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Program Financial Management

See here for an overview of key information related to budgeting, fund management, billing, and other financial topics.

 

The opportunity to study abroad can be a valuable educational and life experience for our students. Virginia Tech serves students from all walks of life and all socio-economic backgrounds. Within the university’s mission of inclusivity, it is important that study abroad opportunities be as affordable as possible for our students. In order to provide affordable study abroad opportunities for our students, program organizers should plan study abroad opportunities as economically as possible.

While historically half of VT program participants do not use financial aid, we want to broaden the educational choices for disadvantaged students. Ensuring that study abroad opportunities are as affordable as possible allows students, who may normally find the costs prohibitive, the opportunity to study abroad.  Additionally, financial assistance for study abroad is limited, often covers only a portion of the costs, and disburses close to the program start date, resulting in high up-front costs for students. Planning affordable, educational study abroad opportunities requires stewardship in all areas: lodging, activities, meals, travel, tours, cultural events, etc.

See belowfor an overview of key information related to budgeting, fund management, billing, and other financial topics.

Building a Budget

Budgeting can be a time-consuming, meticulous task because there are many considerations involved and minor errors can be costly. A budget is required for your Global Education Approval Committee (GEAC) program proposal. If your budget changes significantly following GEAC approval, it must be re-submitted to the committee.

Download GEAC Budget Template
  • Build your budget with sufficient funds to support quality academic programs;
  • Keep costs affordable for students, so the program is accessible; and
  • Be thoughtful stewards of student funds, allocating resources efficiently.

Required inclusions

  • Virginia Tech mandates international emergency medical and security assistance insurance for all university-supported travelers (faculty, staff, students, volunteers, dependents, and guests). 
    •  Note: CISI does NOT include trip cancellation or interruption insurance nor personal property protection. Program leaders should encourage students to purchase trip protection insurance at the time of making their deposit payment.
  • Telecommunications for the program leadership to be able to reach Virginia Tech, emergency services, providers and travel agents, and program participants in-country.
  • An overall 10 percent contingency for unplanned or unexpected costs.
  • An additional 10 percent contingency related to inflation and pandemic-related costs.

Allowable and unallowable expenses

Study abroad travel is different from business travel in that it is financed through student funds. As such, responsible stewardship is necessary. Certain program expenses are reimbursable/allowable with restrictions, while others are not reimbursable/allowable under any circumstances. See the list below for common examples.

Allowable with restrictions:
  • Per diem: The GEAC best practice recommendation is that the faculty leader's per diem rate does not exceed 50 percent of the per diem rate set by the U.S. Department of State for the location of travel. As a stewardship practice, faculty expenses should align with student costs for the program. Programs presenting more than 50 percent of the location's per diem rate should provide a justification in the GEAC proposal.
  • Airfare: Only economy round trip tickets are allowable. Any flight status upgrades must be paid for personally and are non-reimbursable beyond the economy amount.
    • Medical accommodations: If travel upgrades or other expenditures are made on the basis of a medical reason, you may work with CISI to seek reimbursement via a claim form. (Note: In order to be eligible for reimbursement from CISI, you will need to log a case file in advance with security provider, On Call International, and notify CISI of any changes to the travel arrangements or any medical expenses.)
  • Group meals: Itemized receipts are required for group meals. 
    • If an itemized receipt is not available, obtain a menu either online or from the restaurant, mark what each person ate, and submit with proof of payment along with a document detailing the following: date of the meal, location, attendees, description, and signature/affidavit that no alcohol was purchased and claimed with state funds.
Unallowable:
  • Expenses related to spouses/dependents.
  • Alcohol (per university procedure on state funds).
  • Expenses associated with personal convenience (such as personal products, laundry, personal travel, etc.).
  • GPS, upfront fuel purchase options, and refueling options on rental cars.
  • First class airfare and first class rail travel.
  • Memorabilia/souvenirs.

Faculty and Program Leader Costs

The travel costs for program leader(s) are built into the program’s budget to be covered by students’ program fees (unless these costs are sponsored by another funding source).

The Global Education Approval Committee (GEAC) evaluates stewardship and equity as part of the program proposal and budget review process, which includes evaluation of the proposed faculty per diem rates, alignment of faculty and student expenses, business vs. economy class travel, and the faculty-to-student ratio.

Virginia Tech Policy 1070: Global Travel Policy sets the minimum faculty to student ratio at 1:15. There are various ways to fulfill the policy’s second responsible individual requirement, including leveraging on-site support staff, local faculty, and approved volunteers. The more faculty members involved, the higher the student costs.

Stipend and teaching compensation for program leaders should not be included in the program’s budget. Students pay for instructional costs through their University tuition and fees. Consult with leadership in the academic department/college for more information on faculty compensation for study abroad teaching and leadership. 

Fixed vs. variable expenses

Program expenses can be defined as either fixed or variable. 

  • Fixed costs do not change based on the number of participants – for example, classroom rental costs. 
  • Variable costs are dependent on the number of participants – for example, the cost of train tickets per person. 

It is important to be aware of which operational costs are fixed and which are variable. Correctly categorizing costs will result in a more accurate budget. 

"Billed" vs. "out-of-pocket" expenses

You should clearly define and communicate which expenses are included in the program fee and which are excluded and become the onus of the student. 

The program fee is the amount that students are billed for program-related expenses; this amount should include costs for any function for which student attendance is required. Typical program expenses may include, but are not limited to:

  • Honoraria to lecturers, guides
  • Classroom rental
  • Ground transportation costs
  • Guides at museums and sites
  • Admission costs at museums and sites
  • Tips to drivers, guides and for meals
  • Student housing
  • Student meals
  • Airfare
  • Faculty housing
  • Faculty meals
  • Faculty participation in program activities
  • Local cell phone and telecommunication costs for faculty
  • CISI international emergency medical and security assistance insurance

Items such as airfare, visas, certain meals, personal expenses, textbooks, etc. may be excluded from the program fee. Estimates for these costs should be indicated in the proposal and provided to students.

Minimum and maximum group size

The minimum number of participants needed for the program to run may depend on budget factors, including the anticipated fixed and faculty costs and feasibility of the program fee with fewer students. It may also depend on the department's projected tuition revenue/faculty compensation. Lower enrollment places a higher financial burden on fewer students and should be taken into account when setting the enrollment minimum. 

The program may cap the number of participants depending on factors such as the planned activities and number of faculty leaders.

Plan for contingencies

When building your budget, it is a good idea to estimate slightly higher in case prices rise. A 10 percent contingency must be included in the program budget to cover unanticipated costs. If you encounter unexpected costs while abroad beyond what the contingency can cover, funds must come from the sponsoring department or college.

Students should be encouraged to purchase their own “cancel for any reason”  trip protection coverage to support financial losses resulting from trip interruption or cancellation. 

Exchange rates

Continue to monitor exchange rate fluctuations and update your budget as new information becomes available. An online currency converter can be helpful.

Salaries and stipends

Program Leaders

Each college maintains a different study abroad compensation procedure. Faculty program leaders should discuss this with their department head early in the planning process. Faculty compensation is funded through tuition revenue and not student program fees.

Winter Session

The University policy for winter session study abroad compensation states that instructional faculty (T&R or A/P) can receive up to the equivalent of 3.75% of the academic-year salary per credit hour of instruction (with a limit of 11.25% of the academic-year salary per 3 credit-hour course). This applies to 9 month and 12 month faculty. Tuition revenue generated from winter session study abroad programs are split 70% with the home college of the course offering and 30% with the University. Revenue return to the college is immediate.

Summer Session

The University policy for summer session study abroad compensation states that instructional faculty (T&R or A/P) can receive up to the equivalent of 3.75% of the academic-year salary per credit hour of instruction (with a limit of 11.25% of the academic-year salary per 3 credit-hour course). This applies to 9 month faculty. Tuition revenue generated from summer session study abroad programs are split 70% with the home college of the course offering and 30% with the University.

Program Volunteers

To support study abroad programs and align with Global Travel Policy 1070, programs can propose and approve volunteers to assist in study abroad program leadership through the Volunteer Appointment & Approval Form. Volunteers serve in an unpaid capacity but can have their travel expenses covered through student program fees. Ensure that all costs align with student costs (e.g. economy class travel) and follow best practice (e.g. do not exceed 50% of the State Department allotted per diem rates for lodging, meals and incidentals). 

Volunteer expenses must be built into the GEAC approved budget and included within the Volunteer Appointment & Approval Form, which is approved by the department head, Controller’s Office, and Global Education Office. 

If intending to cover volunteer expenses from student program fees, volunteer expenses must be built into the GEAC approved budget. Volunteer expenses may be supported from other funding sources (e.g. grants, departmental funding, etc.). The volunteer’s expenses (type and amount) and the source of funding must be included within the Volunteer Appointment & Approval Form, which is approved by the department head, Controller’s Office, and Global Education Office. 

Note: Using volunteers is an exception to policy/procedures. A background/conviction check will be required for a non-Virginia Tech employee volunteer. Using a faculty member as a volunteer constitutes an exception to Virginia state policy and Virginia Tech procedures, based on the duties assumed.

For support with developing or updating your budget, contact Linda Tanko (ltanko@vt.edu), Fiscal Technician (Global Education Office)

Fund Management

Departments are responsible for program fund management, which includes maintaining and monitoring the study abroad local fund, billing the student program fee, and making vendor payments.

  • The study abroad local fund request is embedded in the GEAC proposal process. Once the proposal is approved, the Controller’s Office will establish the new fund and notify the contacts listed on the proposal form. 
  • Once the local fund is established, submit the Request for Detail Code Form to the University Bursar’s Third Party Collections Manager.
    • The detail code is needed to bill the program fee in Banner and is used as a reference number to ensure student payments go toward the correct charge.
  • Establish a payment agreement form, including a billing timeline with deposit and payment deadlines and refund/cancellation terms. This form will be shared with students via their My Study Abroad account with GEO, where they can read and sign the document. Coordinate with your department/college fiscal support to place charges on student accounts via Banner.
    • Billing should follow the Bursar's monthly billing schedule (charge placed by the 10th, payment due on the 10th of the following month). If payment deadlines do not align with the Bursar’s schedule, program leaders must clearly communicate deadlines to students. 
  • Provide students with payment instructions and deadlines. See here for sample instructions.
  • Monitor student payments.
  • Note: The University Bursar bills tuition and fees associated with the program.

For questions regarding student billing, contact Kelly Perkins (kmstout@vt.edu), Accounts Receivable (AR) Supervisor (University Bursar)

If you are working with a third-party provider or vendor that does not have a pre-existing contract with VT through the Procurement Office (see Contracted Travel Agencies below), the following information is necessary.

  • VT Policy: Advanced pay to a study abroad vendor falls under Direct Pay: Policy 3220.  
  • Required tax forms: For prepayment, international vendors must first be established in HokieMart through submission of one of the forms below. The process can take several months, so plan accordingly. After the appropriate form is complete, send it to the Controller's Office.
  • Custom program agreements: Advance planning is needed for any vendor partnerships and/or advanced payment.
    • Before you are able to remit payment in advance for an invoice through HokieMart, as a best business practice, a Custom Program Agreement with the vendor is required. Ideally, there should be a master’s agreement in place with the vendor that spans a 3-5 year period and then a program-specific addendum for each program offering. See here for custom program agreement templates: master’s agreement and program-specific addendum. Agreements must be reviewed and approved by Tracey Gallagher (traceyk@vt.edu) in University Legal Counsel and can take 8-12 weeks to process.
    • Ensure you have reviewed and understand the cancellation penalties and stipulations. 
    • Once the signed agreement is in place, vendors are established in HokieMart, and an invoice has been received, payment can be processed, which can take an additional 30-60 days.

Virginia Tech contracts directly with several travel agencies that can support you in making program arrangements, such as on-site ground transportation, lodging, activities, etc. See the Procurement Department for details and search for agencies here. It is recommended that faculty airfare for study abroad programming is purchased through an approved travel agency (see Controller’s Office Procedure 20335e: Air Transportation).

You do not need to establish Custom Program Agreements with these vendors. To make advance arrangements:

  • Contact the vendor requesting assistance and a quote. Provide as many details as possible.
  • Confirm that the provided quotes align with your budget, including any commissions or fees. Negotiate if needed.
  • Review and save the cancellation/change policies indicated by the local provider.
  • Ask the vendor to book. Send the details to your department/college fiscal administrator to issue payment in HokieMart from the program fund.
  • Confirm that the vendor receives the HokieMart Purchase Order (PO).
  • For faculty-led programs, the program leader must enroll participants, approved volunteers/guests, accompanying dependents, and the program leaders in the university-mandated CISI insurance policy.
  • Download the current CISI Group Enrollment Template. Fill out all columns highlighted in white on the spreadsheet.
  • Submit the spreadsheet to GEO.
  • Submit payment after receiving an email notification that includes the invoice from GEO, to be paid from your study abroad local fund via HokieMart.

It is important to track program expenses daily while abroad to monitor remaining program funds. Receipts are required for all program expenses (except for per diem) for reimbursement. It is recommended that you travel with a receipt book (obtainable from the Controller's Office) to document expenses when a receipt is not available.

After the program ends and all remaining bills have been paid (ensure there are no remaining purchase order encumbrances), the program fund must be closed. The program leader should work with the department fiscal officer and the Controller’s Office to begin closure. The fund should be closed within six months after the program ends. 

  • If revenues exceed the expenses by less than 10% of total revenues collected and the department plans to offer the program again the next year, the funds can be transferred into the Banner fund to be applied to expenses of the upcoming program.
  • If revenues exceed the expenses by less than 10% of total revenues collected and the department does not plan to offer the program again, a refund should be issued to students only if the refund amount is greater than $50 per student. In instances where the refund amount to each student is less than $50, the funds can be carried forward to another study abroad program in the department. Program fee refunds must be issued within one year of the program end date.
  • If the program is offered on alternating years and the revenues exceed the expenses by less than 10% of total revenues collected, the department can create a new study abroad local fund (by renewing the program through the Global Education Approval Committee) to house the overage for the following year. 
  • If revenues exceed expenses by more than 10% of total revenues collected, the department should work with the Bursar’s Office to reimburse the students the amount of the overage. If each refund amount is less than $50, the administrative cost of processing the refund exceeds the value of the refund and the Controller’s Office may authorize the additional amount to be carried into the next year. Program fee refunds must be issued within one year of the program end date.
  • In circumstances where the department intended to offer the program the next year, carried forward funds to a new study abroad local fund and the program cancelled, any carryover funds from the previous year can be transferred to another study abroad program in the department. Refunds to students should only occur in the year the program was offered.
  • If expenses exceed revenues, the department must fund the program expenses from other non-public sources or bill the students for the amount of the shortage.

In renewing faculty-led study abroad programs in the following year, program leaders must report the amount of surplus to be carried forward as part of the GEAC Program Renewal and adjust the budget accordingly.

Travel Pre-Approval & Reimbursement

  • Faculty leaders who seek reimbursement from program funds must submit a Pre-Approval in Chrome River at least 30 days prior to travel.
  • Travel Loans/Advances can be requested to cover on-site program expenses as part of the Pre-Approval. Allow three working days for processing. Loan funds will be made available to the requestor 15 working days prior to departure date.

 

  • Obtain receipts for all expenses incurred on the program's behalf. Expenses for which there are no receipts may not be reimbursed upon return. It's advised to carry a receipt book while traveling. As you receive receipts, you can upload them to your Wallet in Chrome River.
    • Note: Per diem expenses do not require receipts.
    • Note: Group meals require itemized receipts.
  • Faculty leaders must submit an Expense Report within 30 days of return. Failure to repay the travel loan can result in payroll deduction. 
  • All original receipts for program expenses must be submitted with the Expense Report. Receipts not in English should be accompanied by a translation.

For questions regarding travel pre-approval or reimbursement, contact: Ashley Dunn (ahosey@vt.edu), Travel Supervisor/Special Projects Coordinator (Controller's Office)

Resources

  • For more information on program financial management, contact your department/college fiscal administrator or Kelly Perkins (kmstout@vt.edu), Accounts Receivable (AR) Supervisor (University Bursar)
  • For more information on establishing vendors in HokieMart, contact: Ashley Dunn (ahosey@vt.edu), Travel Supervisor/Special Projects Coordinator (Controller's Office)
  • For information on wire transfers, contact: April Everhart (aprilee@vt.edu), Accounts Payable Analyst (Controller's Office)
  • For budgeting and study abroad finance, contact: Linda Tanko (ltanko@vt.edu), Fiscal Technician (Global Education Office)
  • For assistance with enrolling in international emergency medical and security assistance insurance with CISI, contact: Allie Oberoi (aoberoi@vt.edu), Assistant Director for Global Safety and Risk Management (Global Education Office)