Flint Campus 2:00 to 3:30 Friday, October 15, 2010

1. Flint Campus2:00 to 3:30Friday, October 15, 2010 Update of Cell Phones and Other Technology Tools Finance-Tax department - DRAFT

2. Agenda It is a bad plan that admits of no modifications – old proverb. • Revisit Policy on Technology Tools • Process Update • Goal and Characteristics • Next Steps and Target Dates Finance-Tax department - DRAFT

4. Revisit Policy: Tax a non-factor. • Current Events: On the Hill • In the Small Business Act, Congress recently changed the law regarding the tax treatment of cell phones and other remote technology by reducing the level of substantiation required to receive tax-free treatment. • However, Congress delegated authority to the IRS to define specific substantiation requirements. • Previously, the IRS issued a notice requesting comments on certain approaches. • We anticipate guidance in the near future. Finance-Tax department - DRAFT

5. Revisit Policy: Focus on University needs • Taxes aside, feedback is as follows: • Units want a simple policy with clear guidance as well as ‘teeth’ to support their positions but flexibility and incentive to serve the faculty. • Finance and Provost want a financially efficient and cost-effective policy. • Manifest prudent fiscal stewardship by funding exclusively those efforts which directly benefit UM’s mission. • Our philosophy - to provide employees with mobile technology tools that ameliorate communications and promote the mission of the University. • Our goal – implement a policy using the (4) corners of fairness and effectiveness: • Simplicity, consistency, fiscal prudence and flexibility. Finance-Tax department - DRAFT

6. Process Update • Finance met with stakeholders individually to explain revisions and to have representatives appointed to a working committee. • Stakeholders include Provost, Medical School, Hospital, BAG Representatives (Engineering, LSA, and School of Business), Athletics, AVPF, Development and ITS. • Working committee is in the process of vetting certain issues. • Members include: Ruth Addis, IT; Glenna Schweitzer, Provost; Jim Murdock and Shane Fortune, Bus. Sch.; Virginia Wait and Leigh McGrath, Engineering; Robin Sarris, LSA; Karen Lang, Med. Sch.; John Ellison, Hospital, Jim Balgooyen, Athletics; Kim Kiernan, Finance and possible delegates. • Met with Internal Audit and UMHS compliance office. Finance-Tax department - DRAFT

7. Overview • Temporary: This SPG is temporary in nature and is subject to any major campus-wide initiatives regarding mobile technology tools. • More restrictive: the units may enforce a more restrictive policy than this SPG. • Strategy: The hope is to employ an 80/20 approach, i.e. 80% of the tools are processed ‘mainstream’ with the remainder, 20%, deferring to a process based on an exception basis or ‘facts and circumstances’ determination. Finance-Tax department - DRAFT

8. Goal and Characteristics: Simplicity • We have placed all technology tools into one of three baskets; • Basket #1 - Home internet connectivity, • Basket #2 - Laptops, • Basket #3 - Cell phones and all other telecommunication tools. • All other telecommunication tools include the following (Basket #3): • Blackberries, • Smart phones, • I phones and I pods, • PDAs, • Data cards, etc. Finance-Tax department - DRAFT

9. Goal and Characteristics: Consistency • We have developed a ‘one-size fits all’ model with few exceptions; • No reimbursement for home internet connectivity, but for those expressly provided in the SPG. • Certain identified IT professionals and telecommuters with no permanently assigned office space. • No stipends for laptops, tools will be provided by the University, • Stipends will be provided for cell phones and other telecommunication tools, but for those expressly provided: • Coaches as part of NCAA regulations that require University monitoring, • Certain physician/staff healthcare programs that require group access and communications. Finance-Tax department - DRAFT

10. Goal and Characteristics: Fiscal Prudence • The model manages use and costs effectively as follows: • Home Internet Connectivity: Generally, no payments will be made to employees. • It is difficult for UM, as steward, to justify paying for this service which every household uses indiscriminately for personal as well as university purposes. • Laptops: Subject to general University restrictions. • Cell Phones and all other telecommunication tools; • Stipends are limited to a$50 threshold per month, • Employees may have only one telecommunication device unless excepted, • Employees are responsible for insuring and replacing any tools and any additional features (if acceptable to and approved by the unit). Finance-Tax department - DRAFT

11. Goal and Characteristics: Fiscal Prudence • Other aspects: • Ensures validation of business purpose: use limited to the following; • Travel, work location, emergency response, or job requirement. • Minimizes administrative burdens on employees and the University. • Each year the employees must sign a verification statement validating the University’s business purpose and provide one month’s bill as evidence of cost. The Dean or VP must countersign when approving exceptions. • No reimbursements will be allowed through Accounts Payable. • Encourages pooling or temporary use of tool whenever possible. • Provides annual cost assessments: each year Finance will distribute an annual summary statement to units regarding costs incurred in using these tools. Finance-Tax department - DRAFT

12. Goal and Characteristics: Flexibility • The model allows flexibility as follows: • Includes a grandfather clause and grace period. • Allows for exceptions, examples include the following: • Stipends in excess of the $50 threshold, • More than one telecommunication technology tool, • Additional features. • Please note that only the Dean or Vice President may approve these exceptions. No delegation is permitted but for the hospital where the budget officers may review exception requests. • Discounts: Procurement is establishing strategic alliances with providers to offer discounts to employees. Finance-Tax department - DRAFT

13. Next Steps and Target Dates • Next Steps: • Have working committee approve a draft of the ‘SPG’. • Include an overview and a section on FAQs. • Revisit with stakeholders to ensure acceptance of policy. • Meet with other interested groups, e.g. medical administrators group. • Meet with Deans, Executive Officers, and others. • Other recommended forums in rolling out the policy. • Target dates: • Provide pilot programs to campus units and UMHS departments on a voluntary basis beginning this fall term. • Implement policy for new employees this January 1, 2001. • Implement policy for the rest of campus, July 1, 2011. Finance-Tax department - DRAFT

14. Questions? Finance-Tax department - DRAFT