UW (or any state) employee working freelance for another UW department

I'm wondering if anyone out there works in any state position (UW or otherwise) AND does web work on the side, for another UW department. If so, are you paid through regular payroll, or as a contractor with your business name and LLC? If you are paid as a contractor, please help me out with how the department you do freelance for was able to set that up.

Thanks in advance - I really appreciate your assistance.
Linda