Budgets, reporting & auditing

Consider the additional complexities and costs associated with running an international project, including:

Country-specific compliance

• Legal counsel, accounting, auditing, or tax advisory services.
• Business registration and tax filings.
• Withholding taxes and local taxes.

Project development and administration

• MIT board/governance participation costs.
• Incentives to encourage participation of MIT departments, labs, centers, and personnel.
• Indirect costs for non-research activities.
• Currency fluctuations.

Employment

• Mobility costs and employee benefits for long-term international assignments, which can be significant and cannot be paid by sponsored accounts. The International People Placement (IPP) team is your resource for these kinds of questions.

Outbound travel

• Visiting student fees (covering processing, registration, insurance, and student activities).  These cannot be paid by sponsored accounts without written permission from the sponsor.
• Technology, cell phone, per diem, travel, visa and immigration, and cultural training expenses.
• Business class travel, which is generally accepted for MIT faculty and staff, with written permission from the sponsor.

Personal safety and security

• Understanding international travel risk policy.
• Environment, health & safety planning.

It is important to understand the full financial picture of a project, considering the funds needed to directly support the activity as well as all indirect costs.

Principal Investigators often find that they are asked to put a dollar value on a project before it is well defined and costs fully understood. For significant international engagements, a best practice is to build in a project definition period of six months or so for both MIT and the sponsor to assess priorities, feasibility, and costs so that you may:

• Evaluate the costs. Before providing an estimated project total, consult with your DLCI financial administrator along with Research Administration Services (RAS) and/or Office of Strategic Alliances and Technology Transfer (OSATT) staff regarding the specifics of the statement of work so all costs can be identified and factored into the total. Additional taxes or legal fees must also be considered.
• Understand the details. The overhead rate for non-research activities, contributions to the endowment, and other potential MIT internal costs are specific to each project. RAS/OSATT will work with you to determine these costs as the project is developed.

All financial reports should reflect MIT’s official accounting records. The PI is ultimately responsible for monitoring the financial aspects of the sponsored project and must ensure accuracy of the financial information.

Working with the PI, the program administrator will prepare financial reports based on MIT’s financial records, while ensuring expenses are in accordance with the terms and conditions of the agreement as well as MIT policies. The financial reports should be submitted to the sponsor as specified by the collaboration agreement.

Certain sponsored agreements may require supplemental financial reports in an atypical format. Vice President for Finance (VPF) Financial Accounting and Reporting, VPF Tax and Global Operations, and RAS contract administrators can assist program administrators during early implementation to ensure that projects are structured properly in Kuali Coeus (MIT’s sponsored award management system) and that reports can be generated in either SAP (MIT’s business enterprise software system) or COGNOS (MIT’s data warehouse query tool) to meet both internal and external financial reporting requirements.

In addition, RAS and/or OSATT can assist you in understanding and preparing for local regulatory and reporting requirements as the collaboration agreement is being developed.

International sponsors may request an audit of sponsored accounts to ensure compliance with the fiscal requirements of the agreement. In addition, there may also be financial or tax audit requirements based on country-specific rules. The VPR Office of Cost Analysis serves as the primary point of contact for audit completion; please contact Cost Analysis if you receive a request for financial audit. They will coordinate with the MIT international program and/or department as needed to develop and submit a response to the sponsor. The program/department should not send correspondence in response to a sponsor’s audit request.