14.4 Manage Foreign Bank Accounts
Policy Statement
The Vice President, Chief Financial Officer & Comptroller is the signer on all bank contracts and accounts, as authorized under the General Rules Concerning University Organization and Procedure. Foreign bank accounts are most commonly opened to facilitate the operating requirements of study abroad programs, overseas research, and other activity consistent with the University of Illinois System’s mission in foreign countries. The Comptroller delegates Cash Management to be the initial contact in determining the need for a foreign bank account. The Comptroller approves the opening of bank accounts to obtain the required on-site goods and services.
Every bank account must be established in the name of the Board of Trustees of the University of Illinois. If a country’s banking rules (or other compelling reasons) prohibit establishing an account in the Board’s name, the unit may work with Cash Management to determine a reasonable naming convention. These chief business officers determine and publish rules and procedures for the advancement, use, and safety of foreign bank funds. These funds are not to be commingled with any other funds.
Bank accounts are funded from operating funds available to the unit responsible for conducting the overseas program. Foreign bank accounts are subject to audit at any time by the Offices of University Audits.
Procedure
Banking in other countries is different from U.S. banking, you will need to allow extra time to open a bank account in another country. To manage foreign bank accounts, the program director must:
- Consult with Treasury Operations, Cash Management. They will help you determine the best strategy to navigate the complex foreign banking laws and assist in obtaining Board approval, if necessary. Cash Management, in working with the unit, reports the opening of a foreign bank account to University Accounting and Financial Reporting and, if necessary, other CFO units.
- Instruct the bank to provide two copies of statements and other official correspondence: one for University Accounting and Financial Reporting and the second copy for the program director. The director will need this information when submitting requests for expense reimbursement. If the circumstances of your program require a different arrangement, contact Treasury Operations, Cash Management.
- Manage the bank account responsibly.
The director is liable for and must repay any money lost because of inadequate precautions or improper use. The unit providing the original funding is responsible for money lost due to circumstances beyond the control of the director.
In operations where only one person is available to sign checks, the requirement for two signatures on checks may be waived by Cash Management.
- Ensure that bank account transactions are made only for disbursements that are reasonable and proper for the program.
The bank account balances may be replenished as necessary, but not for amounts greater than the original authorized amount and only upon receipt of proper documentation of expenditures.
- Reconcile the account at least monthly. Forward a copy of each reconciliation to University Accounting and Financial Reporting when completed.
In some cases (such as non-advance accounts where foreign currency receipts are deposited directly into the bank account), the system may require that bank statements be sent directly to University Accounting and Financial Reporting and/or that reconciliations and posting transactions be performed centrally.
At the end of the calendar and system fiscal year, CFO units may also need additional, ad hoc information about the account, to fulfill state or federal requirements.
- Submit tax forms to meet requirements of federal authorities.
In limited circumstances (see Exception below), the University is required to file Form FinCEN 114, Report of Foreign Bank and Financial Accounts (FBAR) with the Financial Crimes Enforcement Network (FinCEN) Bank Secrecy Act (BSA) E-Filing System . Treasury Operations, Tax Compliance and Analysis is responsible for completing and e-filing the FBARs on behalf of the University. They request the required information from the unit to complete the FBARs and ensure timely filing.
FBAR Reporting Requirements: Each individual, partnership, corporation, limited liability company, or fiduciary subject to U.S. jurisdiction, who has a financial interest in, or signature authority over a bank account, securities account, or other financial account in a foreign country in which the aggregate value of the foreign financial account(s) exceeds $10,000 at any time during the calendar year, may be required to file an FBAR, through the FinCEN (BSA) E-Filing System.
Signature authority is the authority of an individual (alone or in conjunction with another individual) to control the disposition of assets held in a foreign financial account by direct communication to the bank or other financial institution that maintains the financial account.
FBAR Exception: Foreign financial accounts of any governmental entity of the United States, which includes a college or university that is an agency of, or instrumentality of, owned by, or operated by a governmental entity are excluded from the FBAR reporting requirements. The system or individuals with signature authority on system-owned (excluding University Related Organization (URO) accounts) foreign financial accounts are not required to file FBARs. See additional individual filing requirements below.
As of January 1, 2022, Illinois Global Gateway, LLC (formerly UI Singapore Research, LLC) is the only URO required to file a form. This form must be e-filed on or before April 15th of the subsequent calendar year. Contact Tax Compliance and Analysis for additional information to request the University to submit the form on an employee's behalf.
Individual Schedule B Reporting Requirement: Regardless of whether employees are required to file FBARs, employees who have signature authority on system-owned foreign accounts are required to complete Schedule B Part III on Form 1040 or 1040A. For reporting requirements on foreign accounts not owned by the system or a URO, the system recommends that employees consult with their tax professional.
* A foreign country includes all areas located outside the United States, Alaska, Hawaii, and all United States territories, possessions, and entities with free association status.
Form FinCEN 114, Report of Foreign Bank and Financial Accounts (FBAR)
8.2.1 Request Reimbursement for Domestic or International Employee Travel and Business Meals
14.2 Open or Close a University Bank Account
Financial Crimes Enforcement Network (FinCEN) Bank Secrecy Act (BSA) E-Filing System
Last Updated: February 21, 2022 | Approved: Senior Associate Vice President for Business and Finance | Effective: November 2010