90-8  Obsolete

State of Indiana Contracts
September 24, 1990

The State of Indiana has traditionally been slow in returning signed contracts to the University due to the number of government signatures required.  In order to initiate projects in a timely manner, University departments have underwritten projects until the signed contract was returned to the University.  This procedure has presented a cash flow problem, but the risk assumed by the University has always been minimal.

More recently, there have been concerns in the State Budget Agency and the Attorney General's Office that contracts are arriving in their offices several months after the contract start date, and in some cases they have refused to sign the agreement until the beginning date is changed to a more current one.

Also, with the Governor's recently initiated spending controls, we understand that contracts will need to be justified as being essential before they are approved.  A committee has been established within the State government for this review which will be in addition to the regular signature review.  Contracts viewed as non-essential by the State may not be approved.

If your department or school has been underwriting State projects, please assess these additional risks which have surfaced recently.  Renewals of existing projects will receive the same review as new projects.