Cost Object Set-Up (Cost Centers and Internal Orders)
To meet IRS reporting of expenses for activities conducted in foreign countries, all cost objects need to be identified by country and activity type.
A separate cost object is needed for each foreign country and activity type for an award or program. Expenditures charged directly to an "in-country" cost object should be for costs in that country including:
- Salaries for employees working in-country (note)
- Fellowships to students in-country
- Lease or rent payments for in-country space
- Independent contractors working in-country
- Subcontractors/sub-recipients in-country
- Equipment shipped to the country
- Other expenses for in-country activities
Note: For University employees who usually work in the US, salary expenses should be charged to an in-country cost object only if the duration will be more than 90 days in a fiscal year.
Each cost object must have an activity type. Five are provided in the chart below.
|01||Program Services||Instruction, research, clinical practice, auxiliary enterprises, libraries, student services|
|02||Fellowships||Fellowships awarded to individuals in country|
|03||Fundraising||In-country fundraising (development) expenses|
|04||Unrelated Trade Or Business||In-country activity that is not related to the University's mission (contact the Tax Office to discuss, firstname.lastname@example.org)|
|05||US Based Activity||Used for activities conducted in the US; country is US|
For each new cost object, the country and activity type must be identified. For activities in the US, use US based activity type.
If you have questions, please contact the Tax Office at email@example.com.