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FastFactsFeature Presentation
April 7, 2009
We are using audio during this session, so please dial in to our conference line…
Phone number: 877-468-2134 Participant code: 182500
© 2009 The Johns Hopkins University. All rights reserved.
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Today’s Topic
We’ll be taking a look at…New IRS Foreign Activity Reporting Requirements
Review how existing cost objects should be handledDiscuss the databaseDefine the impact of reporting requirements on new cost objects
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Today’s PresentersSunanda Holmes, Associate Director of International Business Compliance in the JHU Controller’s Office
Steve Hinnenkamp, Director of Financial Systems Administration in the JHU Controller’s Office
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Session Segments
PresentationSunanda and Steve will provide an overview of the new IRS reporting requirements and the database.During the presentation, your phone will be muted.
Q&AAfter the presentation, we’ll hold a Q&A session. We’ll open up the phone lines, and you’ll be able to ask questions. Sunanda and Steve will answer as many of your questions as time allows.
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Contact Us
If you would like to submit a question during the presentation or if you’re having technical difficulties, you can email us at: [email protected] can also send us an instant message!
GoogleTalk – [email protected] Instant Messenger – HopkinsFastFactsMSN – [email protected]
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Survey
SurveyAt the end of this FastFacts session, we’ll ask you to complete a short survey. Your honest comments will help us to enhance and improve future FastFacts sessions.
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New IRS Reporting Requirements
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Agenda
Overview of new requirementsReview how to handle cost objects
NewExisting
Explore how to use the databaseSponsored cost objectsNon-sponsored cost objects
Faculty mappingForeign activity reporting scenarios
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Overview of New Requirements
New IRS reporting requirements began in FY09.
JHU is required to report total expenditures “in-country”.
Salaries for employees working in-countryFellowships to students in-country at the time of the paymentLease or rent payments for in-country spaceIndependent contractors working in-countrySubcontractor/subrecipient payments in-countryEquipment purchased in or shipped to the countryOther expenses for in-country operations
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Financial Reporting Requirements
Total expenditures will be reported by Central Administration through reports run in Business Warehouse (BW).
For this to be accurate, all cost objects must be identified by:Country Activity type
ITEM ACTIVITY TYPE DESCRIPTION
00 U.S. Based Activity Default when U.S. is selected for country.
01 Program Services Instruction, research, clinical practice, auxiliary enterprises, libraries, student services.
03 Fundraising In-country fundraising (development) expenses.
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New Cost ObjectsCreated after 2/9/09
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Impact on New Cost Objects
New reporting requirement impacts the set-up of new cost objects for both sponsored and non-sponsored funds.
The Country Code and Activity Type need to be identified for all new cost objects established.
Country code and Activity Type will become part of master data.
A separate cost object is needed for each foreign country and activity type for an award, activity or program.
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Existing Cost ObjectsCreated Prior to 2/9/09
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Cleanup of Existing Cost Objects
To meet the requirements, the JHU Controller’s Office has created a database.
The database will be used for:
Sponsored Cost Objects: – Verifying and assigning country codes and activity types.
Non-sponsored Cost Objects: – Verifying and assigning country codes and activity types.– Mapping of faculty to non-sponsored cost objects.
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Cost Objects Created Prior to 2/9/09
Department administrators will receive two separate spreadsheets
One containing sponsored data
One containing non-sponsored data
Departments will utilize a database update information on existing cost objects.
The database is pre-populated based on vendor data and existing function types in SAP. Note: there could be additional cost objects with foreign activity, coded as US based in the database.
Users are required to verify the information, make corrections and save changes.
Verification should be completed by May 15, 2009.
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Sponsored Cost Objects
We need to determine if the cost object is being used for activities in a foreign country.
If there are charges for multiple countries being posted to the same cost object, make sure you select all applicable countries, and USA, as appropriate.
For FY10 expenses, establish separate internal orders.
For grants with multiple internal orders, the home cost center of the primary internal order is responsible for verifying all the sponsored programs.
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Accessing the Database
Login URL is https://www.controller.jhu.edu/intbdc/index.jsp Authenticate using your JHED IDUser access is defined by security access
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Quick Searches
This quick search feature is recommended.
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Verifying Sponsored Cost Objects
From the records returned, select a sponsored program to verify.Make your selection by clicking on the link.
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Verifying Cost Objects
To view and update the cost object, review the data.
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Verified Search Results
Upon clicking on “Save Only” or “Save and Verify”, an entry will be made on the S/V column on your search results.Once there is an entry of “V” in the column, the cost object will be removed from future “View All Foreign Not Verified” searches.
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Identifying “Multiple Countries”
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Identifying “Multiple Countries”Make sure the box is checked
Select multiple countries using the arrows
Click “Save and Verify” to complete
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Non-sponsored Cost Objects
Before we begin:The process to review, make changes and “Verify and Save” is the same as we discussed for sponsored cost objects.
If there are charges for multiple countries being posted to the same cost object, make sure you select all applicable countries, and US, as appropriate.
Faculty should be mapped to their non-sponsored cost objects, even if the country listed is US.
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Mapping Faculty to Cost Objects
An important function of the database is to map faculty members to non-sponsored cost objects.
This information was not part of master data prior to 2/9/09.Mapping will aid in future reporting enhancements for faculty
Where possible, this data has been populated using available information and will include the personnel number (PERNR).Database users should verify or change this information as necessary.
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Using Searches for Faculty Mapping
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Faculty Mapping
Execute your searchKeep
Example above was from a search of a cost object department.
Select the cost object you want to complete.
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Faculty Mapping ExampleIf all of the information is accurate, just click “Save and Verify”.To update the cost object with a responsible person:
1. Enter the PERNR in the box 2. De-select the name from the drop down menu3. Verify the “Country” and “Activity Type” fields4. Click “Save and Verify”
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Faculty Mapping Example (cont.)
5. You will receive a confirmation message with the updated name.
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Common Examples
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Salary for Employees “In-Country”
For university employees who usually work in the U.S., salary expenses should be charged to an “in-country” cost object only if the duration will be more than 90 consecutive days in the country in a fiscal year.
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Foreign Travel
Foreign travel unrelated to working 90 or more consecutive days in a country should not be reported as an “in-country” expense.
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Fellowship Payments
For fellowship payments, the location of the student at the time of the payment determines the country for the cost object.
If the fellowship is paid while the student is in the U.S., charge a U.S. based cost object.
If the fellowship is paid while the student is located “in-country”, charge a foreign cost object.
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Subcontracts
For subcontracts, the country where the payment is sent determines the country for the cost object.
If a subcontractor payment is sent to a U.S. address, a U.S. cost object should be charged.
If a subcontractor payment is received “in-country”, a foreign cost object should be charged.
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Foreign Activity Reporting Scenarios
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Conclusion
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In Summary
New IRS report requirements mandate that JHU report details on our international activity.
Deadline for completion of the database is May 15, 2009.
Country Code and Activity Type need to be identified for all new cost objects as part of Master Data.
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Looking ForwardNew guidelines adopted by the IRS for FY09 require that we gather and report:
Number of offices in each foreign country.
How many employees are paid on a local payroll.
Number of employees working in-country and paid from a U.S. payroll.
Number of independent contractors paid locally or from the U.S.
Gathering this information will be the next phase of the database project.
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ResourcesContact the Office of International Business Compliance at [email protected] with any questions or concerns about how to classify an expense, choose a country or activity code.
For questions or problems with the database functionality or access issues, contact [email protected] or call 410-516-3277.
Helpful Links:OIBC homepage http://www.controller.jhu.edu/depts/ibc/index.htmlDatabase URL https://www.controller.jhu.edu/intbdc/index.jsp
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Q&AWe’re going to open the phone lines now!There will be a slight pause, and then a recorded voice will provide instructions on how to ask questions over this conference call line.We’ll be answering questions in the order that we receive them.We’ll also be answering the questions that were emailed to us during the presentation.If there’s a question that we can’t answer, we’ll do some research after this session, and then email the answer to all participants.
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Thank You!
Thank you for participating!We would love to hear from you.
Are there certain topics that you would like us to cover in future FastFacts sessions?Would you like to be a FastFacts presenter?Please email us at: [email protected]
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Survey
Before we close, please take the time to complete a short survey.Your feedback will help us as we plan future FastFacts sessions.Click this link to access the survey… http://connect.johnshopkins.edu/fastfactssurvey/
Thanks again!
