We consider participants to be non employees and pay them through our
Scholarship/Fellowship system.  They render no service to the University
according to our payroll office and the REU appointment is considered a
training experience.  No fringe benefits are charged because none are
provided, and a 1099 is prepared for their stipend.

We further caution our PI's that REU funds are not to be used to hire
student employees, but to mentor selected undergraduates in a research
experience.

Chris McNabb
Financial Coordinator

University of Oklahoma
Post Award Financial Services
731 Elm Avenue, Room 134
Norman, OK  73019

Phone: (405) 325-4429
Fax: (405) 325-0165
e-mail: xxxxxx@ou.edu

-----Original Message-----
From: Shannon Davis [mailto:xxxxxx@UARK.EDU]
Sent: Monday, December 22, 2003 4:21 PM
To: xxxxxx@HRINET.ORG
Subject: Re: [RESADM-L] RESADM-L Digest - 18 Dec 2003 to 19 Dec 2003
(#2003-248)

Happy holidays.

I have a set of questions related to paying students receiving funds for
participation in REU training programs and other similar programs.  Can you
tell me how you pay your REU students and other students who are receiving
funds while in a program that is specifically designed to be training
oriented and not employment by the institution?  Do you pay them straight
stipends with no deductions or do you enter them in the payroll as employees
and deduct withholding, fringes etc.?  Which approach do you believe
benefits the students most?  What do your institutional tax experts tell you
about handling these types of payments to students?  Any information on how
you handle this situation at your institutions would be helpful.

Shannon G. Davis Ph.D., CRA
Assistant Director
Research Support and Sponsored Programs
University of Arkansas
Fayetteville, AR  72701
479.575.3845
xxxxxx@uark.edu

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 subscription information and a web-searchable archive, are available
 via our web site at http://www.hrinet.org (click on "Listserv Lists")
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