Business Services

Managing

International

Projects

NERAOC 2015

Business Services

Presenters:

Matt Clawson

Assistant Director of Financial Affairs

College of Agriculture

Beth Siple

Assistant Director of Financial Affairs

College of Agriculture

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Introduction

• Historically Purdue Agriculture has been very active in

international project activity, study abroad and hosting

international visitors

• Areas of focus include Afghanistan and many countries in Africa

• Sponsors include USAID, Gates Foundation, Foreign

Government, USDA

• The intent of today’s session is to give you ideas of things to

think about when working with global projects and share with

you experiences and practices

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Managing International Projects

• Study abroad

• Bringing International Visitors to Your Home Campus

• Hiring and Retaining Staff to Work Abroad

• Risk Management/Security

• Global Resource Committee/Purdue International Inc.

• Paying In-Country Foreign Nationals

• Cash/Banking

• International Subcontracts

• Disposition of Assets at Project Close out

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Study Abroad

• College of Agriculture

– 18 different programs running year around

• Programs in: Zambia, Colombia, Brazil, Ireland and New Zealand

• Purdue incentives to study abroad

– Dependent on length of program scholarships available from $1,000 to

$3,000 offered by the university. Scholarships also available from

College of Agriculture to Freshman.

• Challenges

– Safety- starts with selection of location

– Cost of program

– Support for program (Departmental, College and University)

– Accidents or health issues that arise

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Bringing International Visitors to Your Home Campus

• What are some things to consider when hosting foreign nationals on your campus:

– What type of position are you inviting them for: Visiting scholar, visiting faculty or visiting students

– Do you have a process to screen visitors/institutions before they are invited?

• Vetting visitors through proper databases

• Invitation letter, are the terms of visit clear

– Ex Intellectual property or access to campus resources

– Who else on campus is aware of the visitors in your unit

– Individual visa type may dictate whether they are eligible to be paid or non-paid

– If non-paid staff, determine what insurance coverage may exist for them while visiting your campus?

• Do you require short term visiting scholars to carry their own medical insurance?

– Often times these individuals may have very little cash on hand to pre-pay their own living expenses?

• Should you consider providing them with a monthly living allowance stipend?

• Does your University have a mechanism to do so?

Business Services International Visitor Appointment and Process

• Visiting Scholar – A visiting scholar appointee is an individual who is not appointed to an academic

rank…A visiting scholar may be invited by a faculty member, after specific approval…to engage in scholarly activities for the academic enrichment of the individual and the department. A visiting scholar is not an employee of the University and therefore receives no direct compensation from the University.

• College of Agriculture: Active 177 Visiting Scholars

• Purdue University invitation approval process (revised 2015) – All international scholars/students will be screened against government check lists prior

to sending offer letter.

– Visitors arriving on a J1 will be subject confirmation of English ability form (Must be completed to process DS2019). The completion of the form comes with an interview of invitee.

– Offer letter sent to scholar includes links to appointment type and explanation of Purdue Intellectual property guidelines.

• Why are these precautions necessary?

Business Services Hiring and Retaining Staff to Work Abroad

• How do we make an overseas appointment in potential danger zones

attractive to applicants?

– Have an attractive compensation package (base pay and additional pay allowances)

– Competitive leave policy (vacation, sick and supplemental leaves)

– Support from the home campus

• While interviewing take an approach that centers on core benefits that would

be applicable to the international work location and not home campus

specific.

– What benefits does this position have that are in country specific?

• Example: danger pay

• Having some flexibility into benefit and leave policies are key. Many staff

may compare benefit packages to NGO’s or State Department benefit

packages they have had in the past.

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Hiring and Retaining Staff to Work Abroad

• Many variations to leave policies have been adapted from leaves similar to

the State Department in order to allow for additional leave time.

– Example; Home leave.

– Staff in countries with high risk tend to look to leave country every 3 months

• Ensure in country staff are aware of equal opportunity policies on your

campus.

– What happens if an employee relation situation occurs in country?

– American workers employed by U.S. companies overseas enjoy the same broad

protections as workers in the U.S. That means protection under the anti-

discrimination laws travels with the employee, so long as the employee is a

U.S. citizen working for a U.S. company.

Source: EEOC website, 2015

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Hiring and Retaining staff to Work Abroad

• Some examples of benefits we have adapted for staff with off campus duty stations

– Holidays: adapted the practice of flexible holidays for recognized university holidays that would not be recognized in country.

– Additional leave allowances including home leave (staff reaches one year at post), regional rest break and rest and recuperation leaves.

– Housing allowances, living allowances and paying some expenses on behalf of the employee (consider the potential tax issues).

– Variations to university pay practices- danger pay, post differential pay and maintenances allowances (many of these may be project and site specific).

– Consider the additional cost associated with these pay practices.

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Risk Management/Security

• Do you have a plan on how to evacuate your university staff stationed overseas in the case of an emergency?

– Example: Virus outbreak in country • Plan for staff who return from countries with past outbreaks (Guinea Ebola outbreak)

– Example: Voluntary evacuation due to potential political unrest (extraction vs evacuation)

• In country activity safety and security plan in place (Ex. Does your location employ guards or security when traveling?)

• Do you have a good system in place to know where your staff are located at all times, either permanently or while in travel status?

– Systems in place at hiring to identify duty station

– Travel to countries under warning (who is aware)

• Health safety plan – does acting in country leadership have information needed if a

serious health issues arises.

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Global Resource Committee

Purpose:

• To assist with International activities in which Purdue’s faculty and

staff are involved via a standing committee with an experienced set

of resources and specialized knowledge.

Membership: • Comptroller’s Office, Treasury Operations, Accounting Services,

Sponsored Programs, Business Office, Human Resources, Legal

Counsel

Staff Liaison Position to provide oversight

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Purdue International Inc. (PII)

• Nonprofit 501(c)(3) organization launched in Summer 2014

• Flagship entity for Purdue’s global affairs programs

• As a nonprofit corporation, PII will be utilized to obtain legal status in foreign countries when required

• Actively pursuing registration in two countries under PII name

• Currently working to define relationship with the University

• Tracking activity for PII within existing University general ledger

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Defined Legal Presence in a Foreign Country

• Depending on the level of activity and length of time spent in a country, you may

want to consider establishing a legal presence

• Do the local host country laws require some form of legal registration to do business?

– Such requirements may vary significantly from country to country

– How many calendar days/year will you have staff permanently located in-country?

• What factors could “trigger” a requirement for legal registration?

– Opening a foreign institutional bank account for host country expenses

– Employment of foreign nationals

– Executing a lease for host country office space

– Purchasing host country goods and services

– Employees who are present in the country for more than 183 days

• Some institutions may choose to establish a separate legal entity to operate their in-country activities

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Paying In-Country Foreign Nationals

• Do you intend to hire in-country national staff as independent contractors vs. actual employees?

• Another option might be to hire them through a separate in-country H/R or payroll entity that your institution contracts with?

• Will cash payments be made to individuals in-country or wired from your home institution?

– Remember to account for banking wire/transaction fees if applicable

• Payroll tax obligations should be considered depending on local country tax laws.

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Tips on Hiring Foreign Nationals as a Contractor

• Pay for milestones or tasks vs. worked – Paid a flat fixed amount rather than based on hours worked.

– Avoid paying for “overtime”

• Avoid offering them “employee” benefits if possible – Paid leave, vacation, etc.

• Enter into a defined contract with specific terms identified – How often should the contract be reviewed/renewed?

– What are the termination clauses?

• Best practice would be that Contractor has flexibility to set his/her own hours vs. direct daily supervision with defined schedule.

– Appears less like an employer/employee situation

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Cash/Banking

• If there is going to be a lot of in-country activity over an extended period of time,

there will likely be a need to establish a local bank account

• The process for setting up a local bank account will be handled differently depending on the country and could take a significant amount of time

• Involve University Treasury Office (could be a different department depending on the university). This department can help locate a credible bank

• A bank with on-line banking and account information is important

• Signature Authority for the bank account will need discussed

• Dollar amount and reconciliation process needs established

– Daily reconciliation report sent to home campus (daily, weekly, etc.)

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Cash/Banking

• Cash is the main form of currency in many countries – Expenses need outlined up front justifying the amount.

– Expenses typically include lodging, paying drivers, research supplies, phone cards, etc.

– Proactively estimating project needs can help in determining appropriate cash flow

• Depending on the length of the stay and the banking options, it could make more sense to send cash with an employee – Western Union Quick Cash also an option

• Research cash advance could be an option – Employee must keep receipts and the advance must be reconciled

– May be requested as part of travel request, or done separately

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International Subcontracts

• Many international subcontractors have cash flow issues – Payment schedule may need to be milestone based versus cost

reimbursement

• US dollars should be the form of currency used in the subcontract agreement

• When funds are transferred, the dollars will be converted. The currency exchange will need reconciled

• Wiring money is the best option, however wires have to be constantly tracked to make sure the funds got to the correct entity

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Disposition of Assets at Project Close Out

• What sponsor or Federal requirements exist? – Some sponsors may have very defined property management guidelines

– Guidelines could be different for sensitive data or IT equipment

• Assets must be turned over to host country? – Does your university have a preferred mechanism to document that assets have been

properly transferred to a 3rd party? What documents are required to transfer ownership?

• What threshold is determined? – Do you have an inventory management system in place for “in-country” activities that

could easily identify capital assets, etc.?

• Costs of shipping items back to your home country? – Do you have adequate funds available at the end of the project to cover these costs?

– Shipping only relevant program and financial files/records could be a considerable amount.

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Summary

• Many things to consider when engaging in international activities

• Can involve a significant amount of time and resources

• Rules, regulations, and best practices vary from country to country

• Consider engaging legal counsel early