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Contracts & Debt Collection 
 
 

October 2001 North Carolina State University David Drooz  

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Contracts 

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

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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  

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What is a contract 

Requirements are:  
Clear terms Mutual agreement on the terms Mutual obligations Exchange of value Legally competent parties  

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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  

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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  

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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  

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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*  

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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.  

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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.  

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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  

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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  

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Who can enter a contract 

Resource:  
NCSU Admin Regulation on authority to sign contracts is at http://www.fis.ncsu.edu/ncsulegal/areg-Authority%20to%20Sign%20Contracts.html  

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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.*  

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What is the procedure? 

*Contracts within the Finance & Business authority should be sent to Contract Management for review and signature Jim Garrison at 515-6134  
Applies to non-purchase contracts, too. Does not apply to bids accepted by NCSU P.O. Does not apply to small purchases*  

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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  

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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 http://www.fis.ncsu.edu/ncsulegal/checklis.htm  

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What is the procedure? 

Campus users may accept dangerous contract terms by signing Contract Advisory  
except terms prohibited by law. G.S. 143-291 and sovereign immunity G.S. 22B-3:  if contract is entered into in NC, then any lawsuits must take place in NC G.S. 143-34.2:  payments beyond current fiscal year must be expressly subject to legislative appropriations  

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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)  

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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  

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Contracts 

Resources Call NCSU Purchasing:   515-2171  
Purchasing website: http://www.fis.ncsu.edu/materialsmgmt/purchasing/ Contract Management website: http://www.fis.ncsu.edu/materialsmgmt/purchasing/contract.htm  

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Contracts 

End of slides on contracts  

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Debt Collection 

State law requires NCSU to attempt to collect past due debts. G.S. 147-86.11(e)(3)  and G.S. 147-86.21  
Debts include 00laims, damages, fees, fines, forfeitures, loans, overpayments, and tuition as well as penalties, interest, and other costs authorized by law.00/font>  

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Debt Collection 

Types of debts  
Student loan defaults are outsourced - special procedure  
Other student debts - refer them to NCSU Cashier. Collection methods include a 00old00on enrollment and transcripts  

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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  

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Debt Collection 

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

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Debt Collection 

Invoice or demand letter  
Send an invoice (with a due date, typically 30 days after invoice)

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