Invoicing and Replenishment
Purpose
The purpose of this policy is to assure sound bank balance management and liquidity for the Maryland Global Initiatives Corporations (MGIC) by ensuring timely replenishment of payments financed through MGIC.
Background
MGIC is a mechanism through which the University of Maryland, Baltimore (UMB) and constituent institutions of the University System of Maryland (USM) (hereafter referred to as Affiliate Entities and collectively as “UMB/Affiliates”) can effectively conduct business outside the United States. The MGIC finance function supports this purpose by processing payments from its bank accounts to foreign vendors, service providers, research collaborators, and other parties in a prompt and equitable manner that mitigates institutional risk, promotes compliance with applicable laws and regulations, and reflects sound partnership principles in alignment with UMB’s Core Values.
MGIC finances payments on behalf of UMB/Affiliates through corporate bank accounts that maintain a positive cash balance. MGIC therefore depends on timely replenishment of expensed funds by Requesting Units in order to continue providing effective financial services to UMB and Affiliate Entities. This policy on Invoicing and Replenishment describes the requirements and expectations of users and administrators of the MGIC mechanism to protect this critical resource.
The MGIC mechanism is administered by the International Operations (IO) division of UMB’s Administration & Finance department. When an MGIC service is performed for the benefit of the IO division rather than for another UMB or Affiliate Entity unit, IO also functions as the Requesting Unit.
Policy Statement
- Following each financed payment, IO shall issue an MGIC Invoice with applicable supporting documentation, for the Requesting Unit to replenish the MGIC bank account. Each MGIC invoice will include applicable tax withholdings and bank fees associated with the payment.
- When MGIC payments are made on behalf of Affiliate Entities, IO shall generate an inter-university transfer request to include the invoice amount due to MGIC as well as the applicable IO Service Fee established in the MOU.
- Requesting Units shall timely process each MGIC Invoice following UMB procedures for Non-PO supplier payments or Affiliate Entity procedures for inter-university transfers.
- MGIC may issue a proforma invoice to request an advance from the Requesting Unit when the anticipated financed payment will be very large relative to the MGIC bank balance, or when the contractual terms of payment threaten MGIC cash flow. Funding advance and liquidation procedures and accounting treatment shall be described in MGIC standard operating procedures.
- IO will escalate overdue replenishments to MGIC leadership as necessary for resolution. Should extreme and repeated delays in processing MGIC invoices by a Requesting Unit create a cash flow risk to MGIC, IO may, in consultation with the MGIC President, suspend future MGIC support to the Requesting Unit.
Scope
This policy applies to all UMB personnel and affiliates involved in the MGIC invoicing and replenishment process.
Responsibilities
- IO Finance: Prepare and submit MGIC invoices, track and record receipts, maintain accurate MGIC accounting records, manage MGIC liquidity, and produce accurate MGIC financial reports.
- Requesting Units and University AP/Disbursements departments: Process invoices for advance and replenishment payments through applicable system platforms, comply with UMB or Affiliate Entity payment procedures, track submitted payment requests, address and resolve holds and rejected transactions, and reconcile project/department budget and expense records.
Procedures
See MGIC Standard Operating Procedures
Documentation Requirements
- MGIC Invoice or Pro Forma Invoice
- Supporting documentation package (see Finance SOP for contents)
- Quantum or equivalent customer platform Payables records
- MGIC QuickBooks accounting records
- MGIC approved financial reports
References
n/a