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An agreement between Commonwealth
agencies is often referred to as a Memorandum of Understanding, or
MOU. Such MOU's are generally exempt from Attorney General
review. However, such memorandums of understanding are not
exempt from review by university legal counsel. Legal counsel
for both agencies must review the document. There is one
exception to this rule; federal monetary grants made directly to a
university. This exception exists because highly expedited
execution of paperwork is often tied to the acceptance of such
awards. Direct federal grants are different from so called
“pass through” grant agreements (where the funds flow
from the federal government to some other entity, then to the
university). Pass through agreements must still be submitted
for legal review (i.e. Federal grant money flowing to the
universities through third parties requires legal review, as do
agreements for equipment donation).
Agreements with other
Executive Agencies
Agreements with Executive Agencies
shall be titled “ COMMONWEALTH INTERAGENCY MEMORANDUM OF
UNDERSTANDING,” and must contain the following
clauses:
This Memorandum is not intended
to and does not create any contractual rights or obligations with
respect to the signatory agencies or any other
parties.
AND
Any dispute arising hereunder
shall be submitted to the Office of General Counsel of the
Commonwealth of Pennsylvania for final resolution.
Interagency Memorandums of
Understanding will be routed to university legal counsel just like
any other contract. Agreements with the following executive
agencies, shall be subject to an MOU:
Department of Aging
Department of Agriculture
Department of Banking
Department of Community and Economic Development
Department of Conservation and Natural Resources
Department of Corrections
Department of Environmental Protection
Department of Health
Governor’s Council for the Arts
Governor’s Council for the Humanities
Housing Finance Agency
Department of Insurance
Department of Labor and Industry
Department of Military and Veterans’ Affairs
Department of Public Welfare
Office of Administration
Office of the Budget
Pennsylvania Public Television Network
Pennsylvania State Police
Department of Revenue
Department of State
Department of Transportation
Agreements with Independent Agencies
An agreement with an independent
Commonwealth agency may also be drafted as a Memorandum of
Understanding. . Alternatively, such may be treated as an
ordinary contract, subject to Attorney General review. How
such an agreement is handled is left to the discretion of the
university and the independent agency.
For purposes of this manual, the
following agencies are independent agencies:
Office of Attorney
General
Office of Auditor General
Civil Service Commission
Ethics Commission
Fish and Boat Commission
Game Commission
Higher Education Assistance Agency (PHEAA)
Historical and Museum Commission
Human Relations Commission
Labor Relations Board
Liquor Control Board
Milk Marketing Board
Public Utilities Commission
Securities Commission
State Tax Equalization Board
Turnpike Commission
Department of Treasury
The foregoing lists of executive and
independent agencies are not
comprehensive.
Agreements within the State
System of Higher Education
Agreements between different parts of
the State System of Higher Education are not really
contracts. The entire arrangement should be treated from
start to finish as an internal transaction. Such agreements
differ from standard contracts in the following ways:
1. Bidding is not
required.
2. As long as the agreement is
solely between parts of the State System (agreements of two or more
universities with each other or with the Office of the Chancellor)
under no circumstances should the entities use a formal contract
document or anything that even appears remotely to be a binding
contract. The word "contract" should not be used within the
agreement to describe it.
3. The parties should formalize
their expectations in a letter between authorized employees at the
appropriate levels of authority. Teh Chancellor or President of the
university can authorize any employee to engage in contracts
generally, or in particular kinds of contracts. Persons exercising
such authority should have written authorization from the
Chancellor or President.
4. So long as no other entity except
the Office of the Chancellor and/or State System universities are
parties to the agreement, nothing in the ltter (or any reply to it
or other exchange of correspondence regarding it) should make
reference to any rights, or remedies for breach, or amnner of
enforcement. The letter shoudl state that the arrangement is not a
legally binding contract and is not enforceable in a court or in
the Board of Claims. The agremeent may state that in the event of a
dispute between two parties, advice and direction should be
requested from the Office of the Chancellor or Office of Legal
Counsel.
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