Numerous good ways to handle leave accrual on sponsored program
funds.    Some will or will not work, depending on other things in your
personnel system.  There's no clear cut best answer.  Look carefully at
your F&A rate agreement before trying to decide on a way to do this.  The
agreement may have specific language that affects what you do.  A change in
that might be enough of a change in accounting practices to require a
revised DS-2.

Few Universities, hospitals or non-profits have a "productive time" charge
to awards.  That is one where time and effort including leave time and also
employee benefits is accumulated in one account, and the actual "productive
hours", which include costs of leave and benefits is charged per productive
hour to each account on which an individual works.  Many commercial firms
cost projects this way.

The opposite end of the spectrum is "take it or loose it".  To use this
policy it must be clear in writing and supervisors must not be allowed to
prevent people taking leave.  This is the easiest to administer.

A leave accrual account is much like "productive time" billing.  The charge
to the project for each hour/day worked has a leave increment cost above
the base cost, but leave time is charged to the leave accrual account.  To
use it be very sure your federal auditor approves, because it can look like
you overcharge the project.

It is also possible to have a different leave accrual account in which
leave earned but not taken when on a project is lump-sum charged to the
award on the last day and accrued.  A significant problem here is to assure
that the project is managed so that there is budget remaining to cover the
lump-sum charge.  Again, be very sure your federal auditor approves,
because it can look like you overcharge the project.

Any method needs to be able to handle personnel charged to more than one
project at a time, including non-sponsored programs.  It is when people are
partially sponsored program funded and partially other funded that it
becomes difficult to put in place some leave pay accumulation program.

Looking at all of these methods leads to a different matter:  However leave
is handled, the budgeting/accounting system that provides the PI
information for managing the project should have a system of obligations of
personnel time/cost.  Most systems obligate purchase orders, but many do
not obligate personnel cost.  Yet personnel costs are the largest cost in
almost every sponsored program!

Chuck

At 11:48 AM 3/17/2004, you wrote:
>How do you handle the charge for leave accrual on grant funds? Some
>schools have told me that they charge monthly a % through their payroll
>and it is transferred into a Leave Accrual account.  Some schools charge
>the grant at the end of the grant period for the leave of the grant personnel.
>
>Gloria A. Barnes
>Senior Grants Accountant
>The University of South Dakota
>210 Slagle Grants Accounting
>414 E. Clark
>Vermillion, SD 57069
>phone 605-677-5077
>Fax 605-677-5078
><mailto:xxxxxx@usd.edu>xxxxxx@usd.edu
>
>
>
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Herbert B. Chermside, CRA
Virginia Commonwealth University
PO BOX 980568
Richmond, VA  23298-0568
Voice:  804-827-6036
Fax     804-828-2051
e-mail xxxxxx@vcu.edu

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