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Legal Brief: Contract Review for External Funding AgreementsPosted Sept. 27, 2010
Previous legal briefs have dealt with a university employee's authority to sign a contract on behalf of the university. In those cases the contract should be reviewed by the Office of the General Counsel before a contract is signed.
Similar questions frequently arise as to whether an agreement for external funding (such as a grant) should be handled by the office of Sponsored Programs or by the department or division receiving the funding. As a general rule, a contract or any other type of agreement that involves external funds coming to Kent State - in exchange for service or research to be performed - should be reviewed and handled through the Sponsored Programs office. This should not be confused with contracts to procure services from an outside vendor (in which case the funds are paid out by the university) or donations where no services are expected.
The following contracts/grants must be routed to Sponsored Programs to ensure they are handled appropriately:
- Any contract or award that involves federal or state grant funds whether received directly from a government agency or through a third party (e.g., a subcontract/subaward). If the funds are federal in nature the university must track and report this for auditing purposes, regardless of the number of layers before reaching the university. Even if the agreement is titled as a consultant or personal services agreement, it should still come through Sponsored Programs if any university resources/facilities are being used.
- Any award or agreement with terms and conditions, reporting requirements and especially financial reporting. A restricted fund is established for each project so the award amount can be appropriately accounted for and reported. Typically any remaining funds are returned at the end of the project period, although some arrangements can be fixed-price.
- Projects with a potential for the creation of intellectual property, so related issues can be addressed up front in order to protect university interests.
- If the funding is to be included in the university's extramural funding report.
- Awards from foundations or organizations that are made payable directly to the individual faculty or staff member, but are awarded based on the person's role at the university, requires the use of university resources/facilities or personnel are hired.