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Business Officer Magazine

Protocal for Ports of Call

Your overseas programs may have become so complex that they require a central focus and dedicated resources. Peers advise: Do your homework and don't hesitate to let others be your guide.

By Sandra R. Sabo

*How do we open a bank account in Namibia? Are we an NGO? What's the best way to send $300,000 in cash to Ethiopia every month?

When the University of Washington's finance office started fielding such out-of-the-ordinary questions, V'Ella Warren, UW's chief business officer, took notice. She found most of the questions came from the university's department of global health—specifically, a training program that is part of a U.S. government grant awarded to UW to address the HIV/AIDS crisis in Africa. 

Although the University of Washington, Seattle, annually sends about 2,000 students to study abroad and has a presence on several continents, the $300 million federal grant required new activities, such as hiring foreign nationals and crafting suitable benefits packages for them.

READ AN ONLINE EXTRA, "Behind the Scenes in Doha," in Business Officer Plus.

"Our chief business officer not only recognized that the university didn't have the capacity to handle the complexity of problems presented by the grant, but also organized a response to the situation," says Kate Riley, project manager of UW's Global Support Project. Initiated by Warren along with Ann Anderson, associate vice president and controller, the Global Support Project focuses on facilitating international operations and resolving administrative problems that could hinder those operations.

Within the past year, Duke University, Durham, North Carolina, established its Office of Global Strategy and Programs to coordinate more than 300 educational programs and partnerships around the world. "For years, higher education entities have taken a low-cost, low-investment approach to global activities. But programs have become so broad and complex that they require some dedicated focus and resources," says Kyle Cavanaugh, Duke's vice president for human resources. Duke, for example, is currently exploring a three-party venture with a provincial government and a university in China—a country with both complicated and rapidly changing regulations.

"Because of the entrepreneurial nature of universities, faculty and researchers typically want to go to another country, open their suitcases, and start working. They don't necessarily think about the infrastructure and additional costs needed to support those efforts," observes UW's Riley.

In fact, according to Bob Lammey, the lack of an efficient and effective support structure can be a significant barrier to the success of international operations. Formerly the director of international business operations at Harvard University, Lammey is now director of higher education at High Street Partners, an international business services firm headquartered in Annapolis, Maryland.

"Without adequate institutional support—in terms of staffing, funding, and professional assistance—faculty often take matters into their own hands, which can increase the financial and reputational risk of the university," Lammey says. In addition, the lack of a centralized international-support infrastructure often means the university starts from scratch with each new project or program it launches abroad.

Careful Consideration

A repeatable model for doing business globally emerged as a bonus by-product when Carnegie Mellon University opened its first branch campus seven years ago in Qatar, far from its Pittsburgh roots. Even though it already offered hundreds of international dual-degree programs for graduate students, the university had never before undertaken a large-scale international project at the undergraduate level.

"If you don't have the size or scope to build internal expertise, establish relationships with international vendors—companies with a physical presence around the globe."

Kyle Cavanaugh, Duke University

When offered the opportunity to establish a presence in Qatar's Education City, Carnegie Mellon spent the better part of two years on due diligence. While staff researched the potential costs and implications of doing business in the Middle East, the board focused on strategic issues, such as maintaining the quality of students and faculty. Using quantitative modeling, Carnegie Mellon developed a comprehensive business model that accommodates standard administrative costs as well as benefits packages for expatriate employees. The university has since employed the model to design and refine other international opportunities, including a branch campus in Australia.

"From the start, we had a Qatar finance group structured much like a sponsored project, with allowable costs and an agreed-upon procedures audit," explains Deb Moon, vice president of finance and chief financial officer. The group evolved into an international finance division that specializes in identifying and managing global risks, negotiating contracts with foreign vendors, and following international accounting standards (and converting those standards to U.S. GAAP for domestic financial statements and reporting).

"Although that division is a silo, in terms of its dedication to our international efforts, those employees are integrated into every operating group within finance," says Moon. "They are part of the budgeting process, part of the year-end closing process, and part of the tax group, and this team approach helps with decision making and knowledge sharing."

Setting up Carnegie Mellon's Qatar campus yielded at least one surprise: the need to have multiple employees who specialize in international shipping. Moon notes, "We didn't expect how big a job it is to ship information and people's belongings back and forth, especially when you're dealing with another country's customs and social laws." Qatar's laws, for instance, prohibit the shipping of R-rated movies.

In the Know

"It's a huge advantage to have [international] alumni who can help us understand how to do business in their country and introduce us to the right people."

Deb Moon, Carnegie Mellon University

Ideally, you'll have people internally who know the regulations and idiosyncracies of each country in which your institution operates. The University of Washington relies on an international attorney within the state's legal office to identify and hire legal counsel abroad. In addition, UW has identified an international specialist in every administrative unit, including accounts payable, payroll, travel, legal, and human resources. The university publishes the list, to encourage faculty and staff to contact the appropriate person for assistance rather than going it alone.

"If faculty don't have a designated point person who provides timely follow-up to their questions and can solve their operational issues, they may forgo the university's assistance and do their own thing, which can lead to noncompliance," warns Lammey. Contracts for international research awards, for example, typically require compliance with the country's laws and regulations. Failing to properly register activities with a foreign government or to obtain work permits for employees in another country could lead to loss of the grant, not to mention embarrassing headlines back home.  

There's also the danger of running afoul of U.S. and foreign laws—especially those related to exporting ideas and information, collaborating with foreign entities, hiring locals, recordkeeping, and financial and tax reporting. According to Alexander Koff, an attorney in the Baltimore office of Whiteford Taylor & Preston, educational institutions operating abroad need to remain keenly aware of U.S. export control rules issued by the State and Commerce Departments, sanctions rules administered by the Treasury Department, and anti-bribery rules imposed by the Department of Justice.

Consider also the area of intellectual property, which can drive revenue. "Institutions may go abroad to collaborate and create greater research opportunities. If so, consider whether the country has laws to safeguard intellectual property," says Koff, who heads his firm's global practice group. "Choose an alliance partner carefully, and think through who owns the intellectual property being developed."

To reduce these various risks, budget for outside experts, especially in key areas such as legal, human resources, cash management, and compliance reporting. "If you don't have the size or scope to build internal expertise, establish relationships with international vendors—companies with a physical presence around the globe that you can lean on when necessary," recommends Duke's Cavanaugh. After using outside legal counsel for years, Duke now has an international attorney on its staff.

An Eye on Security

On the other hand, Duke engages outside vendors to provide security services and advice for its foreign operations. So, too, does Carnegie Mellon, which views international security as being important enough to engage outside advice to supplement its internal assessment. Every morning, members of the university's senior management team receive a report from an outside security consultant advising of the security status in areas where Carnegie Mellon has operations.

As the chief business officer for Houston Community College (HCC), which has a service agreement with the Qatari government to provide the vast majority of management, staff, and faculty for the Community College of Qatar, Reagan Romali takes on-site responsibility for emergency management. She remains in close contact with the U.S. embassy, ensuring that it has current contact information for HCC's 50 American employees working at the Community College of Qatar and reviewing its daily dispatches on events throughout the region and the world. Reached by phone at her office in Doha, Romali adds, "Every day, I also monitor all the major news sources, such as Al Jazeera and CNN, so I can keep the team informed and be ready to initiate our emergency operations plan if anything were to happen." 

Safety Nets

Of course, things do happen on occasion. Earthquakes, hurricanes, fires, civil unrest, hostile takeovers, and medical emergencies on another continent can mean many sleepless nights for staff at the home campus until they can account for everyone. In the last few years, Lammey has seen improved risk management in the form of centralized systems for tracking and contacting students who are studying and traveling abroad.

"Putting more structure around emergency and evacuation planning starts on the home campus, often with assistance from the chief business officer. Then you have to operationalize it at international locations, in case a political event or natural disaster occurs," Lammey observes.

In 2008, working with the provost's office, UW's Riley crafted a global emergency management plan that superseded the
individual plans used by the university's various international programs. Thanks to the major initiative, UW now has a designated health insurance carrier, a 24/7 emergency number for travelers to call, a full-time travel security manager, and a Web-based travel registry for undergraduates. The latter proved especially helpful early this year when riots broke out in Egypt.

"The database has put us in a position we had never been in before. We could quickly see who was in that country and make plans to get them out," says Riley.

Duke also requires faculty, staff, and students heading abroad on Duke-sponsored travel to register their trips in advance. Launched in 2008, the Web-based registry tallied 4,000 registered trips last year, 90 percent of which involved undergraduates.

"Registration is a requirement for going abroad, and the programs are responsible for ensuring that their students have registered," says Christy Michels, Duke's senior manager, global administrative policies and procedures. Compliance with the registry has become a component of the program audit process. In addition, Duke developed protocols regarding unanticipated departures from a foreign country and contracted with vendors to facilitate those departures if necessary.

Additional Advice

"Operating abroad is complex-it opens up a Pandora's box of issues and requires sober, thoughtful analysis and guidance to navigate safely around potential areas of concern," asserts Koff. Here are more suggestions for exercising campus leadership in the international arena:

Demonstrate the business office's value. Moon teams up with Carnegie Mellon's general counsel and chief HR officer to give presentations to faculty. "We talk about what we've learned, what they should consider, and how we can be a partner, not an obstacle, in developing international programs," Moon says. "We've now had enough success that some faculty even tell that story for us."

At UW, Riley tells her story on a Web site dedicated to global operations support; the content answers common administrative questions related to international work. This year, she plans to put the finishing touches on a how-to manual for operating abroad, and distribute it to academics.

UW's finance division definitely demonstrated its value several years ago, after an American student become seriously ill abroad and required medical evacuation back to Seattle. Even though the student had some insurance, the university found itself responsible for a $100,000 medical bill. At the time, a state law prevented UW from requiring students to have international health insurance when traveling abroad. Concerned about receiving more large bills in the future, says Riley, "We launched a full-scale lobbying effort in the legislature and, along with other universities in the state, succeeded in getting the law changed."

Establish an international committee. Granted, you may shudder at the thought of serving on yet another committee. Still, Lammey recommends setting up a committee to oversee and track international activities. With broad representation from administration as well as individual schools, such a committee helps maintain cohesiveness, consistency, and compliance across different international activities by developing universitywide strategies and policies. 

At Duke, Michels chairs the International Business Operations Group (IBOG), a problem-solving team with representatives from HR, security, IT, facilities, and finance. One spin-off of IBOG is a global finance committee that reviews how Duke spends funds abroad; another spin-off is an HR committee that addresses global employment issues.

"The HR committee spends a lot of time on policy issues, such as whether to pay K-12 tuition for family members, how to deliver medicine to faculty who are traveling, and how we compensate employees of a joint venture," says Cavanaugh. "With policies in place, we don't have to approach everything on a case-by-case basis." 

Gain firsthand experience. To better appreciate the obstacles facing faculty and students abroad, put yourself in their position—take a trip. Cavanaugh and Michels have traveled to China on Duke's behalf, so they are well aware of that country's visa requirements and now feel more comfortable with its culture when negotiating vendor contracts from afar.

On occasion, Carnegie Mellon dispatches someone from its international finance group to set up the business aspects of a foreign location, which may include hiring finance employees. Moon notes that dealing with banking and procurement issues is typically easier for someone who already knows whom to contact for assistance at the main campus.

Romali was among the first three people from HCC to arrive in Qatar, three months before the Community College of Qatar opened. Personally experiencing what was in store for later-arriving faculty and their families proved invaluable culturally, socially, and emotionally. Based on her own experiences and exploration, Romali designed orientation sessions that offered tips on housing, grocery shopping, local culture and customs, and other topics of everyday concern. "Because faculty and staff felt at home shortly after they landed, they acclimated quickly," she says. "It's difficult to see people as 'different' or 'other' when you understand more about them and their culture."

Reach out. Not long after arriving in Qatar, Romali connected with employees of American universities operating in the country. She recommends networking with expatriate communities, via their Web sites if not in person, and contacting other business officers for their insights into the complex issues stemming from overseas ventures (see sidebar, "Resources at the Ready").

And don't forget your alumni, adds Moon. Carnegie Mellon has a large population of international students, which translates into an alumni base just about anywhere the university thinks about operating. "It's a huge advantage to have alumni who can help us understand how to do business in their country and introduce us to the right people," Moon says.

Adjust your expectations. Certainly, protecting your university's brand isn't negotiable. That's why Carnegie Mellon, for example, adheres to the same student admissions and faculty hiring criteria at its main campus and in Qatar. Beyond that strategic priority, however, an international location may look and operate quite differently from its U.S. parent. "Assumptions common in the United States are not always the case in other countries," Moon cautions.

For example, she continues, some countries may prohibit a foreign university from owning real estate or even offering formalized degrees. Or they may require that money earned within their borders also be spent there. Benefits often become an issue, adds Riley, with workers in many countries accustomed to more elaborate benefits packages than those commonly offered in the United States.

In the case of the Community College of Qatar, its first campus educated both men and women. In keeping with Qatar's culture, Romali arranged for the installation of partitions to keep the genders separated. With the opening of its second location in January, the community college now designates one campus for men and one for women.

Smaller considerations come into play as well. Romali and her HCC colleagues in Texas have learned that Internet connections can be painfully slow and that telephone lines often go dead in the midst of conversations. Given the nine-hour time difference between Houston and Doha, those conversations are apt to take place outside of what Americans might consider normal working hours.  

Global Expansion

Complicated and expensive though they may be, international programs and projects will continue to expand, predicts Lammey. He identifies three driving factors: the availability of funds for sponsored research; student expectations that their education should include international experiences; and the global economy itself, which has increased the need for graduates who can operate comfortably in different cultures.

A business office that learns to operate in a different culture can duplicate much of its success with subsequent international opportunities, says Moon—with a caveat. "You can capitalize on your previous experiences," she notes, "but they aren't necessarily transportable from one country to another."

In other words, scrutinize every international opportunity by asking the same set of questions—but be prepared for very different answers.

SANDRA R. SABO, Mendota Heights, Minnesota, covers higher education business issues for Business Officer.

Resources at the Ready

Health care options in Haiti ... Independent contractors in India ... Taxes in Tanzania ... Where do you find information on such specialized topics when your institution wants to do business half a world away?

For starters, visit NACUBO's new International Resource Center (IRC). This online resource provides business officers with a wide range of information pertaining to global activities. The IRC is a collaboration among NACUBO, High Street Partners, the Consortium of Universities of Global Health (CUGH), the Association of Academic Health Centers (AAHC), the University Risk Management and Insurance Association (URMIA), and five business partners—CIGNA; Huron Consulting Group; Marsh; Wachovia, a Wells Fargo Company; and Whiteford Taylor & Preston. For instance, you'll find country-specific data, examples of institutions' policies, checklists, and tools, as well as myriad links and other useful resources.

The content, developed by High Street Partners in conjunction with NACUBO and eight committees consisting of representatives from institutions across the country, covers seven functional areas:

  • Cash management.
  • Legal considerations.
  • Human resources.
  • Finance.
  • Reporting and compliance.
  • Risk management.
  • Research compliance.

The site also has a section dedicated to supporting international  activities on the home campus. "As we incorporate feedback from users, the IRC will be expanded with additional content and interactive features," says Nancy Maguire, manager of the IRC. For more information, contact  her at

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