Occasionally the only option for an award will be in a foreign currency. The Office of Sponsored Programs (OSP) uses the following procedures and guidelines regarding award acceptance and to determine the U.S. dollar (USD) value of agreements made with foreign currency.
Reason for Procedure: Minimize foreign exchange risk to the University and identify responsibilities for the Office of Sponsored Programs (OSP), Sponsored Financial Services (SFS), and university units.
OSP Responsibility: Be aware of risks involving the acceptance of agreements with terms in foreign currency, and negotiate with the sponsor to obtain the most favorable terms to mitigate such risk. Clearly identify the currency and exchange rates used for award valuation in RASS.
SFS Responsibility: Issue invoices in accordance with the award, clearly identify the currency on the billing invoice, revalue the unexpended authorized portion of the award when foreign currency payments are received, and notify OSP to update award value in RASS.
PI/Unit Responsibility: Monitor the award as appropriate to minimize the risk of currency fluctuation. Accept responsibility for any shortfalls, or benefit from any gains in the awarded amount, due to the foreign exchange rate.
OSP should negotiate with the sponsor to set the agreement amount in U.S. dollars (USD) prior to final acceptance, whenever possible. If the sponsor will not convert the agreement to USD, advise the PI of the possible risks and:
- Negotiate to set payment terms as "payment in full upon execution of the agreement." This will allow for a one-time currency exchange and reduce risk and possible loss of dollars; or
- Negotiate to set terms for a schedule of payments, remembering to obtain as much up front as possible to reduce risk due to fluctuation in the exchange rate; or
- Negotiate for monthly, quarterly, etc., reimbursement of costs. The exchange rate used would be the rate current at the time payment was received from the sponsor.
Record the award in RASS at the USD value obtained from the Oanda Currency Converter at the time of execution.
SFS will validate the conversion of the agreement to USD, regardless of the method of payment, at the time an account is established using the Oanda Currency Converter. The agreement amount will be subsequently revalued at the time of each payment, and the PI/Unit is responsible for any shortfall or benefit from any gains. SFS will notify OSP of any fluctuation in the agreement amount.