Topics
Direct Charges & Reimbursements
Services & Contracting Out
Sole Source
Unauthorized Purchases
A financial transaction used to reimburse employees for program expenses, and to make direct payment for registration fees, insurance premiums, utilities, fee refunds, and other miscellaneous one-time payment items that are not part of the purchasing or travel programs.
Summary of Policy
- Reimbursement to University and non-University employees for out of pocket expenses.
- Refund workshop or training fees when a participant was unable to attend.
- Payment of insurance premiums.
- Payment of registration fees.
- Utility payments (i.e. gas, electric, garbage, telephone).
- Payment of memberships - see Memberships section of this Guide
Procedures for Direct Charges
- Complete the Direct Charge form identifying vendor, purpose, and account to be charged, and obtain County Director signature.
- Original, itemized receipts must be attached for all reimbursements.
- For non-University employee reimbursements, you must include the individual's Social Security number, home address, and telephone number.
- Reimbursement for food purchases utilizing the Direct Charge process is only for food that is purchased for demonstration purposes. Use a stamp or write on the receipt that the food was "For Demonstration Purposes Only."
- For fee refunds, attach a copy of the Cash Receipt or Log with their original payment highlighted. If a refund is part of an agreement, attach a copy of the agreement specifying refund conditions (i.e. Master Gardener enrollment fees).
- Completed registration forms that clearly identify cost must be attached for payment.
- Insurance premium forms must be attached that identify terms of coverage, group name, number covered, rate per person and coverage dates.
- Original utility/telephone company invoices must be attached for payment.
- Forward the Direct Charge form and supporting documentation to the Regional Office for processing.
Tips
- When paying registration fees as a Direct Charge, DO NOT also list them on the travel voucher.
Services & Contracting Out
Independent Contractors
Prevailing Wage
Resources
Independent Contractors
California Law states that a worker may be considered an independent contractor if:
(1) the worker has the right to control the performance of services,
(2) the result of the work is the primary factor bargained for, and not the means by which it is accomplished,
(3) the worker has an independently established business, and
(4) the worker's independent contractor status is not a subterfuge to avoid employee status.
The law further states that independent contractor status is evidenced if the worker:
(1) has a substantial investment in the business other than personal services,
(2) purports to be in business for himself or herself,
(3) receives compensation by project rather than by time,
(4) has control over the time and place the work is performed,
(5) supplies the tools used in the work,
(6) hires his or her own employees,
(7) performs work that is not ordinarily in the course of the employer's work,
(8) performs work that requires a particular skill,
(9) holds a business license,
(10) intends to establish an independent contractor relationship, and
(11) agrees that the relationship is not terminable at will.
The University does not have to withhold or pay any taxes on payments to independent contractors (IRS Treasury Regulation 31.3401(c)-1(b)).
Departments must use the Independent Contractor Pre-Hire worksheet when evaluating a candidate as an independent contractor.
If the W9 has Individual/Sole Proprietor or Single-member LLC marked, then an Independent Contractor Form is required. An Independent Contractor can have a FEIN# or SSN#.
Prevailing Wage
Prevailing wage typically refers to the rate of pay that contractors and vendors must offer their employees when doing business with a government agency. (Typical of Union represented Construction or Construction Related Trades)
Prevailing Wage - Construction and Related Work
(Labor Code 1720(a)(1))
The following are examples of work that are defined as public works when paid in whole/in part with public (state) funds and performed by an outside vendor/not UC employees.
- Construction (includes pre-construction and post construction)
- Alteration
- Demolition
- Installation
- Repair
- Maintenance (Labor Code section 1771, 8 CCR 16000)
Public Works Example Categories: Maintenance
- Tree Trimming
- Landscaping Maintenance
- Equipment Repairs (Pumps, Motors, Belts, etc.)
- Elevator Maintenance
- Roofing/Patch Work
- Drop Ceiling Repair
- Carpet Replacement
- Installation of Modular Furniture
- Painting/Touch-Up Painting
When Does Prevailing Wage Apply?
- Prevailing Wage includes all services identified as Public Works to be performed for the University at one or more UC Locations.
- Applicable when the project costs are more than $1,000 (combined total of goods AND services) and involve new construction, alteration, demolition, installation, repair, and (For Maintenance orders over $15k and New Construction/Repairs over $25K a DIR PWC Project number must be created and clearly identified on the Contract/PO) (DIR Project Numbers are created by the UCD Buyer).
- For Federally funded construction, Federal law also applies (strictest policy applies). Davis-Bacon applies. Additional requirements and guideline are under development.
- If there are any public funds in a public works project, the entire project is subject to prevailing wage requirements.
- If a department is buying a piece of equipment that is being installed and that installation involves being electrically hard wired, plumed for water or gas, or seismically bolted to the floor or wall, then it becomes a Prevailing Wage
Campus Departments: Process for Ensuring Prevailing Wage Compliance
In order to ensure compliance and facilitate timely processing of orders, if a Department believes that an Aggie Enterprise Requisition being submitted to Procurement & Contracting Services involves Prevailing Wage, they should:
- Ensure that Supplier is Registered with the DIR as a Public Works Contractor (PWC) or is aware of the requirement to register and pay prevailing wage payment requirements (As required by total Cost of PO, If over $15K on Maintenance or $25K on New Construction or Repair the vendor MUST be registered with the DIR).
- Ensure the Supplier has current Certificate of Insurance (COI) on file. (Note: Confirm that The Regents of the University of California are listed as additionally insured).
- Make sure that the Labor Rate on the quote being submitted states that it is at the Prevailing Wage Rate or get written confirmation from the vendor that Labor is priced at Prevailing Wage.
- Give Vendor’s current California Contractor’s License # and DIR PWC # (if available) in the Aggie Enterprise document notes section.
- Make sure that the “Ship To” address on the Aggie Enterprise document represents the location where the work is actually taking place or add a note to the Aggie Enterprise document indicating the specific physical address. Prevailing Wage rate is determined by the Address/County in which the work takes place, and the proper taxes are calculated off the zip code. (95616-5270 Davis Main Campus)
Additional Information
- Cannot be paid on P-Card- needs to be on a Purchase Order (PO) so that the project can be tracked per the State requirements.
- Quote should list labor/service charges and material out separately (itemized). - When processing a purchasing request subject to prevailing wage, be sure to split out the labor/service from the materials component of your Requisition or Purchase Agreement document.
- Required because the UC is a publicly-funded entity, and all qualified projects are considered Public Works and fall under the State mandated Department of Industrial Relations requirements of Prevailing Wage.
- Additional information may be obtained at:
As an example: If a department is buying a piece of equipment that is being installed and that installation involves being electrically hard wired, plumbed for water or gas, or seismically bolted to the floor or wall, then it becomes a Prevailing Wage job.
*Construction, Maintenance, and Repair have the potential to be prevailing wage.
Job Classification Examples
The following are a list of job classifications (as listed on the DIR Project Registration Web Site) that fall under Prevailing Wage. The list is not comprehensive:
- Asbestos
- Boilermaker
- Bricklayer
- Carpenter
- Carpet/linoleum
- Cement mason
- Drywall finisher
- Drywall/lather
- Electricians
- Elevator mechanic
- Glaziers
- Iron worker
- Laborer
- Operating engineer
- Painter
- Pile driver
- Pipe trade workers
- Plasterer
- Roofer
- Sheet metal
- Sound/Comm
- Surveyor
- Teamster
- Tile worker
If you still have questions regarding whether or not work is considered Prevailing Wage, contact the UC ANR Business Operations Center: bocsupport@ucanr.edu.
Resources
Services Explained (What is a service?)
Contracting Out Services Form
Regents Policy 5402: Policy Generally Prohibiting Contracting for Services
Sole Source Purchases
Sole Source is used when:
- Only One Supplier can fulfill the request.
- $10K or higher transaction total for federal funded accounts, AND an existing Purchase Agreement is not being used, OR the purchase is not being made in Aggie Enterprise Punchout
Must have 3 informal competitive quotes (attach copies to Sole Source Document)
- $100K or higher transaction total for non-federal funded accounts, AND an existing Purchase Agreement is not being used, OR the purchase is not being made in Aggie Enterprise Punchout.
Sole Source Forms:
The Sole Source Justification section of the Source Selection & Price Reasonableness Justification and Approval Form must be completed.
The Individual Disclosure Statement must be completed. Each person involved in the recommendation for Sole Sourcing must complete the disclosure form.
The sole source justification portion of the Source Selection & Price Reasonableness Justification and Approval Form must include:
- A clear statement of the unique performance factors of the product or supplier specified.
- Why those unique factors are required.
- Forms must be signed by a chair, director or Principal Investigator, and the title of that person must be indicated on the form. Failure to do this may result in processing delays.
Justifications for Sole Source Approvals:
- The requested product is an integral repair part or accessory compatible with existing equipment.
- The requested product is essential in maintaining research continuity or to remain in compliance with established university standards.
- Only a particular brand or "make" is compatible with existing equipment or inventory.
- Only one source is known for a specialized item of equipment or material.
- Only one contractor can provide the required service.
- If the vendor was specifically part of an award, list award number and information.
Unauthorized Purchases
All purchases need to comply with federal and state law, university policy, and prudent business and financial practices. There are processes and approvals established to ensure appropriate purchases are made.
Unauthorized purchases are commitments made on behalf of the University of California (UC) without following these processes and obtaining the appropriate approvals.
Confirming Orders
Confirming orders provide exceptional approval for an unauthorized purchase.
There are multiple reviewers on a confirming order, including the department head, BOC and Controller’s Office. (A purchaser cannot also be a reviewer for their confirming order. It will need to be routed to their Supervisor.)
The review process will include documentation to support the purchase, as well as a demonstrated business need and steps taken to avoid future unauthorized purchases. These should be infrequent, and submitted only under very extenuating circumstances or emergency situations.
A confirming order is needed to process payment for an unauthorized purchase.
Note: if disapproved, the individual who made the unauthorized purchase will be responsible for returning the goods or for personally paying for the charges.
How to avoid needing a confirming order
Acquisition of products or services on behalf of the university requires appropriate review and approval(s) BEFORE the purchase is made. The appropriate approvals are generally required, at a minimum, from the fiscal officer(s) assigned to the account(s) that are to be charged for the purchase.
- First, check the Aggie Enterprise Punchout Catalog for all office supply purchases.
- If the item you need is not available through Aggie Enterprise and it costs $4999 or less, use your Procurement Card (P-Card).
- Email your BOC Business Partner Team for advice on or assistance with your purchase.
Examples of unauthorized purchases
- Employee purchasing a new computer for their office on a personal credit card
- Supplier doing repair work for a department without an established Purchase Order
- Volunteer reimbursements > $499
- Unauthorized vendors
How to obtain a confirming order
- Go to WFA and select Unauthorized Purchase in the Business Operations Center menu.
- County Office Routing:
- Purchaser
- Office Manager (Submitter in WFA)
- County Director (Director approver)
- BOC Director (Financial approver)
- Controller (Final approval)
Where can I go for more information?
Please review Business Operations Center presentation slides on confirming orders.
Visit the UC Davis Supply Chain Management Website's section on Confirming Orders here: https://supplychain.ucdavis.edu/procure-contract/guidelines/unauthorized-purchase