Allowability of H-1B Visa Expenses on Sponsored Projects
Updated September, 2005

Recent announcements from the International Center and the Office of General Council related to retention of legal counsel for visa matters prompted us to update our statement on the allowability of charging visa expenses to sponsored projects

Financial Operations and DRDA are asked occasionally about the allowability of charging the various H-1B filing fees to sponsored projects, particularly those involving Federal funds. In general, we believe these charges should be allowable as follows:

1. H-1B petition filing fee currently is $185, payable to DHS. If the individual is being recruited to work on the sponsored project, the fee is chargeable to that sponsored project because that project will receive a direct benefit from the University appointment. If the resulting appointment will be to multiple University sources, the charge to the individual sponsored project should be prorated accordingly. In those instances where it is necessary to pay the premium processing fee, currently $1,000, that fee is also chargeable to the sponsored project, with the same provisions as the petition fee.
2. International Center processing fee currently is $700 and is payable to the International Center. As described above, the project will derive direct benefit from the appointment of the individual so the fee can be charged to the sponsored project on which the new employee will be appointed. Again, prorating the charge is necessary if the employee will be appointed to multiple University sources.
3. Anti-Fraud Fee - as of March 8, 2005, $500 and payable to DHS. As described above, the project will derive direct benefit from the appointment of the individual so the fee can be charged to the sponsored project on which the new employee will be appointed. Again, prorating the charge is necessary if the employee will be appointed to multiple University sources.

Reimbursement Note: Although the University can pay the Department of Homeland Security directly for the initial filing fee and antifraud fee, the prospective employee can provide personal checks to avoid delays in obtaining University cut checks. The department should then reimburse the employee for these expenses. The reimbursement should be done on a non-PO voucher and processed through the Accounts Payable Office. This will be considered a reimbursement of business expenses and not as taxable income.

Additional Comments:

• There is no requirement that these expenses be charged to sponsored projects. It is the responsibility of the hosting faculty member to identify the appropriate funding sources.
• Expenses associated with the potential employee's dependents cannot be charged to sponsored projects (but could be charged to general/discretionary funds should the unit so desire).
• If the visa request is denied by the DHS, the charges cannot be covered by the sponsored project. It is expected that the hosting faculty member or unit will cover the charges from an alternative source and the expense be removed from the sponsored project.
• If the visa expenses are covered by a sponsored project and the employee leaves the University within 12 months of the start of service to that project as an H-1B holder, the fee expenses must be transferred from the sponsored project account to a discretionary account identified by the Principal Investigator of the sponsored project.

• In general, these expenses must be rebudgeted from existing (i.e., already committed) grant and contract budgets. It is doubtful that sponsors will entertain requests for supplemental funding for these expenses. Also, because it would be difficult to presume such a need at application preparation time, we do not endorse including these expenses in prospective budgets.
• For any instance that requires legal fees being paid to one of the University's retained law firms, the Principal Investigator of the sponsored project must provide written justification both to DRDA and Financial Operations, Sponsored Programs, documenting the direct involvement of the individual to the project being charged.

Other Non-Immigrant and Immigrant Petitions:

• Expenses associated with requests for O-1 Visas (temporary work visas for aliens of "extraordinary ability or achievement in the sciences, arts, and education") may be charged to sponsored projects using the same criteria set forth above for H-1B visas. Specifically, there must be a clear and direct benefit derived by the sponsored project to justify direct charging the petition expenses.
• This policy specifically excludes all student (F-1) visas. The primary purpose for their joining the University community is to be a student. Subsequent participation on a sponsored project is incidental to their role as a student even though the project may derive benefit from their involvement.
• This policy generally excludes J-1 visas (visiting scholars or professors) - for exchange visitors to come to the US and participate in a program of teaching, scholarship, or research. However, if the purpose of the exchange is to work on one or more sponsored projects (i.e. as a Visiting Scholar), the project(s) can reimburse for the SEVIS and other fees. It is important to establish and document the direct involvement of the individual to the project being charged. This documentation should be forwarded both to DRDA and Financial Operations, Sponsored Programs.
• This policy specifically excludes Permanent Residency requests as the primary beneficiary is the individual and direct benefits to individual research projects cannot readily be shown.

If you have questions:
Rob Barbret at 764-9593 or rbarbret@umich.edu
Jim Randolph at 764-7242 or nihjim@umich.edu