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1 Contracts & Debt Collection October 2001 North Carolina State University David Drooz.

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Presentation on theme: "1 Contracts & Debt Collection October 2001 North Carolina State University David Drooz."— Presentation transcript:

1 1 Contracts & Debt Collection October 2001 North Carolina State University David Drooz

2 2 Contracts What is a contract? Who can sign contracts for NCSU? What is the NCSU contract procedure?

3 3 What is a contract AN AGREEMENT BETWEEN TWO OR MORE PARTIES TO DO OR NOT DO A PARTICULAR THING –Oral or written or electronic –Even if no money is involved

4 4 What is a contract –Requirements are: Clear terms Mutual agreement on the terms Mutual obligations Exchange of value Legally competent parties

5 5 What is a contract - hypos Donor makes unrestricted gift to NCSU Organization makes grant to NCSU, where NCSU must provide research report to them Prof gives stipend to TA for grading papers Staff downloads free Adobe software Dean hires caterer for campus event College gets use of Reynolds Col. for event

6 6 What is a contract - hypos College gets use of Civic Center for event NCSU lab performs materials test for outside company Dept head sends offer letter to applicant for tenure track position Prof seeks permission to use journal article in a coursepack

7 7 Who can enter a contract Authority to bind NCSU to contracts is limited Chancellor has full executive authority based on statute and the UNC Code –includes the authority to sign contracts for NCSU unless otherwise prohibited

8 8 Who can enter a contract Chancellor can delegate the power to sign Provost: academic cooperation agreements V.C. for Research: sponsored programs and tech transfer agreements V.C. for Finance & Business: everything else*

9 9 Who can enter a contract V.C. for F & B: almost everything else* * contracts over $250,000 are routed to Purchase & Contract in the NC Dept of Adminstration for approval. Once approved, NCSU Purchasing agent may sign a university purchase order.

10 10 Who can enter a contract V.C. for F & B: almost everything else* * some other transactions require special approvals: –real estate transactions –construction projects –hiring outside counsel –etc.

11 11 Who can enter a contract Sub-delegations: Director of Purchasing may sign contracts involving $35,000 or less (except real estate, sponsored programs, employment) Some other units have limited authority

12 12 Who can enter a contract What happens if someone without authority signs a contract? NCSU may ratify the contract, or NCSU may not accept the contract –signer may have personal liability to other party –signer may face disciplinary action at NCSU

13 13 Who can enter a contract Resource: NCSU Admin Regulation on authority to sign contracts is at Authority%20to%20Sign%20Contracts.html

14 14 What is the procedure? 1.For purchases: Check with NCSU Purchasing to see if the item or service is on state contract or requires competitive bidding. 2.Use a University form contract if you can. 3.Send the contract to Contract Management for review and signature.*

15 15 What is the procedure? *Contracts within the Finance & Business authority should be sent to Contract Management for review and signature –Jim Garrison at Applies to non-purchase contracts, too. Does not apply to bids accepted by NCSU P.O. Does not apply to small purchases*

16 16 What is the procedure? *Small purchases must meet all the following criteria: –non-written agreements (except for NCSU purchase order form) –for < $5,000 –for items not on State term contract Such agreements may be executed by any employee with departmental approval

17 17 What is the procedure? Contract Management will review and mark up contracts according to a Contract Checklist. The Checklist consists of contract terms that are unlawful or bad business policy –See

18 18 What is the procedure? Campus users may accept dangerous contract terms by signing Contract Advisory except terms prohibited by law. –G.S and sovereign immunity –G.S. 22B-3: if contract is entered into in NC, then any lawsuits must take place in NC –G.S : payments beyond current fiscal year must be expressly subject to legislative appropriations

19 19 What is the procedure? Special considerations Consulting contracts - academic vs. administrative Other personal services –independent contractor status –tax with-holding on some out-of-state contractors Licenses - especially online and software Bid requirements! (over $5000 and not on State contract)

20 20 Contracts Conclusion Use bid procedure or NCSU form contracts where appropriate Identify who is designated to review and sign each type of contract Understand why the Contract Checklist exists Make risk assessment on undesirable contract terms

21 21 Contracts Resources Call NCSU Purchasing: Purchasing website: –http://www.fis.ncsu.edu/materialsmgmt/purchasing/ Contract Management website: –http://www.fis.ncsu.edu/materialsmgmt/purchasing/con tract.htm

22 22 Contracts End of slides on contracts

23 23 Debt Collection State law requires NCSU to attempt to collect past due debts. –G.S (e)(3) and G.S Debts include claims, damages, fees, fines, forfeitures, loans, overpayments, and tuition as well as penalties, interest, and other costs authorized by law.

24 24 Debt Collection Types of debts Student loan defaults are outsourced - special procedure Other student debts - refer them to NCSU Cashier. –Collection methods include a hold on enrollment and transcripts

25 25 Debt Collection Types of debts Separated employee –deduct from last paycheck the value of state property the employee did not return –deduct from last paycheck the value of overdrawn vacation or sick leave

26 26 Debt Collection Types of debts For all other types of debts, use the following procedures

27 27 Debt Collection Invoice or demand letter Send an invoice (with a due date, typically 30 days after invoice) or a letter explaining whats owed, why, how payment may be made, and due date

28 28 Debt Collection Past Due Refer to Accounts Receivable if payment is not made in full by 30 days after its due –send complete documentation of debt Accounts Receivable will issue day past due letters

29 29 Debt Collection Past Due - remedy #1 When more than 90 days past due, Accounts Receivable will refer to a State-contracted collection agency or the Attorney Generals office

30 30 Debt Collection Past Due Interest - should be added to past due principal, based on floating rate from Dept of Revenue Late fee - up to 10% may be added Bad check fee - $25

31 31 Debt Collection Past Due - remedy #2 - for vendors who owe $ to NCSU May lose opportunity for future contracts Possible offset of amounts NCSU owes to the vendor by the amount of the debt owed to NCSU

32 32 Debt Collection Remedy #3 - Set Off Debt Collection Act Accounts Receivable notifies NC Dept of Revenue of debts over $50 and over 90 days past due Revenue may send debtors tax refund to NCSU Debtor has right to hearing to contest the debt

33 33 Debt Collection Remedy #4 - State Employees Debt Collection Act State agency that is owed debt sends letter to state agency that employs debtor –can be challenged via State grievance procedures Debtor must usually agree to garnishment of 10% or more of net disposable earnings, or lose job

34 34 Debt Collection Conclusion Promptly and properly send invoices or demand letters for money owed to your unit Identify all debts 30 days or more past due, and send them to Accounts Receivable


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