Presentation on theme: "Slide 1 FastFacts Feature Presentation April 7, 2009 We are using audio during this session, so please dial in to our conference line… Phone number: 877-468-2134."— Presentation transcript:
Slide 2 Todays Topic Well be taking a look at… New IRS Foreign Activity Reporting Requirements Review how existing cost objects should be handled Discuss the database Define the impact of reporting requirements on new cost objects
Slide 3 Todays Presenters Sunanda Holmes, Associate Director of International Business Compliance in the JHU Controllers Office Steve Hinnenkamp, Director of Financial Systems Administration in the JHU Controllers Office
Slide 4 Session Segments Presentation Sunanda and Steve will provide an overview of the new IRS reporting requirements and the database. During the presentation, your phone will be muted. Q&A After the presentation, well hold a Q&A session. Well open up the phone lines, and youll be able to ask questions. Sunanda and Steve will answer as many of your questions as time allows.
Slide 5 Contact Us If you would like to submit a question during the presentation or if youre having technical difficulties, you can us at: You can also send us an instant message! GoogleTalk – AOL Instant Messenger – HopkinsFastFacts MSN –
Slide 6 Survey At the end of this FastFacts session, well ask you to complete a short survey. Your honest comments will help us to enhance and improve future FastFacts sessions.
Slide 7 New IRS Reporting Requirements
Slide 8 Agenda Overview of new requirements Review how to handle cost objects New Existing Explore how to use the database Sponsored cost objects Non-sponsored cost objects Faculty mapping Foreign activity reporting scenarios
Slide 9 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-country Fellowships to students in-country at the time of the payment Lease or rent payments for in-country space Independent contractors working in-country Subcontractor/subrecipient payments in-country Equipment purchased in or shipped to the country Other expenses for in-country operations
Slide 10 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 ITEMACTIVITY TYPEDESCRIPTION 00U.S. Based Activity Default when U.S. is selected for country. 01Program Services Instruction, research, clinical practice, auxiliary enterprises, libraries, student services. 03Fundraising In-country fundraising (development) expenses.
Slide 11 New Cost Objects Created after 2/9/09
Slide 12 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.
Slide 13 Existing Cost Objects Created Prior to 2/9/09
Slide 14 Cleanup of Existing Cost Objects To meet the requirements, the JHU Controllers 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.
Slide 15 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.
Slide 16 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.
Slide 17 Accessing the Database Login URL is https://www.controller.jhu.edu/intbdc/index.jsphttps://www.controller.jhu.edu/intbdc/index.jsp Authenticate using your JHED ID User access is defined by security access
Slide 18 Quick Searches This quick search feature is recommended.
Slide 19 Verifying Sponsored Cost Objects From the records returned, select a sponsored program to verify. Make your selection by clicking on the link.
Slide 20 Verifying Cost Objects To view and update the cost object, review the data.
Slide 21 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.
Slide 22 Identifying Multiple Countries
Slide 23 Identifying Multiple Countries Make sure the box is checked Select multiple countries using the arrows Click Save and Verify to complete
Slide 24 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.
Slide 25 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.
Slide 26 Using Searches for Faculty Mapping
Slide 27 Faculty Mapping Execute your search Keep Example above was from a search of a cost object department. Select the cost object you want to complete.
Slide 28 Faculty Mapping Example If 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 menu 3. Verify the Country and Activity Type fields 4. Click Save and Verify
Slide 29 Faculty Mapping Example (cont.) 5. You will receive a confirmation message with the updated name.
Slide 30 Common Examples
Slide 31 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.
Slide 32 Foreign Travel Foreign travel unrelated to working 90 or more consecutive days in a country should not be reported as an in-country expense.
Slide 33 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.
Slide 34 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.
Slide 35 Foreign Activity Reporting Scenarios
Slide 36 Conclusion
Slide 37 In Summary New IRS report requirements mandate that JHU report details on our international activity. Deadline for completion of the database is May 15, Country Code and Activity Type need to be identified for all new cost objects as part of Master Data.
Slide 38 Looking Forward New 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.
Slide 39 Resources Contact the Office of International Business Compliance at 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 or call Helpful Links: OIBC homepage Database URL https://www.controller.jhu.edu/intbdc/index.jsphttps://www.controller.jhu.edu/intbdc/index.jsp
Slide 40 Q&A Were 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. Well be answering questions in the order that we receive them. Well also be answering the questions that were ed to us during the presentation. If theres a question that we cant answer, well do some research after this session, and then the answer to all participants.
Slide 41 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 us at:
Slide 42 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… Thanks again!