Navigating Financial Complexities in Global Research Collaborations

1. Collaborating with Foreign Entities: Financial Complexities Presented by: Shari Swisher, Director of Sponsored Projects Accounting and Compliance & Steve Mandes, Director of Finance for the Institute of Human Virology University of Maryland, Baltimore

2. LEARNING OBJECTIVES • Takeaways from this session: • Reinforce the importance of a well written sub agreement • Share strategic best practices to minimize institutional risk • Understand key controls for financial monitoring of sub-recipients

3. GLOBAL RESEARCH CHALLENGES • Common challenges: • Every country has unique cultural, social and legal differences • Partners may be unfamiliar with US compliance requirements • Budgets are challenging and sometimes unrealistic • Smaller entities may have internal control conflicts due to less segregation of duties • Relationships need more work, monitoring

4. COUNTRIES RECEIVING GRANTS 1.India 2.Nigeria 3.Tanzania 4.Ethiopia 5.Kenya 6.Uganda 7.South Africa 8.Mozambique 9.Zambia 10.China SOURCE: NACUBO, 12/5/12

5. CONSEQUENCES • What’s at stake if things don’t go well? • Audits and findings • Loss of funding • Incurring expenses not reimbursed by your prime • Reputational risk (difficult to quantify) • Let’s remember, we are working in countries looking for revenues • Criminal/civil penalties and fines for non-compliance • Expulsion and/or sanctions on doing future work in country

6. RISK ASSESSMENT • Some factors to consider: • Subrecipient is a foreign entity and/or performance location is foreign • Foreign performance site has additional compliance requirements • Prior, favorable experience with the organization and staff • Award size in relation to research portfolio • Subrecipient has a history of compliance problems as a recipient or subrecipient • Is the subrecipient passing work thru to a 3rd tier contractor • Does the subrecipient have well documented procurement guidelines, policies and procedures

7. RISK ASSESSMENT • Thoughts to consider: • Do you treat foreign institutions of higher education the same as you would any other foreign entity? • If the foreign entity also receives prime funding from the US government, would your approach to risk management be any different?

8. RISK ASSESSMENT

9. GETTING THE AGREEMENT RIGHT • Key points to remember: • State the obvious (ex. payments made in US dollars, documents should be in English) • For procurements, what is the process for authorizing large purchases? Are vendor selection methods prescribed? How should bidding be documented?

10. GETTING THE AGREEMENT RIGHT • Key points to remember: • Payment terms • Invoicing frequency and format • Does the entity have the money to “front” their expenses? Are you advancing funds? • If documentation is required, what are your expectations?

11. IN-COUNTRY SERVICE PROVIDERS • Vendor relationship

12. THE SUBAWARD IS FULLY EXECUTED, NOW WHAT?

13. INVOICE REVIEWS • Key points: • Validity of expenses must be verified along with achievement of scientific and technical progress by the PI or department designee on cost reimbursable awards • Ultimately, verification should include sign off by the department designee/responsible party on the invoice. • If documentation is required, what is it telling you?

14. INVOICE DOCUMENTATION

15. CASE STUDIES

16. BEST PRACTICES • Dedicated campus resources • Easier to support faculty doing international research and attract additional funding– “one stop shop” • Reduce administrative costs (both US and in country) • Can focus on the big picture--compliance with US and host country’s laws and regulations • Training • What is your campus doing?

17. COMMUNICATION!