Vendor Authorization/1099 Process

Policy and Procedures: Vendor Authorization / 1099 Process

PURPOSE: The purpose of this policy is to maintain the integrity of the vendor database by
establishing internal control procedures for vendor management which includes the addition and
maintenance of vendors and user access to the system. In addition it is also to establish the internal
controls procedures for compliance with federal guidelines regarding 1099 information reporting.

POLICY: This policy is to ensure that all vendors providing services or goods for the University are
properly approved and documented.

POLICY SCOPE: The University Business Office works in coordination with all departmental
representatives at the University involved in vendor relations.

RESPONSIBILITIES:

 The accountant from finance services is responsible for ensuring vendors are properly set up
in the ERP system database in accordance with University policy. This person is also
responsible for all changes to vendor accounts which can include an address change, payment
terms change, payment method, etc.

 The accountant from finance services is responsible for ensuring that quarterly procedures are
properly conducted to evaluate the validity of the vendor’s tax identification numbers (TIN).
This includes compliance with federal and state regulations as it relates to 1099 information
reporting.

 The University Business Office designated individual is responsible for reviewing all vendor
entries whether new or changes in the ERP database from the Supplier Audit Log.

 The University Business Office designated individual is responsible for assigning staff that are
responsible for managing the vendor database and completing the 1099 reporting processes.

PROCEDURES:

 TIN verification:

o On a quarterly basis a Bulk Tin Matching Session will be completed through the IRS
secure website. A query is pulled through ERP and converted to a text document for
the upload. A response will be emailed from the IRS within three days. To obtain the
response, sign back on to the IRS website and go to the designated mailbox.
Download the document and convert to an excel file.

o The results descriptions are:

 0 TIN and Name match

 1 TIN was missing or was entered incorrectly

 2 TIN entered is not currently issued

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  3 TIN and Name do not match

 4 Invalid TIN matching request

 5 Duplicate TIN matching request

 6 TIN Match found only on SSN, when the TIN type is (3 - Unknown)

 7 TIN Match found only on EIN, when the TIN type is (3 - Unknown)

 8 TIN Match found on both the SSN and EIN format, when the TIN type is (3 -
Unknown)

o For vendors that come back with a vendor/TIN mismatch, pull the W9 and compare it
to the ERP system. If there was a name type or number transposition, correct and
complete an interactive TIN query through the IRS website.

o If still no match, a letter must be sent to the vendor along with a W9 for them to
complete. There vendor ID is to be placed on “inactive” status and documented that
the TIN number on file is incorrect and pending a new W9.

 ERP Processes

o Complete the Post Withholding process.

o Complete the Mismatch Report. Work the report to determine what lines have errors
so that necessary corrections can be made.

o Pull Expense Report Query quarterly and make corrections as required to the
withholding report.

o Review sequel report ran by data systems analyst the first part of January following
the prior year. Make any corrections as required and determine why the system made
the error.

o Complete the Update and Post Process.

o Print 1099 Withholding to Send Detail Report

o Create 1099Misc Copy B file.

 1099 Reporting:

o All vendors who qualify for 1099 reporting receive an annual 1099 as set forth by the
IRS.

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