MGIC - Use and Administration of MGIC

Use and Administration of MGIC

Purpose

The purpose of this policy is to ensure adherence by users and administrators of the Maryland Global Initiatives Corporation (MGIC) to the intended use of the MGIC mechanism, as described in its Governing Documents and in compliance with U.S. and foreign laws applicable when the mechanism is used in the U.S. operating context.

Background

MGIC was established by the University System of Maryland (USM) Board of Regents as an affiliated business in 2009 to facilitate academic affiliations, experiences, and research activities by the University of Maryland, Baltimore (UMB) outside the United States. As stated in the Board of Regents’ authorization, “the State of Maryland’s administrative, human resources, procurement and financial systems are not intended to support and are not adaptable to operations in foreign countries.” MGIC therefore enables UMB to mitigate institutional risk, comply with applicable laws and regulations, and reflect sound business and partnership principles in alignment with the university’s Core Values and strategic priorities and advancement of its global mission to improve the human condition.

In 2025, the Board of Regents authorized UMB to use the MGIC mechanism to provide international procurement, finance and human resources services to other USM institutions, thereby extending the benefits of MGIC to support constituent universities’ global activities. UMB and another USM constituent institution may sign a Memorandum of Understanding (MOU) to provide MGIC services through a service center arrangement. For purposes of all MGIC policies, the USM constituent institutions and their faculty, staff, and students using MGIC services under such MOUs are referred to as UMB affiliates or Affiliate Entities.

When required for the implementation of sponsor awards, MGIC has registered as a legal business in certain countries to permit a robust, long-term physical presence and operational capacity, including large teams of local personnel, leasing or purchasing of facility assets and capital equipment, establishment of local bank accounts, and engagement of ongoing business contracts. In such cases, UMB personnel and affiliates who use or administer MGIC follow MGIC policies adapted specifically for registered Country Offices to enable efficiency and align with business customs in foreign jurisdictions. MGIC’s Country Office-specific policies apply when this operational model is active.

When long-term physical presence in a foreign country is not required, MGIC is utilized on a transactional basis to acquire and pay for goods and services through its U.S. bank accounts and with the contractual authority of the U.S. based Board of Directors. This model is colloquially referred to as MGIC USA, and MGIC policies specifically associated with this model are referred to as MGIC USA policies.

MGIC’s policies and procedures have been approved by the MGIC Board of Directors. The International Operations (IO) division – a unit within UMB’s Administration & Finance Department – administers MGIC and executes MGIC activity on behalf of the MGIC Board of Directors.

Policy Statement

1. MGIC may be used to register as a legal business entity in countries outside the United States when UMB or an Affiliate Entity requires a robust operational presence (i.e. a Country Office) for large-scale, multi-year program delivery. This operating model is not currently employed by MGIC and sits outside the scope of this policy as of 2026.
2. MGIC may be used for punctual business transactions on behalf of UMB or an Affiliate Entity (hereafter shortened to UMB/Affiliate), in the capacity of a supplier of services, through its U.S.-based business model administered by the IO division of UMB. Under this operating model, MGIC may be used in the following situations:
   • To purchase and pay for goods and services for Requesting Units, including honoraria, stipends, and royalties, from non-U.S. vendors and collaborators who require payment to a foreign bank account. MGIC may route wire transfers to foreign bank accounts through U.S. intermediary banks when the foreign bank does not accept direct international wires. Otherwise, MGIC may not be used for payments to domestic (U.S.) bank accounts on behalf of Requesting Units except with the prior authorization of the MGIC Controller.
   • To purchase and pay for services for MGIC from non-U.S. or domestic (U.S.) vendors. Payments to U.S. bank accounts are only permitted when the expense is for the benefit of the MGIC corporation rather than a Requesting Unit; for example, U.S. legal counsel and tax advisory services.
   • To purchase discrete goods and services directly for UMB/Affiliate under sponsored awards, but not on behalf of UMB/Affiliate sub-recipients (see below).
     • To engage personnel outside the United States through a global Employer of Record (EOR) service provider. These are referred to throughout all policies as MGIC employees or MGIC personnel
   • EOR master services contracts are for the benefit of the MGIC corporation; therefore, MGIC employee payroll may be paid into a EOR’s U.S. bank account.
   • To make payments to MGIC employees following MGIC policies for travel advances and reimbursements and other approved business expenses.
   • To transfer UMB/Affiliate discretionary or private grant funds to a payee under the terms of an internal Funding Agreement or other equivalent partnership instrument that is not funded through a sponsor award.
   • When the transaction customs in a country do not align with UMB/Affiliate’s requirements; for example, when the foreign vendor is unable or unwilling to accept UMB/Affiliate’s standard contractual terms and conditions, or when the foreign vendor is unable or unwilling to comply with State payment requirements.
   • When the action or transaction poses a threat of potential or actual liability to UMB/Affiliate or the State of Maryland outside the US, or if there are other major risks or costs that make it unwise for UMB/Affiliate to take an action outside the US. For example, compliance with foreign government regulatory reporting requirements concerning taxation, duties, and financial assets.
3. MGIC may not be used in the following situations, except as authorized on an exceptional basis by the UMB Controller or the MGIC President:
   • To procure or execute sub-agreements or pay sub-recipients under UMB/Affiliate sponsor awards.
   • To procure goods and services on behalf of a UMB/Affiliate sub-recipient.
   • To make payments directly to UMB or Affiliate personnel, i.e. faculty, staff, contingent employees, or enrolled students. Note: this prohibition does not apply to MGIC employees, to whom MGIC may make payments directly for approved business purposes.
   • To make payments to U.S. bank accounts or U.S. based financial institutions or branches on behalf of Requesting Units. MGIC may only send funds to U.S. institutions for the direct benefit of the MGIC corporation.
4. Should a dispute over the allowability of MGIC services, applicability of MGIC policy, or compliance with MGIC requirements arise between the administrators of MGIC and a Requesting Unit of UMB or an Affiliate Entity using MGIC services, the MGIC Board of Directors shall have ultimate decision-making authority.

Scope

This policy applies to all UMB personnel and Affiliates who use or administer MGIC.

Responsibilities

1. International Operations Division: Administer MGIC policies and procedures and execute MGIC activity in line with those requirements.
2. MGIC Board of Directors: Approve MGIC policies and accept PAAs for MGIC. Coordinate with School or constituent university leadership and represent MGIC interests to ensure coherence, compliance, and sound risk management in the use of the MGIC mechanism.
3. UMB Controller and MGIC President: Approve or deny exceptions to this policy as required.
4. Requesting Unit Principal Investigators, Project Directors, Administrators and finance staff: Follow MGIC policies and procedures.

Documentation Requirements

• MGIC Board of Directors resolutions and delegated policy exceptions
• MGIC procedural forms and required supporting documentation for services as described in specific policies

References

USM Board of Regents Authorization

Memoranda of Understanding (MOU) for MGIC Services