MGIC - Non-PO Payments

Non-PO Payments

Purpose

The purpose of this policy is to describe the conditions and requirements that allow the Maryland Global Initiatives Corporation (MGIC) to make a payment without requiring a Purchase Order (PO) or other procurement agreement.

Background

MGIC may be used on a transactional basis to issue payments to foreign vendors, service providers, individual collaborators, and institutional partners when the receiving bank account is outside the United States (U.S.) and the purpose and benefits of using MGIC align with the University of Maryland, Baltimore (UMB)’s risk management and strategic global engagement goals.

MGIC supports a wide variety of use cases by Requesting Units, ranging from direct payments to non-employees (e.g. visiting lecturers, research participants) and institutional partners (e.g. foreign universities, implementing organizations) to payments for purchased goods and services from commercial vendors and contracted service providers.

In certain use cases, an MGIC payment may be authorized without requiring a Purchase Order or other valid binding agreement that is executed either by MGIC, or by UMB or an Affiliate Entity (hereafter collectively referred to as UMB/Affiliate), through their respective procurement policies and procedures. This is called a Non-PO payment.

MGIC generally aligns with UMB’s Non-PO standards, although certain financial thresholds and requirements have been modified in consideration of risk and operational feasibility in international contexts.

The International Operations (IO) division of UMB’s Administration and Finance department administers the MGIC mechanism and manages MGIC procurement and payment processes on behalf of Requesting Units.

Policy Statement

1. MGIC may approve and process a payment to a foreign vendor or other payee without requiring a corresponding PO or other procurement agreement issued by MGIC, or issued by UMB or an Affiliate Entity (hereafter called UMB/Affiliate), under the following conditions:
   • Non-Employee Payments: Direct payments to individuals who are not employees or students of UMB/Affiliate, for the following allowable purposes:
     • Reimbursement of approved travel and other business expenses
     • Royalties
     • Educational stipends and research fellowships
     • Voluntary payments, such as honoraria and research participant gratuities
   • Commercial Goods and Services under the MGIC Simplified Acquisition Threshold (less than $5,000 U.S. Dollars): Commercial goods and services are sold on the open commercial market, under a Standard Supplier Agreement or a “Click through Agreement.”  
     • Examples include but are not limited to lodging, airfare, conference fees, memberships, service subscriptions, transportation rental, and various other business services.
     • See MGIC Procurement Policy for more information about competitive bidding thresholds and Non-PO purchase conditions.
   • Emergency and Critical Incident Response Payments: The Chair of UMB’s Crisis Management Advisory Group (CMAG) and/or the Chair of the MGIC Board of Directors may declare an emergency or critical incident outside the U.S. and require MGIC to send funds to vendors or service providers supporting the incident. These payments may be authorized on an expedited basis as determined by the MGIC President, following the declaration by the CMAG Chair or MGIC Chair, with documentation requirements fulfilled following the payment. See USM Policy VIII-21.00 Policy on Crisis Management for more information about CMAG, and see also MGIC Policy on Safety & Security.
2. Approval authority for an MGIC Non-PO payment is the same as for an MGIC payment of goods and services that are procured by MGIC or UMB/Affiliate. (See MGIC policies on Signature Authorities and Payment of Expenses and Advances). In summary, these policies require that:
   • All signatures, approvals, and authorization actions must be executed and recorded using MGIC-approved systems, platforms, and processes.
   • Any payment or other legally binding commitment made through MGIC on behalf of a Requesting Unit of UMB or an Affiliate Entity, must be approved and executed by UMB personnel vested with the appropriate level of authority, as defined in MGIC’s Corporate Governance policy and any prevailing Delegation of Signatory Approval and Execution Authority, in accordance with a current MGIC Table of Authorities. 
   • No payment will be made without an MGIC Payment Voucher Form (PVF), produced and cleared by the IO finance team and approved by the Assistant Vice President (AVP) - IO in their capacity as MGIC Vice President – Administration and Finance. Each PVF will be reviewed and approved by personnel with distinct roles and responsibilities to ensure appropriate segregation of duties, following the MGIC Table of Authorities. 
3. The required documentation for a Non-PO payment through MGIC is the same as is needed to pay for procured goods or services, other than the need for an executed procurement instrument. (See MGIC policy on Payment of Expenses and Advances):
   • A valid vendor invoice for goods and services, or documentation proving the business purpose of the expense for non-employee payments (e.g. invitation or award letter, approved travel request, honorarium or royalty offer, etc.)
   • Payee Bank Information Form
   • Payment Authorization Form
   • S. Internal Revenue Service taxpayer identification form or MGIC Foreign Source Statement, as applicable
   • A negative report from MGIC’s commercial sanctions screening software
   • Other documentation as may be requested by IO for specific transactions

Scope

This policy applies to all MGIC employees, UMB personnel, and affiliates who request, process, or approve payments to foreign entities through MGIC for the above purposes.

Responsibilities

1. IO International Finance and Procurement staff: Fully comply with MGIC policies and procedures relevant to this type of payment. Assess benefits and costs of conducting a procurement process in lieu of a Non-PO under the Simplified Acquisition Threshold when risk or market conditions warrant consideration, and make justified recommendations to Requesting Units and the AVP - IO (in the capacity of MGIC VP – Policy & Administration). Develop, implement, and follow appropriate standard operating procedures to ensure policy compliance, function efficiently, minimize risk, and maintain appropriate segregation of duties and standards of ethical conduct. 
2. AVP-IO (in the capacity of MGIC VP – Policy & Administration): Oversee IO compliance with this and related policies. Determine the need for procurement below the Simplified Acquisition Threshold irrespective of this policy, based on the cost-benefit analysis and recommendation of IO procurement staff. Approve or deny all complete and validated Non-PO payment requests and initiate and approve payments in keeping with MGIC finance policies.
3. MGIC President: Approve emergency and critical incident response Non-PO payments, in consultation with other UMB leadership and coordination with AVP-IO.
4. MGIC Board of Directors and UMB Crisis Management Advisory Group (CMAG): Declare emergencies or critical incidents as authorization for emergency Non-PO payments through MGIC when required. The Chair of the CMAG is authorized per USM policy to declare a crisis and activate the CMAG, while the Chair of the MGIC Board shall take time-sensitive decisions on behalf of the full Board for expediency.
5. Requesting Units: Follow MGIC policies and procedures. Complete required steps, forms, and documents timely and accurately to reduce risk and maintain positive institutional collaboration with vendors and service providers. Collaborate with IO to minimize and appropriately balance risk to recipients, MGIC, and UMB/Affiliate.

Procedures

See MGIC Standard Operating Procedures.

Documentation Requirements

• Supporting documentation as described in MGIC Payment of Expenses and Advances policy
• Payee Bank Information Form
• Payment Authorization Form
• Payment Voucher Form
• S. Internal Revenue Service taxpayer identification form or MGIC Foreign Source Statement

References

• MGIC Policy on Corporate Governance
• MGIC Policy on Payment of Expenses and Advances
• MGIC Policy on Procurement
• MGIC Policy on Safety & Security
• MGIC Policy on Signature Authority
• MGIC Table of Authorities
• USM Policy VIII-21.00 Policy on Crisis Management