Led by Amir Rahnamay-Azar, vice president for finance and chief financial officer, Carnegie Mellon University’s finance division collaborates with the office of the general counsel, enrollment services, human resources, university advancement, and academic units on an ongoing basis to review data available for the university’s global activities. Those encompass seven major programs—including a campus in Qatar—approximately 30 international degree programs, and other global collaborations, such as research projects.
As part of the review, the university assesses how we maintain operations and address risk to serve the programs both domestically and internationally to ensure our customers, especially students, receive the utmost service and a consistent Carnegie Mellon University (CMU) experience.
As the university evolves, opportunities arise to re-evaluate the operating and potential-risk landscape. As an example, implementing a new human resources and payroll system prompted CMU to open new bank accounts, modify transaction practices for existing accounts, and redesign payroll practices, while documenting new processes and training materials. These opportunities promote collaboration between academic and administrative units to ensure the highest and best use of university resources. Collaborations such as these are a key component of CMU’s global risk assessment strategy.
Part of the Routine
Risk assessment and looking at data are part of the university’s day-to-day operations. Data and information are shared with other departments and academic units that contribute to daily efforts to address potential risk. Likewise, CMU’s schools freely provide the financial data and information needed to keep the international program database current.
The schools typically request assistance long before they decide to introduce an international program. When a school suggests a new international program, we collect critical information and experience about the particular country to expedite the process and manage the accompanying risks. If another CMU school already has an established program in the same country, representatives from both schools meet to discuss best practices and potential collaborations. We also consult legal, human resources, and other subject matter experts regarding requirements and laws for the new country.
The size of the new potential program, as well as the scope of the program, factor into which departments are involved in the review and which department may take the lead. Before initiating a review, we complete a standard checklist of questions regarding a potential program. These “getting started” questions, which get to the heart of risk assessment, include:
- What country is involved?
- What type of activity is being considered?
- What is the duration?
- Will CMU have people traveling abroad?
- Will you have employees?
- Will you have a partner?
- How will the program be funded?
- How will students be involved?
For proposed programs of greater complexity or magnitude, we look into an expanded list of questions to delve into specific review items. Examples include:
- What are the tax implications of Carnegie Mellon’s presence in that country?
- Will CMU employees be accompanied by their families?
- Where will employees live, and how will they obtain housing in that country?
- What labor laws will apply?
- What insurance is required, and what associated risks should be considered?
- Will students remain in one location or travel around?
Based on the information already available from experience with the existing international programs, we provide the school with preliminary feedback and offer alternate options as needed. While global collaboration at CMU fuels the success of this risk assessment approach, key factors, including the following:
- Show academia the added value. When Carnegie Mellon established its international operations and support structure about 10 years ago, knowledge sharing was crucial to show the assistance that would be provided. Relationships had to be built to open lines of communication. With a decade of experience and data behind these efforts, the academic units readily share their global prospects and plans knowing they will receive data, information, and options that are helpful to their programs’ goals and mission—from how to pay vendors in a particular country’s currency to what a particular clause in a contract means in practical terms.
- Leverage expertise. There are different risks associated with every country. It is always beneficial to talk informally with consultants and colleagues at other institutions about their experiences in particular countries. NACUBO’s International Resource Center (irc.nacubo.org) is helpful in identifying potential vendors in other countries and learning about the struggles other institutions have success-fully resolved.
- Guard against risk bias. The type of program, the country, or even the school involved do not necessarily make an international activity “too” risky. Educational, economic, and political factors are always evolving, so it is essential to gather and review the data before passing judgment.
By analyzing a proposed project and proactively working out the details, we can greatly reduce potential issues and the inherent risk in operating globally for the new program. The general counsel’s office also works to incorporate standard language into agreements to help protect the university.
This risk assessment approach for international programs is part of the CMU culture and benefits from having the support of CMU’s leadership, especially the president, provost, and management team. They, in turn, have the necessary information available to them to make data-driven decisions for the university.
Relationships with administrative staff in Pittsburgh and in other countries, as well as in the schools themselves, are crucial to keeping the international program data updated and staying current with evolving laws, local customs, and developing trends. For example, CMU’s Qatar campus is very supportive of global university efforts and not only works with the university daily to address focus areas, but also offers guidance on the global market. Each week, videoconferences are conducted with representatives of CMU’s international programs to discuss financial and operational business. This provides an opportunity to address potential risk areas and consult with subject matter experts as needed.
Collaboration among Carnegie Mellon University’s main campus and those on the ground in global locations is the key to assessing and addressing potential risks, as well as to continued international success at CMU.
SUBMITTED BY Carrie Nelson, assistant vice president of international finance, Carnegie Mellon University.