This issue of the Financial Management Office Newsletter includes information about the following:
- Annual Nonresident Alien (NRA) Assessment & Updated UH WH-1 Form Available for 2022
- Updated IRS W-8BEN and W-8BEN-E Forms
- Salary Overpayment Reminders
- From the Office of the Bursar
- Error When Trying to Submit a Purchase Order Amend (POA) to Reduce Encumbrances
- Are payments to “nonemployees” (i.e. students, graduate assistants, independent contractors etc.) taxable?
Resources
The FMO Newsletter is distributed monthly. Should you have any questions about this newsletter, contact Amy Kunz via email at amykunz@hawaii.edu.
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Annual Nonresident Alien (NRA) Assessment & Updated UH WH-1 Form Available for 2022
Target Audience: Administrative Officers, Fiscal Administrators, Business Office Staff
To determine if an individual working at the University of Hawai’i on an F-1 or J-1 type visa have been in the USA long enough to qualify as a Resident Alien, the Disbursing Office will be conducting its annual January NRA assessment of all foreign individuals.
The individual benefits from this assessment whereby if he/she passes the IRS Substantial Presence Test (SPT), the University is no longer required to withhold 14% of 1042 taxes from their fellowship payments. In addition, providing an updated WH-1 during the annual assessment will facilitate payments and tax forms going to the correct mailing address.
The assessment requires all departmental business offices to have their NRA personnel complete the 2022 version of the UH WH-1 form and attach copies of all supporting documentation as required and listed at the top of the first page of the WH-1.
Please scan the supporting documentation and submit an EDIT vendor request on KFS. Your vendor request should list in the DESCRIPTION field the following: FA Code #, NRA Update, LAST NAME, in your submission. Please remember to review your scanned images before attaching to ensure scanned documents are readable, passport ID or visa numbers, and dates are clear to avoid your vendor request being disapproved.
The UH WH-1 has been revised and posted to the FMO website. You can find the form at this site page: Payment/Reimbursement -> Forms -> Miscellaneous Forms
All previous versions of this form should be discarded. Please update your forms accordingly.
If there are any questions regarding this process, please contact Donnie Feng, Disbursing Office at donnie@hawaii.edu.
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Updated IRS W-8BEN and W-8BEN-E Forms
Target Audience: Administrative Officers, Fiscal Administrators, Business Office Staff
The IRS recently released new versions of W-8BEN, W-8BEN-E, and W-8ECI forms (Rev. October 2021).
Although the IRS allows the acceptance of a prior version up to April 2022, please start requesting vendors to use the October 2021 version of the forms when creating new vendors or updating existing ones.
Updated forms can be found via the IRS website.
https://www.irs.gov/forms-instructions
If there are any questions, please contact Donnie Feng, Disbursing Office at donnie@hawaii.edu.
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Salary Overpayment Reminders
Target Audience: Fiscal Administrators and Fiscal Support Staff
Salary overpayments have been on the rise in recent months. As a reminder, all leave earned and taken must be recorded in a timely manner in accordance with applicable bargaining unit contracts to minimize and prevent salary overpayments. All separations from service must be handled timely to avoid salary overpayment as well. Supervisors are responsible to monitor paid leave balances of subordinate employees to ensure that a salary overpayment does not occur for any employee whose cumulative paid leave balances fall below ten (10) working days of vacation and ten (10) working days of sick (or 160 hours) as well as complete separation paperwork to avoid payroll being processed after the employee is no longer working. Department personnel should individually monitor and track employees’ paid leave balances to ensure that a salary overpayment does not occur. Timely reporting of any salary overpayment or separation of service without paperwork situation to the Payroll Office may avoid potential overpayments.
For questions regarding salary overpayments, please contact the UH Payroll Office at payroll@hawaii.edu.
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From the Office of the Bursar
Target Audience: All
Bad-Debt Write-Offs:
The write-off project for Banner student accounts receivable from 1997 to 2008 began in February 2021. The criteria to determine which accounts to write-off was based on account delinquency for more than ten years and deemed uncollectable and was reviewed and approved by the Office of General Counsel. There was a total number of 2,635 accounts impacted that totaled $1,841,554.98 for various campuses.
After reviewing and updating accounts that had adjustments and/or payments since the write off approval, an upload process was developed to allow for campus specific write-off code, student ID, and the amount to load through an automated process. The upload process was tested throughout several months and accounts were reviewed again for accuracy.
The first process in the live Banner environment took place on November 26, 2021 with an amount totaling $1,068,912.79. The feed to Kuali took place on November 29, 2021. There are additional write-offs to take place due to students having outstanding balances with more than one campus. Accounts are written off as balance sheet entries only and revenue is not impacted, per accounting rules.
Amounts due from students are not forgiven and all sanctions still apply to students whose accounts have been written-off: inability to register, receive transcripts or diplomas. The financial obligation hold went on student accounts starting in June 2021 to apply the sanctions.
Refunds:
The schedule for refunds processed through Banner will be updated starting in January 2022. All refunds will be processed on the 10th, 20th and the last business day of the month. If any of these days falls on a holiday or weekend, the refunds will be processed the business day prior. All refunds must be completed in Banner two days prior in order for processing through TouchNet and the creation of a paper check file for any account not enrolled in e-Refund option to process ACH/Paper Check refunds.
E-payments are required per AP 8.802, unless otherwise prohibited by state or federal laws or regulations. eRefunds are a faster and safer way to receive refunds and are available to students who have a US bank account. The process of direct deposit allows students to receive their funds as soon as two days after the completed refund process whereas, a paper check will take longer to get to the student and is dependent on the US Postal Service.
For questions, please contact Denise DeArment at dearment@hawaii.edu.
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Error When Trying to Submit a Purchase Order Amend (POA) to Reduce Encumbrances
Target Audience: KFS Users
Processing a POA to reduce encumbrance on a PO line with split accounting may result in the following error – “The Account Line Percent (Percent) must be a non-negative number, with any number of digits to the right of the decimal.” If this error is presented, KFS will not allow you to submit the POA.
This error occurs when an item line with split accounting has a partial payment; and the KFS reallocation process for the encumbrance reduction results in a negative amount/percent distributed to the last account. KFS does not allow manual adjustment to the accounting lines after a partial payment is made against a PO line with split accounting, therefore the following alternate options are available for encumbrance reductions:
- If final payment has been made and the POA is to reduce all encumbrances to the paid amount, a PO Close (POC) may be processed to liquidate the remaining encumbrances and close the PO. Additionally, if the vendor needs to be notified, a memo may be used in lieu of the printed POA document.
- If the encumbrance reduction is required and the PO is still needed, the workaround is to close the existing PO and issue a new Requisition/PO for only the amount of the remaining encumbrances. Whenever feasible, it is recommended that the new PO have only one accounting line per PO item line to avoid having the same issue on the new PO.
Please note:
- The ‘close order’ button is available on the Open version of the PO.
- If there is a saved POA, it will need to be cancelled before the PO can be closed.
- For all POs issued by OPM, please work with OPM to close the existing PO (and issue the new PO when applicable).
- If there are residual encumbrance balances after the POC has been processed, please submit a trouble ticket.
For more information on the KFS encumbrance reallocation process for line items with split accounting and partial payments, please see FAQ How Does KFS Reallocate POA Encumbrance Increases or Decreases for Line Items with Split Accounting and Partial Payments.
If you have any questions, please contact the Fiscal Services Office at fissrv@hawaii.edu.
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Are payments to “nonemployees” (i.e. students, graduate assistants, independent contractors etc.) taxable?
Target Audience: Fiscal Administrators and Staff
The following is a list of examples depicting nontaxable and taxable payments to various nonemployees, for your reference:
Nontaxable:
- Student purchased office supplies for the UH office. Reimbursement of this purchase is not taxable.
- Graduate assistant reimbursed for airfare to travel to a research site for part-time work research for UH. Reimbursement for this airfare should not be taxable, as long as the duration of the trip is 100% for the University.
- Independent contractor bought material to repair UH classroom. Reimbursement of material cost (at cost) is not taxable.
Taxable:
- Student received gift card for participating in UH research. Value of gift card is taxable.
- Graduate assistant paid 5 days of hotel lodging for a three day trip working for UH research project (work related, not classroom related). Value for the reimbursement of the extra 2 nights of lodging is taxable.
- Independent contractor billed UH for $250, which included $100 of material. Only $150 should be taxable.
When payments are considered “taxable”, UH will comply with federal tax reporting as required by the Internal Revenue Service.
Should you have any questions on this topic, please contact Kenneth Lum at kenlum@hawaii.edu.