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.
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:
- Bidding is not required.
- 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.
- 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.
- 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.