Re: Annual Leave & Sponsored Programs revisited Charles Whitaker 08 Apr 1997 09:54 EST

Research Administration Discussion Group wrote:
>
> Hi Folks -
>
>         I am enjoying, and learning from, the discussions about how to
> handle faculty and staff who accrue annual leave rather than using it within
> each sponsored project's budget period.
>         One of our issues is that some approaches which work for other
> institutions cannot work for ours.  For example: With respect to the
> institution which increases its fringe benefit rate (as a direct cost to
> each award) in order to develop a pool from which excess annual leave can be
> taken, we can't use this because (1) all public university-controlled funds
> in our State must be used by the end of the fiscal year...every year; and
> (2) we have no Research Foundation which potentially could serve as the
> "pooling" repository.
>         Other issues/concerns relate to OMB Circular No. A-21 (revised),
> "Cost Principles for Educational Institutions," which specifies (p.30) that
> salaries, wages, and fringe benefits (for personnel on grants, contracts,
> and other federal agreements) are allowable "...to the extent that the total
> compensation to individual employees conforms to the established policies of
> the institution, consistently applied...."
>         It is this phrase, "consistently applied," with which we are
> struggling.  For example, our current annual leave policy for 12-month
> faculty and staff who are on regular institutional lines includes the
> following statement: "If employees are unable or unwilling to use accrued
> vacation, the appropriate Supervisor must show the number of vacation days
> accrued on the Personnel Action Form used to terminate employment."  (Under
> this circumstance, the terminating employee is entitled to receive a
> lump-sum payment for all or most of the unused annual leave.)  ...  At the
> same time, we are considering implementing the following policy for faculty
> and staff who are supported by sponsored funds: "All accrued annual leave
> associated with a sponsored project must be expended or the monetary
> equivalent paid to the employee (in the case of termination) from the
> (sponsored) account prior to the termination of the project.  Otherwise, the
> annual leave will be lost."
>         Our questions: (1)If we impose on "sponsored staff" a more
> restrictive Annual Leave Policy than is offered to "regular staff," are we
> in conflict with A-21 (revised)?  (2)If there is no issue, how should we
> handle regular employees some or all of whose time is "bought out" by one or
> more sponsored awards--e.g., are they now required to use proportional parts
> of their annual leave as project periods come and go?  (3)Even if the
> scenario in Question (2) is both legal and logistically manageable, how do
> we - as research administrators - convince a full-time, regular faculty or
> staff member to allow him/herself to be bought out to work on a sponsored
> program when, by doing so, he/she accepts new restrictions on his/her annual
> (and other)leave?
>         Finally - [you're welcome; this had already become much too long!] -
> our Indirect Cost agreement with our cognizant federal agency includes in
> its base: "Direct salaries and wages including vacation, holiday, sick pay
> and other paid absences but excluding all other fringe benefits (which are
> included in a project's Direct Costs)."  Is one implication of this
> agreement that our recovered Indirect Costs should be viewed as a resource
> to be tapped when individuals on sponsored projects choose to take accrued
> annual leave beyond the project period(s) when such leave was earned?
>         Thanks for your insights, suggestions, and examples of how your
> institution handles these and similar issues!
>
> Howard Kaplan
> Director of Research Services & Sponsored Programs
> Georgia Southern University, P.O. Box 8005
> Statesboro, GA 30460
> (912-681-5465), (Fax: 912-681-0719), e-mail: <xxxxxx@gasou.edu>

I believe the problem  you are facing is that you are trying to fix a problem
internally when the cause is external, ie, the State's fiscal policy of
having to spend all of the funds within the year.

To avoid these inconsistencies and problems you have pointed out, I suggest
you get with your accounting folks at the University and  with their help,
discribe your problem to the State's fiscal staff.  You should be able to
point out to the State that it is in its best interest to amend its policies
regarding this issue.  By allowing you to accrue for everyone (an accounting
term to recognize an incurred expense which has not been paid or used up) the
earned but unused vacation, thereby charging the grant or contract in the
form of a fringe benefit rate, will lessen the state funding to the
university (if you can dollarize the savings that would be great).

In other words, what you are describing is simply one bad policy (ie the
states fiscal policy ) begetting one or more policies which may:
-  cause inconsistencies and possibly, poor moral among university personnel
-  be non-compliant with federal regulations.

--
Charles Whitaker
Desert Research Institute
Energy and Environmental Engineering
(702) 677-3186
(702) 677-3232 - FAX
xxxxxx@sage.dri.edu