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Week of April 29, 2013

U-M formalizing ties with affiliated external entities

U-M is taking steps to formalize its long-standing relationships with university-affiliated external entities that use U-M for services ranging from financial operations to staffing.

Under provisions of Standard Practice Guide 601.32, which took effect March 29, a written contract is necessary to spell out the circumstances under which a university-affiliated entity uses any U-M central administrative or business service as a replacement for its own such services.

Currently, the university provides these services to a number of university-affiliated entities, such as the Alumni Association, the University Musical Society, the Merit Network and many smaller entities. Under long-standing agreements, the university provides such services as staffing, procurement assistance, insurance or other administrative functions. Typically, the university is reimbursed for those services.

“The new SPG will bring more clarity to these arrangements and allow for better tracking by putting consistent processes in place, even though each of these arrangements is unique,” explains Timothy P. Slottow, executive vice president and chief financial officer.

Slottow said the development of the SPG was the logical next step in the follow-up from a report by the Office of University Audits that recommended establishing a central process for creating and managing contracts that involve university-provided administrative services. Additionally, a new state law requires specific language be included in agreements that include university-provided employees.

“The important next step now is to meet with the leaders of each university-affiliated entity to review the new process and formalize the agreements as we move ahead,” says Thomas Blessing, associate general counsel.

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