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Section 117: Ensuring Compliance Through Systems and Processes

The document discusses strategies that institutions can consider to ensure compliance with Section 117 regulations on reporting foreign gifts and contracts. It recommends establishing a governance committee and data stewards to oversee reporting. It also suggests leveraging technology to streamline data collection and reporting processes across the institution.

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Pallavi Reddy
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43 views3 pages

Section 117: Ensuring Compliance Through Systems and Processes

The document discusses strategies that institutions can consider to ensure compliance with Section 117 regulations on reporting foreign gifts and contracts. It recommends establishing a governance committee and data stewards to oversee reporting. It also suggests leveraging technology to streamline data collection and reporting processes across the institution.

Uploaded by

Pallavi Reddy
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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SECTION 117: ENSURING COMPLIANCE

THROUGH SYSTEMS AND PROCESSES


By Anne Pifer, Alex Faklis and Melissa Kwilosz

As scrutiny over gift funding The committee should consider including


broad and diverse representation, as well
increases, institutions are challenged
as faculty representation, from across the
to manage the complexity of institution, including administrative offices such
Section 117 reporting requirements. as legal, compliance and risk, the controller’s
Institutions should consider office, the central office responsible for
decisions regarding the systems reporting institutional information, and other
offices that accept gifts from and enter into
and processes in place to support
contracts with any source on behalf of the
compliance with this regulation. institution as mentioned in the next section.

To advance efforts in mitigating risk and the 2. Data management and collaboration:
potential for noncompliance or underreporting Understand data sources and assign
to the Department of Education, institutions data stewards across the institution.
may consider the following suggestions,
which may help develop a long-term There are likely many offices across the institution
strategic approach to institutional foreign gift that enter into contracts and/or receive gifts from
reporting and compliance with Department a variety of sources on behalf of the institution.
of Education Section 117 regulations. Visibility into the gift and contract activity
through centralized oversight and collaboration
1. Governance: Establish an institutionwide
can ensure these sources (and potential points of
gift and contract acceptance committee.
risk) are appropriately cataloged and reported.

Governance includes both the system and the Establishing a position responsible for
processes by which an organization is directed, data ownership and compliance (i.e., data
controlled and held accountable. The institution’s steward) within each of these distributed
gift and contract acceptance governance offices will enhance transparency, improve
committee will create the rules and boundaries collaboration, guarantee appropriate
within which continual evolution can take place. data collection, and continue to advance
The committee must be granted the authority to the institution’s compliance plan.
create a leadership structure, define and establish
roles and responsibilities, guide the direction of As a representative on the governance committee,
gift and contract acceptance with the institution’s the data steward will manage communications
best interests in mind, and hold the institution and knowledge sharing between the office
accountable for adhering to enacted standards. and the governance committee to safeguard
awareness on both sides. This dual approach
SECTION 117: ENSURING COMPLIANCE HURON | 2
THROUGH SYSTEMS AND PROCESSES

of transparency and oversight will ensure that information from distributed systems across
gift and contract source naming standards are the institution for activities such as reporting
met to accurately aggregate gift and contract on Section 117, leaders should focus on
totals to comply with the $250,000 threshold. opportunities that increase efficiency and
reduce risk via integrations. If cloud-based
3. Information systems: Leverage technology to systems are a possibility, additional benefits
reduce risk and simplify the reporting process. such as collaboration functionality, work-from-
anywhere capabilities and powerful in-system
Technology can offer solutions to mitigate risk reporting tools may also reduce response time,
and streamline the data collection and reporting increase accuracy and mitigate additional
process. Once governance for the appropriate risks with regulatory reporting requirements.
identification of foreign sources, the recording
of entity information (e.g., naming standards, Conclusion
aliases, global IDs, etc.), and determining gift
and contract values has been established, Given potential legislative changes to Section
mechanisms for easily coding records, aggregating 117, institutions may well have to replace
information and creating reports can be built. familiar ways of recording and tracking foreign
gift acceptance and contract reporting. To
Institutions are already leveraging technology meet these increasing demands and ensure
for the management of gifts and contracts, compliance, institutions can develop a long-
though opportunities exist for technology term and intentional strategic approach by
to resolve systemic challenges and reduce considering the following key questions:
the administrative burden when reporting
on these institutional activities. • Have we identified all foreign sources
of income at our institution?
• Data collection: As mentioned, functionality
• Do our gift intake forms allow donors
(e.g., granular security and privacy features,
to declare their international status?
customizability, etc.) for appropriate data
collection may cause some institutions to • Does our institution have a foreign
develop workarounds and out-of-system campus or satellite location?
solutions to record relevant donor information
when their core systems cannot accommodate • Are there effective gift and contract
their needs (such as tracking anonymous governance mechanisms in place to
donors). This could have unfavorable impacts, simplify data collection and reporting?
including significant manual reconciliation
• Have we identified a central coordinator to
and analysis of reports when aggregating
collect foreign gift and contract information
information from distributed systems.
across the institution for reporting purposes?
Modern information systems enable robust
configuration capabilities, mobilizing • Do our information systems adequately support
enhanced security of donor information, our efforts to efficiently and effectively capture
and allow institutions to track and report on and report our institutional data assets?
relevant information within the system.
• Are our current management systems
• System integration and reporting: More able to adapt to unforeseeable
capable information systems can facilitate changes of existing regulations?
centralizing and digitizing operations into a
single platform to support real-time, dynamic
reporting processes. When aggregating
SECTION 117: ENSURING COMPLIANCE HURON | 3
THROUGH SYSTEMS AND PROCESSES

Foreign gift reporting is just one component


of a larger conversation. Higher education’s Key Takeaways
leaders should also be discussing their
To develop an effective plan to anticipate and
institutions’ compliant engagement with
ensure compliance with Section 117, institutional
international business partners and broader
leaders should:
participation in foreign activities. In addition to
foreign gift and contract reporting, managing a
Think differently.
comprehensive, institutionwide foreign influence
Understand that current systems and
compliance program should present institutions
processes may need to be replaced, enabling
with broad capabilities for administering
the institution to readily respond to more
other gift and contract-related activities.
rigorous standards of reporting.

Huron has collaborated with many institutions Plan differently.


to develop strategies to address their business Proactively develop a long-term strategic
operations and compliance challenges. We approach to institutional foreign gift reporting
leverage our consultants’ depth and breadth of and compliance with the Department of
expertise in higher education operations from Education Section 117 regulations.
across our organization to optimize our approach
to each institution’s specific needs. For more Act differently.
information on foreign activities in research, visit Establish and empower an institutionwide gift
our Research Compliance Resource Library. and contract acceptance committee.

huronconsultinggroup.com
© 2021 Huron Consulting Group Inc. and affiliates. Huron is a global consultancy and not a CPA
firm, and does not provide attest services, audits, or other engagements in accordance with
standards established by the AICPA or auditing standards promulgated by the Public Company
Accounting Oversight Board (“PCAOB”). Huron is not a law firm; it does not offer, and is not
authorized to provide, legal advice or counseling in any jurisdiction. Huron is the trading name
of Pope Woodhead & Associates Ltd.

21-2403

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