Hi Brenda,

UArizona does not use an accrual system, but there was some exploration in the process recently and I would be glad to share a few nuggets on a call if you would like. One of the biggest takeways is that switching may be a difficult process with your cognizant agency that approves your rates. I’d recommend you start with your rate studies group and that agency to determine if they will even entertain it, or if they would negotiate a structure that is financially disadvantageous to you for making a switch (such as the cognizant agency undercutting the rate in negotiations that you will need to establish for full recovery).

Best,

Marcel

Marcel Villalobos

Assistant Director, Postaward Services

Sponsored Projects Services

The University of Arizona

Email: xxxxxx@arizona.edu | Phone/VM: (520) 626-6311

From: xxxxxx@lists.healthresearch.org <xxxxxx@lists.healthresearch.org> On Behalf Of Leuenberger, Brenda K.
Sent: Thursday, November 10, 2022 3:02 PM
To: xxxxxx@lists.healthresearch.org
Subject: [EXT][RESADM-L] PTO charged to grants: Accrual v. Cash

External Email

Dear Colleagues,

The University of Missouri is inquiring about charging grants for paid time off when the time is accrued by employees rather than when the employee is paid for their time used through their paycheck. We currently charge grants when time is used through their payroll. However, we are exploring switching to a new model in which grants would be charged at the time the leave is accrued and there would be no charge to the grant for time that the leave is used. The switch to accrual vs cash method of paid time off would occur at a point in time going forward leaving past balances unfunded.

Additionally, the new leave plan design has a PTO limit of 2x max accrual however only 10 days can be paid out upon separation from the University. We have inquired about factoring in a forfeiture of time for employees with more than 10 days at separation in order to determine a fair rate to charge but have not gotten a clear answer or understanding on whether that would be allowed for grants.

Therefore, we would like to hear about what other institutions are doing.

Are there any other institutions that are charging for paid time off at the time of accrual vs usage (i.e. accrual vs cash method)?
What is the manner in which the grant is charged?

Is it the actual leave accrued by the individual employee?
Is it a blended internal rate as a percentage of pay applied to all funding sources?
Is it part of your negotiated fringe rate and estimated based on past experience?

Do you have a max leave balance that is greater than the amount paid to an employee at separation?

If the leave paid out at separation is smaller than the balance allowed to be held by the employee, what rate do you charge the grant?
Are you allowed to charge the full rate of accruals (less estimated forfeitures)?

How do you factor in the accrual of PTO into the grant budget?

Thank you for your input!

Brenda Leuenberger

Associate Director, Pre-Award | Authorized Signing Official