Bank Accounts

Policy Statement

The University opens bank accounts where needed to support operations. This policy establishes how Harvard University bank accounts are to be opened, maintained, reconciled and closed. Only designated Harvard employees within the Office of Treasury Management (OTM) are authorized to select banking partners for, approve, open, make changes to, and close all bank accounts controlled by Harvard University entities. Use of the Harvard name and/or Harvard University’s tax identification number to open a bank account is strictly prohibited; OTM will immediately close any bank accounts opened outside the terms of this policy. Bank accounts in this policy include but are not limited to accounts in the name of the President and Fellows (P&F) and accounts opened by subsidiaries established by the University to operate on its behalf. All bank accounts controlled by Harvard University entities must be reconciled on a monthly basis, either by the tub or by OTM, as outlined below.

Reason for Policy

Harvard must comply with federal, state, and in some cases foreign regulations concerning the establishment and maintenance of bank accounts. Failure to comply with these regulations could result in penalties, fines, and reputational damage to the University.

This policy, which is in accordance with the Harvard University Corporation vote on banking, is necessary to promote compliance with the above regulations, to protect the University’s financial assets, to manage the University’s cash flow, to mitigate risk, and to provide proper oversight of University bank accounts.

Who Must Comply

All Harvard University schools, tubs, local units, Affiliate Institutions, Allied Institutions and University-wide Initiatives must comply. Student organizations that operate as separate entities with their own tax identification numbers are NOT permitted to open bank accounts under Harvard’s tax identification number.

Procedures

  1. Understand general process for opening, changing, closing and reconciling bank accounts. Managing University bank accounts is a partnership between the local unit and the Cash Management Office (CMO). The procedures below describe the process at a high level; see Appendix A for the detailed steps required of each respective office.

  2. Identify need for a bank account. The University has existing bank accounts inside and outside the United States for the purposes of holding and distributing University funds. These existing accounts will satisfy the bank account needs of almost all Harvard local units, even units with offices located outside the United States. However, in limited circumstances, the Cash Management Office (CMO) will authorize and open new accounts when needed by a local unit to conduct University business.

  3. Plan lead time for account set up.
    1. Tub financial deans’ offices or equivalent are advised to notify the CMO as soon as possible after identifying the need for a new bank account.
    2. CMO can open most bank accounts located inside the United States within two to six weeks of notification, depending on various factors.
    3. CMO can open most bank accounts outside the United States within six weeks. However, depending on the country in which the account is located and other factors, opening an account may take three to six months or longer, due to country-specific requirements e.g., the need to establish a legal entity.

  4. Contact your tub financial dean’s office. Any department that needs to have a bank account opened, closed, or changed in any way must contact its tub financial dean’s office or equivalent before taking action. For new accounts, the local unit must complete the Bank Account Request Form. The related tub’s financial dean’s office or equivalent must approve each request and forward it to the CMO on the department’s behalf.

  5. Submit all requests to the CMO via your financial dean’s office. For any request related to a bank account inside or outside the United States, including a maintenance request such as a change to an account signatory or to a statement address, the relevant tub financial dean’s office or equivalent must contact the Cash Management Office.

  6. Inform all signatories on foreign accounts of potential FBAR obligations.
    1. University employees who have signature authority over University foreign bank accounts may be required by the IRS to file a personal Report of Foreign Bank and Financial Accounts (FBAR).
    2. Tub finance offices are responsible for informing signatories on foreign bank accounts about FBAR obligations.
    3. Detailed information on FBAR requirements, and contact information in the event of FBAR-related questions from finance offices or employees, can be found in the FBAR Information document in Appendix B.

  7. Reconcile all University bank accounts monthly.
    1. Domestic bank accounts, including credit card merchant accounts, are generally reconciled by the CMO and reviewed by the local unit to research and resolve un-reconciled transactions. However, the CMO may recommend a different reconciliation protocol depending on the nature of the account.
    2. Foreign bank accounts are generally reconciled by the tub and reviewed by the CMO.

Responsibilities and Contacts

Financial deans or equivalent tub financial officers are responsible for communicating this policy to local units and for ensuring that local units abide by this policy.

Cash Management Office (CMO) is responsible for maintaining this policy. The CMO is also responsible for managing all Harvard University bank accounts, banking partners, and developing standard controls and procedures for University bank accounts. Contact: http://vpf-web.harvard.edu/otm/home/hom_contact.shtml

Tax Reporting is responsible for providing information to Harvard employees with FBAR obligations.
Contact: (617) 495-7792

Definitions

Changes to bank accounts: Changes include but are not limited to address changes, signatory updates, and changes to services.

University bank accounts: include but are not limited to accounts in the name of the President and Fellows (P&F) and accounts opened by subsidiaries established by the University to operate on its behalf such as Limited Liability Companies (LLC) and Wholly Foreign Owned Entities (WFOE). Other examples of accounts covered by this policy include branch accounts used to conduct University business and merchant accounts used to accept credit card payments made to the University.

Revision History

6/30/2013: updated format and added appendices.

Appendices

Appendix A: Detailed Procedures for Opening, Maintaining, Reconciling and Closing University Bank Accounts

Appendix B: FBAR Information Document .

See also: Policy, Treasury