Excluding Bank Account and Routing Numbers from Contracts

It is UT System Treasury Management’s strong recommendation and a best practice to exclude any banking information from an agreement where UT expects revenue or other payments from a contractor/third party. The same is true when UT is paying a contractor/third party. In addition to potential fraud concerns, including bank information in a contract sometimes causes difficulty when UT changes or updates our banking information and when a contractor/third party sends funds without adequate details (or, in some cases, attempts to debit funds without prior authorization).

For agreements where revenue is expected, departments/contract administrators should work with their local Treasury or Accounts Receivable area to obtain the applicable forms and banking information to help facilitate electronic payment to UT after a contract has been signed.

For agreements where UT expects to pay a contractor/third party, including electronic payment statutory language (included in OGC’s Request for Proposal, Purchase Order and Contract templates), is recommended (sample follows):

Payments by Electronic Funds Transfer.

Section §51.012, Texas Education Code, authorizes University to make payments through electronic funds transfer methods. Contractor agrees to accept payments from University through those methods, including the automated clearing house system (ACH). Contractor agrees to provide Contractor’s banking information to University in writing on Contractor letterhead signed by an authorized representative of Contractor. Prior to the first payment, University will confirm Contractor’s banking information. Changes to Contractor’s bank information must be communicated to University in writing at least thirty (30) days before the effective date of the change and must include an IRS Form W-9 signed by an authorized representative of Contractor.

Additionally, most UT institutions have web areas for contractors/third parties to add and maintain their accounts receivable information. For example, the UT System website includes a Vendor Set-Up and Maintenance page with applicable forms and instructions: https://www.utsystem.edu/vendor-maintenance.

For more information, please contact Scott Patterson at spatterson@utsystem.eduor 512.499.4475 or William Huang at whuang@utsystem.eduor 512.322.3794.