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Loyola University Chicago

Office of Research Services

Paying Individuals from Externally Funded Projects

There are four categories of individuals eligible for payments from externally funded projects: Loyola faculty, Loyola staff, independent contractors, and human subjects.  Please click on one of the following subheads for additional details:

Faculty employing staff members who will be paid on a grant/contract, whether part-time or full-time, must follow the policies and procedures of Human Resources. Hiring for a new position, replacement position, or changing FTE on any position (grant or non-grant funded), requires putting the position through the applicant tracking system (accessible only by the hiring administrator; workflow includes approval of the department head/chair, VP/Dean, Provost and President, including Compensation and SPA/Budgeting Offices).  For those units reporting to the Provost, prior approval of any new or change in FTE should be pre-approved. Forms can be found here.

Procedures for merit awards for graduate students are found here.

Faculty are responsible for initiating the process to charge staff to grants and contracts, and for inactivating their appointment at the end of a project (or earlier, if their employment is ending). Vacation earned/accrued by full-time or part-time staff who are supported by grants should be encouraged by Principal Investigators to take time off before funds are depleted or the grant expires. Otherwise, earned vacation time becomes a liability for the department.

Information on faculty salary charges on externally funded projects is available here.

According to IRS rules, payments can either be made to employees, independent contractors (IC) or human subjects. There is no other type of individual that can be paid. Thus, invited speakers, outside consultants of any type, outside advisors, outside paid reviewers, etc., must be paid as an IC.

If the Principal Investigator (PI) is buying a one-time service, then the IC will perform the service and submit an invoice. A consulting agreement is typically not required in such circumstances. If the service is recurring, then a consulting agreement should be in place to protect both parties in case something doesn't go according to plan.


A model consulting agreement that can be adapted for a given situation can be found here. (Instructions and ancillary forms, if needed, can be found here.) In addition to a consulting agreement, at least two forms are generally needed before payments can be made to a consultant under a grant: the Worker's Classification Form (Microsoft Word or Formatta), and a W-9 form to be filled out by the person/organization receiving the payment. For additional information on these and other forms that may be needed, click here. The following steps should be followed:

  • Prior to making arrangements with a potential IC, contact Research Services to initiate preparation of the consulting agreement (if needed) and to make sure the payment is allowable under the terms and conditions of the grant, especially on federal and federal flow through awards. Once the consulting agreement is fully executed, Research Services will upload a copy to the PTAP and notify Sponsored Program Accounting (SPA) that a new consulting agreement for that grant has been executed.
  • Upon making arrangements with the IC, immediately obtain a W-9 form and provide it to the contractor requesting that the IC sign and return the W-9 form as soon as possible to assist in the speed of processing payments. NOTE: A new W-9 form is not required if Accounts Payable already has assigned a vendor number to the IC: contact the Accounts Payable Department (312-915-8760 or e-mail at ACCOUNTS-PAYABLES@luc.edu in order to ascertain if the individual has an existing form on file.
  • Submit a Worker's Classification Form (Microsoft Word or Formatta). If applicable, be sure to check “yes” in item 12 and attach a copy of the consulting agreement, as described at http://www.luc.edu/finance/workersclassificationprocedure/.
  • Upon receipt of a request for payment from the IC, submit a check requisition, signed W-9 form, and supporting documentation (original invoice, flyer or brochure with speaker's name, etc.) to Accounts Payable at ACCOUNTS-PAYABLES@luc.edu for processing. Accounts Payable will import the request into the necessary systems and route the request to Sponsored Program Accounting for approval.


First follow the 8-step “Consulting Agreement Sourcing Procedure” that has been developed by the LUC Purchasing Department:

1. Consulting Agreement Request for Proposal (RFP) - As early as possible in the process, a one or two page RFP outlining the scope and requirements of the position must be completed. The PI should contact the Purchasing Department (Sam Perry) for assistance in the creation and review of the RFP.

2. Advertise the Consulting Position - Upon completion/approval of the consulting RFP, the Purchasing Department will post the position with the Loyola Career Development Center, the AJCU Job Bank, and any other available or recommended sources.

3. Position Responses - Cover letters/résumés of interested parties will be electronically forwarded to the Purchasing Department and Purchasing will forward same to the appropriate PI. The Purchasing Department will retain a copy of each submission to include with the electronic file of all documents pertinent to the consulting position.

4. Review Responses/Interview Selected Candidates - the PI reviews all responses and selects at least two viable candidates to interview for the position.

5. Candidate Selection - based on proposals received, interviews, and associated selection criteria, a candidate is selected.

6. Purchasing Checklist and Bid Summary Form - The Checklist is completed by the PI or their designee. A minimum of two proposals must be submitted to establish competition, an explanation of the selection criteria for consultant selected, and a price/cost analysis (method to determine price reasonableness) must be completed on the Checklist. The name of the person preparing the document must be printed out on page two, a Department Approval signature (other than the preparer) must be included, and after Purchasing Department review, a Purchasing representative signature is required. Any missing information on the Checklist will be communicated to the PI.

7. Finalize/Execute Consulting Agreement - the Office of Research Services will be asked to draft a Consulting Agreement. [A model consulting agreement that can be adapted for a given situation can be found here. See step #1 as described above in the section for “Consulting Agreements Costing Less Than $5,000,” In addition to the reviews listed in the above step #1, Research Services will also obtain a copy of the fully-approved “Purchasing Checklist and Bid Summary Form.”]

8. Scan and Store Documentation - Upon approval and execution of the Consulting Agreement by both parties, the Purchasing Department will scan and store all documentation for the Consulting position for future reference or audit.

Then follow the steps numbered 2-4 as described above in the section for “Consulting Agreements Costing Less Than $5,000.”

For policy and procedure guidance on payments to research subjects, click here.

Procedures for stipend payments to graduate students are not included here. Stipend payments are arranged through the Graduate Program Directors (GPDs) using the Merit Award Form. For additional information please contact the Graduate School at 773-508-3396.


Office of Research Services
6439 N. Sheridan Road, Suite 400 · Chicago, IL 60626-5309
Phone: 773.508.2471 · Fax: 773.508.8942 · E-mail:ors@luc.edu

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