Completing UBI Reports for Northwestern University Core Facilities

January 2022 Core Facilities Brown Bag Jan 28, 2022

Agenda Announcements UBIT NUcore Updates Annual Reports Equipment Grants External Business 1

Announcements Sheren Jasim has left CFA Continue to use CoreFacilities-Office email address. S10 Letters of Intent Due February 7th Note that his announcement is for 3 years Internal Grant / ReLODE proposals due February 10th 2

UBIT Announcements 3

Understanding Unrelated Business Income (UBI) Presented by Yan Qiu Core Facilities Administration

What are the benefits of completing the UBI report? Completion of UBI templates saves cores $ For FY20 ~$4.5M gross income reduced to ~$1.5M in taxable income and only ~$128K UBIT paid Prepares cores for an audit Maintain documentation of receipts and cost basis must be auditable If NUcore matches NUFinancials for receipt dates and cost study information matches NUcore, a strong audit trail exists Make sure CRT s are reconciled in NUcore in same FY as received in NUFinancials (preferably same date) Limited corrections can be made in NUcore by un-reconciling and re- reconciling with correct date 5

Who needs to complete the UBI report? Any Northwestern University Recharge Center that collected any revenue from External Users in FY21, including academic, government, hospital-affiliated, and commercial External Users. 6

Why is research revenue from External Users subject to federal and state taxation? Northwestern is required to annually report its UBI to the IRS Certain states in which Northwestern operates is required to file state corporate income tax returns also charge state taxes on UBI. 7

What do you need to complete the UBI report? Accurate and reconciled financial data for FY21 revenue from External Users Answers to the qualitative questions for each revenue line in the report 8

What type of transactions should be included on the UBI report? Include all revenue transactions from External Users deposited in the reporting fiscal year. Do include payments for work started and/or completed in the previous fiscal year and collected in the reporting year. Do Not include payments for work started and/or completed in the reporting year but Not collected in the reporting year. 9

Why is the UBI report important? Without complete qualitative responses, all net income from your Recharge Center s External Users in FY21 will be taxed at the 21% federal UBI tax rate plus state UBI tax rate. 10

What changed from FY20 tax reporting? Cost basis can include F&A UBIT rate is 21% Calculation template change Cost basis tied to Cost Study Information provide in FY21 Cost Study used to link NUcore service lines to Cost Study lines Core must manually identify passthrough or cases where no link found in cost study 11

Important Deadlines NUcore and NUFinancials should be reconciled by 02/09/2022 Report needs to be reviewed, filled out and returned to CFA by 03/11/2022 CFA will be turning data over to Tax a Regulatory Services on 03/25/2022 If NUFinancials exceeds documented revenue in UBI sheet, a line will be added with the difference and assumption is that receipts will be taxed at highest UBI rate 12

Need Help? General questions: Yan Qiu (yan.qiu1@northwestern.edu) Tax questions: Shereen Olickal (shereen.olickal@northwestern.edu ) NUcore questions: nucore@northwestern.edu 13

Questions?

NUcore Updates NUcore Updates 15

Annual Reports Timeline Annual User Survey to be released Jan 31st Narrative instructions posted by March 1st Dashboards posted by March 1st https://tableau.northwestern.edu/#/site/OR/projects/551 Security taken from Directory Document Chart in NUcore are interactive Feedback on dashboards welcome Reporting year ends March 31st Reports will be due May 2nd Firm deadlines Changes from 2021 Report/2022 Request Continue to reduce requests for information that can be obtained elsewhere FSM requests remain same OR requests to be clarified to match awards provided in FY2022 Seeking to partner in strategic investments (training, technique development) Only funding requests that change research activities Not funding financial only requests Not funding requests to pay for activities already underway 16

Annual Reports SWOC and Goals Feedback Strategic planning is improving Understandable that focus remained on operational recovery Still a trend to carry over goals year to year Goals for this discussion are projects that have a beginning and end date and address a need of the core. Goals changes annually. Deliverables are not covered in this section but are addressed by examining the mission statement, user survey, budget, and activity. Deliverables remain relatively constant. Focus on actionable items Unless your organizational unit provides alternate guidance, finance focus should be on hitting FY2022 projections and achieving a balance FY2023 budget 17

Annual Reports SWOC Question Examples Strengths What are foundations that you can use to build projects upon? Opportunities Do you have excess instrument/service/training capacity? Are there new communities that require your core s services? Are there technologies or processes that will give Northwestern PI s a competitive advantage when completing research New grant or funding source? What are metrics that show continued excellence? Weaknesses Were issues raised in the annual user survey? Are there capabilities that are needed by users, available at other institutions, and lacking here? What are bottlenecks and roadblocks for completing work needed by faculty? Challenges Are there disruptive changes on the horizon (loss of space, instrument EOL, loss of users, technology shifts, new competitors in the market) Are there changes in regulations or requirements on the horizon? 18

Annual Reports Goals Ask: If completed, can it make a lasting and important change? Do you have control over the goal or is it the goal the outcome? FY2021 & FY2022 Goals as Reported in FY2020 Progress/Accomplishments Against Goals Data that Indicate Success Conduct 2 equipment grant competitions Completed one grant competition in Fall and ReLODE in Summer. Awarded $1.2M in Grants/ReLODE Replace NITRO grant submission system Pilot Smartsheet Form based submission and scoring tool. Positive feedback from reviewers. Reduced time vs NITRO. Enable user level security. Data that Indicate Success Short-Term Goals (present through FY2023) Planned Activities Ensure continued public access to core capabilities Transfer website from WordPress to new platform where capabilities can be updated easily. Capability must be searchable using NU and Google tools. Data to populate must be available from existing sources or with <2 hrs/year effort / core Increased grant awards Increase funding for equipment Write grants for equipment 19

Equipment Grants Fall Second round using Expert Reviewer written review and leadership prioritization Funded $695K in requests (17 / 20) 4 Proposals converted to ReLODE Heavy scrutiny on the justification for ReLODE What is primary driver for project? Covert to ReLODE Usage dominated by existing users without clear demonstration of need for the upgrade Keep as Grant New users would justify upgrade on their own and proposed system has capacity to handle both new and existing experiments Replacement, but keep as grant Avoid focus on percentage rate increase. A 5- 10% rate increase is typically acceptable to PI s if average PI s usage is $10- 20K /year but a 50% rate increase is likely acceptable for PI s using $1,000/year. 20

Equipment Grants Spring Total funding dependent on quality of proposals and external factors ReLODE may award in FY22 or 23 All Equipment awarded in FY22 must be received in FY22 or FY23 budget will be reduced Verify terms in PO s Expect short window between award notice and PO deadline Feb 10th submission date is firm 21

External Business Last major review of external business was in 2014 Current system is highly decentralized NUcore, LSA, Visitor s Agreement not linked. Document have different owners Information on websites is not consistent Some requirements are out of date CFA planning update the process Timeline TBD CFA seeking feedback on the process until 2/10. Until a formal change is announced, continue to operate as you have been with one exception: If a PO is required by a requestor, there must be an LSA covering terms 22