contract may be appropriate. If the contract exceeds $10,000, Vice Presidential approval is required.

The contract must include the name of the company or individual; the AU Vendor Number or SSN/TIN; the mailing address; the amount of the fee; the nature of the services; a notation of applicable expenses; and the date of services. Payee information on the voucher and professional services contract must be consistent with that on vendor record.

PSC Payments
Travel expenses and professional service fees should be submitted by the contractor on a signed, itemized statement for preparation of a Travel Expense Voucher - BO 55-05 by the department. Reference the Procurement and Payment Services assigned PSC number on each PSC payment voucher.

If a one-time payment is involved, submit the original Professional Services Contract with the voucher. Otherwise, submit a copy of the Professional Services Contract and attach the original contract upon final payment.

When a voucher is used only to pay for professional services, it doesn't require the contractor's signature.

A copy of the Professional Services Contract, (if applicable) any relevant correspondence, with a signed statement of travel expenses and Form IC must be attached to the reimbursement voucher. Travel expenses should be itemized with appropriate receipts attached (same receipt requirements as for employee travel).

Authorized transportation expenses will be reimbursed following standard University guidelines. Subsistence expenses will be reimbursed on the basis of actual expenses.

At the discretion of the Department Head, department may elect to have lodging charges only incurred at the Hotel at Auburn University paid by department using the AU Purchasing Card. This exception applies to only those lodging charges incurred at the AU owned Hotel and only if paid via the Purchasing Card.

Vendor Disclosure Statement
In compliance with Alabama State Law Act 2001-955, Section 4(a)(1), (2) and (3), Auburn University requires the disclosure of certain information regarding vendors and their relationships with AU.

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