CPO UNIVERSITY

High Technology Tax Deferral

Audits

CPO Accounting Process Update

Presents

CPOCPO

September 15, 2011September 15, 2011

High Technology Tax High Technology Tax DeferralDeferral

Overview

State tax incentive allowing deferral of sales tax on certain costs

Building or location must be used for qualifying research

Qualifying research

Advanced computing, Advanced materials, Biotechnology, Electronic device technology, Environmental technology

Overview

Application MUST be submitted before issuance of the building permits for the project

Generally only projects with qualifying costs exceeding $1M will be considered

Tax deferral becomes permanent after 8 years

Roles and Responsibilities

Financial AccountingProject ManagerCapital ProjectsSchools (Client)Funding Agent

Risks and challenges

Challenge to UW assumptions during audit reducing qualifying space

Usage changes from qualifying to non-qualifying

Refund process

Annual Survey

Examples of Qualifying Projects

Primate Center Health SciencesHealth Sciences Center H-WingHealth Sciences Center I-WingBagley Hall/PhotonicsMRI Replacement – Health Sciences

CenterBen HallGenome Sciences Building

Questions?

Tax Office -Julia Shanahan

Telephone: 206-616-3003

E-mail: jeshana@u.washington.edu

Financial Audits – an Overview

What is a financial audit?Who audits CPO?What are the types of audits?What are the auditors looking for?When are audits performed?What is the audit process?How can CPO staff assist with the audits?

What is a Financial Audit?

In general, a review of financial documents or statements to determine their accuracy.

It may be a review to determine if the UW Financial Statements are fairly stated in accordance with GAAP (generally accepted accounting principals) or a review of one specific project or item.

Some Entities that Audit CPO:

Public Accounting Firms (such as KPMG)UW Internal AuditWashington State Department of RevenueFEMAWashington State Auditor’s Office

Some Types of Audits

Audits related to the UW or UW self-sustaining entity Financial Statements

Audits of an individual project with FEMA or other specific funding

Audits of an individual project applying for High Tech Sales Tax Deferral

Audits of a specific item, such as change orders

What are the auditors looking for?

It varies depending on the type of audit - each audit is unique.

When there is a large volume of transactions usually the auditors will

test a sample of transactions.

What can CPO staff do to help the audits go smoothly?

Follow established procedures for review and approval, and make sure that signatures are legible.

Be aware of special requirements for specific projects and make sure they are followed.

Maintain all required documentation, and file documents properly.

Respond to requests when additional information is needed for audited items.

Workflow

Invoice Receipts & Payments

Invoice Receipts & Payments

Set up

• Budget Funding• Purchase orders

Set up

• Budget Funding• Purchase orders

Project Assignment (Tracker)

• CPOA Staff

Project Assignment (Tracker)

• CPOA Staff

Project Completion

• P.O.’s liquidation• Close out

Project Completion

• P.O.’s liquidation• Close out

Process UpdatesI. Set ups and Adjustment

• Budgets/ Funding Transfer

• Purchase Orders/ Change Orders/ Additional Services

II. Payments & Billing

• Invoices/ Procards/ Eprocurement

• Cost Transfer (CTI) & Internal Sales Document (ISD)

• Journal Voucher (JV’s)

• CPO fees Billing (internal/ external)

III. Liquidation and Closeout

• P.O.’s liquidation

• Reconciliation (P.O.’s/ Project)

• Returning Funds Balance & Budget Closeout

• Special tasks/ Matrix/ Storage/ Retrieval:

Jaime & Kiki(Students)

• Budget set up & closing/ Funding Information:

Vina Lorenzo

• Purchase Orders/ Invoices/ Reconciliation:

Gilda Franada/ Kazuko Stoesz/ Ann Cronin

• CPO Billings (Internal/ External/ Special Projects):

Leslie Holmes

Staff:

• CPO Accounting email address:

cpoactng@uw.edu

Q & A