Operating Guidelines for International Sponsored Activities

Recognizing Northwestern's growing interest in international projects and the importance of such projects for achieving institutional goals, yet needing to respond to the complex issues that arise, new policies and guiding principles have been devised. For purposes of this policy statement, an international project is one that is sponsored by a foreign government or by a private entity based in a foreign nation, irrespective of where the work is to be performed.

As it does for other sponsored projects, the Office for Sponsored Research (OSR) serves as the point of contact for faculty interested in submitting a proposal to an international sponsor. OSR's initial role is to determine the feasibility of moving ahead with proposal development. Risk Management, the Office of General Counsel, the Controller, and other University offices may be asked to participate in this process. Sufficient time should be provided to allow for the necessary internal analysis. OSR should be provided with a rationale for the activity and a budget outline.

OSR will then prepare a project assessment for the Vice President for Research. The Vice President may gather such other information as is deemed relevant to protect the originating unit, individual interests, or the University. Once approved, the proposal will be processed through OSR in accordance with established procedures and should include the written endorsement of the chairperson and dean or center director on the OSR-1 form, Statement of Commitments and Endorsement of a Proposal for a Sponsored Project. OSR will provide guidance on the preparation of the budget. The nonfederal indirect cost rate should be used. If an off-campus component is contemplated, the budget should clearly identify the on- and off-campus costs, and the correct indirect cost rate should be applied to each. If it emerges that a foreign sponsor declines to pay full overhead on this basis, any shortfall should normally be included as a direct cost to the sponsor in the form of rent, services, or project administration and will be recovered internally in the same manner as indirect cost. An authorized institutional signature by a designated OSR official or the Vice President for Research must be obtained before the proposal is submitted to the sponsor.

OSR is the only institutional office authorized to negotiate with the foreign sponsor on behalf of the University. The following terms will be included in agreements with foreign sponsors:

English is the operative language.
Payment is in U.S. dollars by wire transfer or by check drawn against a US bank or foreign bank with a US branch.
An escrow deposit and/or advance payments, equal to no less than the anticipated quarterly expenses, are required.
Invoicing instructions specifying the form, content, and required timing of invoice submission must be stated, along with sponsor contact and transmission instructions.
Financial reporting requirements and fund reversion conditions must be identified.
Language must allow for early termination by Northwestern and assure payment of actual expenses and noncancellable commitments through the date of termination.
Dispute resolution should be by arbitration through the International Chamber of Commerce.

When an international agreement is negotiated successfully, a University account will be established with the following conditions:

Funds will be appropriated to individual accounts as payments are received and have "cleared" the bank.
When available funds are insufficient to cover expenses and commitments, the account will be deactivated pending receipt of additional funds from the sponsor or a departmental or a valid center guarantee.
The Office of Accounting Services for Research and Sponsored Programs (ASRSP) is responsible for invoicing in accordance with the payment schedule designated in the agreement. When possible, invoices will be faxed to the sponsor. Originals will follow, via express mail. ASRSP will notify the project director if delays or other problems are encountered in the invoicing/ payment process. Where the project expenditures exceed awarded amounts, the University's Policy on Fiscal Responsibility for Projects Sponsored by Industry and Business will govern the resolution of any overdraft condition.

Proposals involving projects to be completed outside the United States should be developed with a clear understanding of the cultural setting of the country in which the project is to be undertaken. Because the financial and legal exposures in undertaking international projects may be significant, OSR will make every effort to assist the project director in understanding and reducing the financial and other risks that may be identified.