Foreign Currency
91´«Ã½Ìýis participating in an increasingly global world, which has many positive benefitsÌýbut also creates some challenges. One of those challenges is accepting payment in a foreign currency.
Accepting an agreement in a foreign currency creates foreign currency exchange risk for 91´«Ã½. To address this risk, a foreign currency reserve will be required as a budget line item (along with bank transaction fees) for all sponsored projects where payment is anticipated to be made in a foreign currency.
The Office of Contracts and Grants (OCG) Proposal Analyst will budget an estimated amount during the proposal stage. The OCG Grant or Contract Officer will attempt to negotiate favorable language during the agreement review. Such language may include:
- Payment in U.S. dollars (removing the foreign currency risk)
- Advance payment of all funds
- An accelerated payment schedule to reduce the risk
- Sponsor assumption of the risk where an increase in the foreign currency costs relative to the U.S. dollar would result in an increase in the award value
The Campus Controller's Office Cash Management Accountant will provide information about cash receipts compared with the budget.
While these actions are attempts to mitigate the risk, the Principal Investigator and the department are ultimately responsible for the project (including financials). The decision to accept such an agreement will require an acknowledgment of the responsibility for this risk by completing a Foreign Currency Risk Acceptance Form. This form needs to be signed by both the PI and the appropriate Chair, Dean, Director, or Associate Dean of Research.