1. FIN-ACC-55 Foreign Source Gifts, Contracts, and Revenue-Producing Activities
2. UCO-AFO-1.02 Financial Transaction Substantiation Standard
3. UCO-IRR-1.00 Internal Controls Standard

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Preface

This standard discusses the requirements for reporting on foreign source gifts, contracts, and revenue-producing activities.

The information presented below will provide departments with a general understanding of the three different federal and state reporting requirements, as well as fiscal officer and unit-level expectations. This standard will also provide reporting templates for departments to use when compiling information for submission to the Office of the University Controller (UCO).

 

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Introduction

Title I of the Higher Education Act of 1965 (hereafter referred to as Section 117) requires all institutions that process U.S. federal student aid to disclose semi-annually to the U.S. Department of Education (ED) specific financial transactions with foreign sources, pursuant to Section 117. The Chips and Science Act of 2022, (hereafter referred to as 10339B) requires all institutions that receive funding from the U.S. National Science Foundation (NSF) to disclose annually to the NSF specific financial transactions with foreign sources based in a country of concern, pursuant to the Act. In addition, Indiana Code Title 21 Article 30 Chapter 7 (hereafter referred to as HEA 1179) requires state institutions to semi-annually submit a disclosure report to the Indiana Commission for Higher Education of all transactions as the result of a contract or agreement with a foreign source located in a foreign adversary during the reporting period. These federal and state reporting regulations require the reporting of certain gifts, contracts, revenue-producing activities, and other arrangements entered into with a foreign source.

Reporting is required if gifts, contracts, or arrangements meet the following criteria:

Matching criteria for all regulations

• Revenue is expected from a foreign source, and/or
• The agreement with a foreign source involves the university, one of its units, or an affiliated organization receiving money, property, or other tangible benefits from a foreign source for the benefit of the university (“Foreign Source Arrangements”), and the following regulation specific criteria:

Federal Section 117

• The expected value of the agreement is $250,000 or more, considered alone or in aggregate with all other gifts from or contracts with the same foreign source in any calendar year for the institution. The aggregated amount per campus includes potential foreign source revenue or benefits received by all university and affiliated entities. Because the reporting threshold is in aggregate, the university has chosen a single transaction threshold of $10,000 to ensure all potential foreign sources are being captured.

Federal CHIPS Act 10339B

• The foreign source is based in a Country of Concern, defined as the People’s Republic of China (CHIPS Act currently does not include special administrative regions of Hong Kong or Macau), the Democratic People’s Republic of Korea (North Korea), the Russian Federation, the Islamic Republic of Iran, or any other country deemed to be a country of concern as determined by the Secretary of State.
• The expected value of the agreement is $50,000 or more, considered alone or in aggregate with all other gifts from or contracts with the same foreign source in any fiscal year for the institution. The aggregated amount includes potential foreign source revenue or benefits received by all university campuses and affiliated entities. Because the reporting threshold is in aggregate, the university has chosen a single transaction threshold of $10,000 to ensure all potential foreign sources are being captured.
• Student tuition and fees are not included in reportable items.

State HEA 1179

• The foreign source is located in a Foreign Adversary, defined in 15 CFR 7.4 as the People’s Republic of China (including the special administrative region Hong Kong), the Democratic People’s Republic of Korea (North Korea), the Russian Federation, the Islamic Republic of Iran, the Republic of Cuba, and Venezuelan politician Nicolás Maduro (Maduro Regime).
• As the result of a written contract or agreement, any gift or contract with a financial benefit of any value received directly or indirectly (i.e., through an intermediary or affiliate organization) from or with any foreign source located in a foreign adversary is required by law to be reported. All amounts (cash, cash equivalents, or tangible items) without regard to threshold must be included in the reporting.
• Student tuition and fees are not included in reportable items.

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Foreign Source Gifts, Contracts, and Revenue-Producing Activities Discussed in Detail

Data Collection & Solicitation

As defined in policy FIN-ACC-55 Foreign Source Gifts, Contracts, and Revenue-Producing Activities, it is the administrative responsibility of UCO to compile and submit reportable items to the appropriate authority. It is, however, the responsibility of each Indiana University (IU) department, Designated Reporting Unit (DRU), and affiliated organization to report any arrangements established with a foreign source and the expected value of those arrangements to UCO as listed below.

Every department or affiliated organization of Indiana University is subject to providing foreign source information timely for reporting purposes. There are three types of organizations designated for foreign source reporting: Designated Reporting Units (DRUs), affiliated organizations, and all other IU department-level organizations. IU units include, but are not limited to UCO-IRR-2.00 Constituent Reporting Units, university administrative units, such as Alumni Relations, and department-level organizations, such as Chemistry.

DRUs, affiliate organizations, and IU fiscal officers from department-level organizations are required to collect financial source records and compile foreign source data relevant to their organizations and to maintain supporting documentation according to the university’s records retention policy UA-18 University Records Retention and Disposition and IU’s UCO-AFO-1.02 Financial Transaction Substantiation Standard.

Additionally, all DRUs, affiliate organizations, and IU fiscal officers are responsible for ensuring proper controls are developed and instituted within their respective organizations to collect, record, and produce the required unit-level data for which they are responsible. Responsible individuals must also create, maintain, and communicate standard procedures within their unit-level organization for collection and submission of foreign gift reporting information to UCO.

Required Reporting Process for Units

The Office of the University Controller (UCO) will rely on all DRUs, affiliate organizations, and IU fiscal officers to report potential foreign source revenue activity. When a unit enters into or receives a new gift, contract, revenue-producing activity, or other arrangements with a foreign source, it is important to be familiar with who the donor/funding agency or customer is and the origin of the potential revenue.

It is also important to ensure that all transactions related to revenue follow the appropriate procedures institutionally, as required:

• All gifts to Indiana University should be made directly to the Indiana University Foundation (IUF) and will be reported by IUF to UCO.
• All sponsored awards should flow through the Office of Research Administration (ORA). Potential foreign source revenue from sponsored awards will be reported by ORA to UCO.
• All payments for students should be processed through the University Bursar via the Student Information System (SIS) and will be reported by the Bursar to UCO.
• All foreign source contracts and arrangements should be reviewed by General Counsel in accordance with university policy FIN-TRE-100 Signature Authority and Delegation. The fiscal officer is responsible for reporting all foreign source contracts for their organization to UCO timely.
• All non-student billings to other entities should be processed through the Kuali Financial System (KFS) Accounts Receivable unless use of a subsidiary accounting system has been approved by UCO. All non-student revenue-producing activities should be approved in advance via FIN-TRE-121 Establishing and Modifying Revenue-Producing Activities (RPA). The fiscal officer is responsible for reporting all non-student revenue-producing activity for their organization to UCO timely.

Internal Audit may validate, through the use of data analytics, that units have properly reported all potential foreign source revenue activity. Results identified through this process are submitted to UCO for any follow-up actions they deem necessary.

Specific Steps for Reporting to UCO by Regulation

Federal Section 117

All potential foreign source gifts, agreements, or contracts which exceed $10,000 that may generate future revenue should be reported by the fiscal officer to UCO semi-annually. Additionally, any actual revenue transactions generated during the accounting period from foreign sources that exceed $10,000, which have not previously been reported, should be submitted to UCO, according to the timeline listed below.

Timeline

Step	July Reporting Period	January Reporting Period
Transactions or Agreements Between	1/1 through 6/30	1/1 through 12/31
UCO Reminder Email to DRUs and IU Departments	6/15	12/15
UCO Request Email to DRUs and IU Departments	7/5	1/5
DRU and IU Departmental submissions due to UCO	7/11	1/11
Foreign Gift Committee Review	7/28	1/28
Federal Section 117 Report Submission Deadline	7/31	1/31

The procedural compliance requirements are outlined as follows:

Step 1: Complete the Foreign Source Section 117 Reporting Template with the necessary information found in the foreign source agreement, contract, award, grant, or gift.

• • 1. Foreign source name and address
    2. Amount of gift received or contract total expected
    3. Date of gift or date range of contract
    4. Any contract and gift restrictions
    5. Domestic party or sponsor, if applicable

If you have interpretation questions, contact the UCO Foreign Source Reporting group at forsrcgc@iu.edu and UCO will advise or consult with the Office of General Counsel to answer your question.

Step 2: Send the completed spreadsheet to the UCO Foreign Source Reporting group at forsrcgc@iu.edu no later than July 11th and January 11th each year. The January submission should be an accumulation of the unit’s activity for the entire prior calendar year since the compliance threshold is based on a calendar-year basis.

Step 3: The departmental fiscal officer must keep documentation of all agreements according to the university’s records retention policy UA-18 University Records Retention and Disposition and IU UCO-AFO-1.02 Financial Transaction Substantiation Standard.

A UCO representative assigned oversight of foreign gift reporting will request potentially reportable information from DRUs prior to each submission semi-annually. This information is also requested from university departments if they have had previous foreign source reportable items during the prior two calendar years.

Units are sent a reminder email to continue compiling information for the applicable reporting period in the month prior to report submission. Timely and accurate reporting by all organizations to UCO is necessary for properly complying with the required federal deadlines.

Example Scenario:

Chemistry Department discusses potential agreement in March 2023 with University of Manchester (UK- foreign source), signs contract agreement on April 7, 2023, for $55,000 (April 2023 to June 2023).

Step 1: Chemistry Department fiscal officer fills out spreadsheet with above information from the agreement.

Step 2: Chemistry Department fiscal officer sends spreadsheet with this and any other agreements for the calendar year to UCO Foreign Source Reporting group at forsrcgc@iu.edu by July 11 for compilation verification and reporting.

Step 3: Chemistry Department fiscal officer keeps documentation of all agreements for at least five years for review and audit purposes.

Federal CHIPS Act 10339B

All potential foreign source gifts, agreements, or contracts from a foreign source based in a country of concern which exceed $10,000 that may generate future revenue should be reported by the fiscal officer to UCO annually. Additionally, any actual revenue transactions generated during the accounting period from foreign sources that exceed $10,000, which have not previously been reported, should be submitted to UCO, according to the timeline listed below.

Timeline

Step	July Reporting Period
Transactions or Agreements Between	1/1 through 6/30
UCO Reminder Email to DRUs and IU Departments	6/15
UCO Request Email to DRUs and IU Departments	7/5
DRU and IU Departmental submissions due to UCO	7/11
Foreign Gift Committee Review	7/28
Federal CHIPS 10339B Report Submission Deadline	7/31

The procedural compliance requirements are outlined as follows:

Step 1: Complete the Foreign Source CHIPS 10339B Reporting Template with the necessary information found in the foreign source agreement, contract, award, grant, or gift.

1) Foreign Source name and address

2) Amount of gift received or contract total expected

3) Date of gift or date range of contract

4) Any contract and gift restrictions or purpose, and specific researcher(s) it is for

5) Intermediary, if applicable

If you have interpretation questions, contact the UCO Foreign Source Reporting group at forsrcgc@iu.edu and UCO will advise or consult with the Office of General Counsel to answer your question.

Step 2: Send the completed spreadsheet to the UCO Foreign Source Reporting group at forsrcgc@iu.edu no later than July 11th each year with an accumulation of the unit’s activity for the entire fiscal year just completed since the compliance threshold is based on a fiscal-year basis.

Step 3: The departmental fiscal officer must keep documentation of all agreements according to the university’s records retention policy UA-18 University Records Retention and Disposition and IU UCO-AFO-1.02 Financial Transaction Substantiation Standard.

A UCO representative assigned oversight of foreign gift reporting will request potentially reportable information from DRUs prior to each submission annually. This information is also requested from university departments if they have had previous foreign source reportable items during the prior two fiscal years.

Units are sent a reminder email to continue compiling information for the applicable reporting period in the month prior to report submission. Timely and accurate reporting by all organizations to UCO is necessary for properly complying with the required federal deadline.

Example Scenario:

Chemistry Department discusses potential agreement in July 2023 with Shandong University (China – foreign source), signs contract agreement on August 7, 2023, for $55,000 (August 2023 to October 2023).

Step 1: Chemistry Department fiscal officer fills out spreadsheet with above information from the agreement.

Step 2: Chemistry Department fiscal officer sends spreadsheet with this and any other agreements for the fiscal year to UCO Foreign Source Reporting group at forsrcgc@iu.edu by July 11 for compilation verification and reporting.

Step 3: Chemistry Department fiscal officer keeps documentation of all agreements for at least five years for review and audit purposes.

State HEA 1179

All potential gifts, agreements, or contracts from a foreign source located in a foreign adversary that may generate future revenue should be reported by the fiscal officer to UCO semi-annually along with a copy of the written contract or agreement. Additionally, any actual revenue transactions generated during the accounting period from foreign sources located in a foreign adversary, which have not previously been reported, should be submitted to UCO along with a copy of the written contract or agreement, according to the timeline listed below.

Timeline

Step	July Reporting Period	January Reporting Period
Transactions or Agreements Between	12/1 through 5/31	6/1 through 11/30
UCO Reminder Email to DRUs and IU Departments	5/15	11/15
UCO Request Email to DRUs and IU Departments	6/1	12/1
DRU and IU Departmental submissions due to UCO	6/7	12/7
Foreign Gift Committee Review	6/20	12/15
State HEA 1179 Report Submission Deadline	7/1	1/1

The procedural compliance requirements are outlined as follows:

Step 1: Complete the Foreign Source HEA 1179 Reporting Template with the necessary information found in the foreign source agreement, contract, award, grant, or gift. (Unless otherwise prohibited or deemed confidential under state or federal law.)

1) Foreign source name and address

2) Amount of gift received or contract total expected

3) Date of gift or date range of contract

4) Any contract and gift restrictions or purpose, and specific person(s) it is intended to benefit

If you have interpretation questions, contact the UCO Foreign Source Reporting group at forsrcgc@iu.edu and UCO will advise or consult with the Office of General Counsel to answer your question.

Step 2: Send the completed spreadsheet and a copy of each contract or agreement to the UCO Foreign Source Reporting group at forsrcgc@iu.edu no later than June 7th and December 7th each year.

Step 3: The departmental fiscal officer must keep documentation of all agreements according to the university’s records retention policy UA-18 University Records Retention and Disposition and IU UCO-AFO-1.02 Financial Transaction Substantiation Standard.

A UCO representative assigned oversight of foreign gift reporting will request potentially reportable information from DRUs prior to each submission semi-annually. This information is also requested from university departments if they have had previous foreign source reportable items during the prior two years.

Units are sent a reminder email to continue compiling information for the applicable reporting period in the month prior to report submission. Timely and accurate reporting by all organizations to UCO is necessary for properly complying with the required state deadlines.

Example Scenario:

Chemistry Department discusses potential agreement in March 2025 with Peking University (China – foreign source), signs contract agreement on April 7, 2025, for $3,000 (April 2025 to June 2025).

Step 1: Chemistry Department fiscal officer fills out spreadsheet with above information from the agreement.

Step 2: Chemistry Department fiscal officer sends spreadsheet with this and any other agreements, along with copies of those contracts and agreements, to UCO Foreign Source Reporting group at forsrcgc@iu.edu by June 7th for compilation verification and reporting.

Step 3: Chemistry Department fiscal officer keeps documentation of all agreements for at least five years for review and audit purposes.

HEA 1179 reporting guidance provided by the Indiana Commission for Higher Education:

1) Only gifts and contracts where a financial benefit is received by the university is considered for report inclusion.

2) Only gifts and contracts that have a written agreement or contract need to be reported.

3) Student tuition and fees is not included in reportable items.

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Requirements and Best Practices

This section outlines general requirements and best practices related to recording foreign source gifts, contracts, and revenue-producing activities.

Requirements

Semi-annually

1. The fiscal officer must review all funding received by the unit and report any gifts, contracts, grants, or awards from foreign sources to UCO on a semi-annual basis.
2. Fiscal officers must submit their unit’s full spreadsheet of potentially reportable items that exist no later than July 11, 202X or January 11, 202X, for each reporting cycle for Section 117 and CHIPS Act reporting, and December 7, 202X and June 7, 202X for HEA 1179 reporting.
3. If UCO requests additional information about a potentially reportable item, reporting units should respond timely (within two business days).
4. Fiscal officers should communicate foreign source reporting requirements at least semi-annually to department personnel to ensure faculty and administrators are aware of the regulations.
5. All Constituent Reporting Units (CRUs) must attest to compliance with the requirements of FIN-ACC-55 Foreign Source Gifts, Contracts, and Revenue-Producing Activities annually through the sub-certification process.

Best Practices

1. Notify the UCO Foreign Source Reporting group at forsrcgc@iu.edu of potentially reportable items over $10,000 within one month of the signed agreement or receipt of foreign source revenue.
2. Notify UCO Foreign Source Reporting group at forsrcgc@iu.edu of potentially reportable items of any value within one month of signed agreement or receipt of foreign source revenue from a foreign source based in a country of concern or located in a foreign adversary.
3. Respond to questions from the UCO Foreign Source Reporting group within 24 hours during the reporting months of December, January, June, and July to facilitate full compliance with federal and state reporting deadlines.
4. Document internal control procedures and training provided to your unit for reviewing funding received for foreign source origination.