CPO UNIVERSITY

1. CPO UNIVERSITY Presents • High Technology Tax Deferral • Audits • CPO Accounting Process Update

2. High Technology Tax Deferral CPO September 15, 2011

3. 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

4. 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

5. Roles and Responsibilities • Financial Accounting • Project Manager • Capital Projects • Schools (Client) • Funding Agent

6. Risks and challenges • Challenge to UW assumptions during audit reducing qualifying space • Usage changes from qualifying to non-qualifying • Refund process • Annual Survey

7. Examples of Qualifying Projects • Primate Center Health Sciences • Health Sciences Center H-Wing • Health Sciences Center I-Wing • Bagley Hall/Photonics • MRI Replacement – Health Sciences Center • Ben Hall • Genome Sciences Building

8. Questions? Tax Office -Julia Shanahan Telephone: 206-616-3003 E-mail: jeshana@u.washington.edu

9. 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?

10. 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.

11. Some Entities that Audit CPO: • Public Accounting Firms (such as KPMG) • UW Internal Audit • Washington State Department of Revenue • FEMA • Washington State Auditor’s Office

12. 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

13. 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.

14. 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.

15. Workflow • Project Assignment (Tracker) • CPOA Staff • Set up • Budget Funding • Purchase orders Invoice Receipts & Payments • Project Completion • P.O.’s liquidation • Close out

16. Process Updates • Set ups and Adjustment • Budgets/ Funding Transfer • Purchase Orders/ Change Orders/ Additional Services • 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

17. Staff: • 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 • CPO Accounting email address: • cpoactng@uw.edu

18. Q & A