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Greetings! This University Policy Spotlight will focus on University Policy 5:1, Contract, Agreement, and Memorandum of Understanding Review and Approval. Please keep reading to learn more about this important policy.
Why is this policy in place?
This policy lays out the requirements for the execution, review, signatory authority, and payment tracking for all contracts, agreements, and memorandums of understanding (MOUs) by employees at the university.
What are the differences between a contract, agreement, and MOU?
The main difference is that a contract is a legally binding document that must contain certain elements to be enforceable. Agreements and MOUs, on the other hand, do not need to contain legally enforceable promises and are not always binding. These agreements are more of a mutual understanding. For simplification, the policy refers to all contracts, agreements, and MOUs collectively as Agreements.
What does this policy say?
The University President has the exclusive authority to approve Agreements on behalf of the university unless otherwise specifically excepted or delegated. Agreements must only be finally signed by those who have been delegated contract signature authority to do so in writing by the University President. If you do not have a signed letter from the President specifically delegating you this authority, then you are not an authorized signatory for the university and should not sign Agreements on behalf of the university. The only exception is if you are signing to acknowledge the signature of someone with delegated contract signature authority.
How do I know who has been delegated authority to sign Agreements on behalf of the university?
Finance and Budget maintains and makes this information available on InsideState.
I signed an Agreement on behalf of the university, but I do not have delegated signature authority. Is the Agreement still valid?
No. Agreements signed by individuals without delegated contract signature authority are void and may also subject the person who signed to liability or remedial action.
What is the process for initiating an Agreement?
Employees or Shared Services, as appropriate, should initiate the Agreement under their unit's delegated authority using the Contracts+ contract processing platform. Shared Services Center and departmental finance staff have received training on Contracts+ and can help process Agreements. The Office of General Counsel may, upon request, assist with Agreement drafting, revisions, or negotiation.
What is the order for signatures on an Agreement?
Once the Agreement has been approved by the delegated authority and the Office of General Counsel, if requested, the initiating unit will obtain signatures from the contractor first and then all required university departmental or unit signatures. The document will then be submitted to the authorized signatory at the university for final signature.
Who is responsible for ensuring the Agreement is completed?
The university employee who began the process is responsible for obtaining fully signed documents and sharing copies with the appropriate parties.
Who maintains the Agreement once it is fully signed and in place?
A fully executed original document should be maintained in the department or college required to maintain the document pursuant to the SDBOR Records Retention Manual. A copy, or if appropriate, the original document, must be provided to Finance and Budget for retention pursuant to the SDBOR Records Retention Manual.
Can I begin activities set forth in the Agreement before it has been fully signed?
No. Activities may not begin until any background reviews and approvals are successfully completed and a fully executed Agreement is in place.
For additional information, please refer to University Policy 5:1. Additionally, you may contact the Office of General Counsel with any questions.
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