There are two sources of a gap in Fringe benefits.  Collectability based on
how the rate is applied and an appropriate rate proposal and calculation.
Any billing rate traditionally does not have 100% collectability.  A fringe
benefit rate,however,  should have a very high rate of collectability,
because it should be applied to all outside source of funds supporting
salaries, well maybe not all but certainly close to it.  This however does
not preclude the fact that the Fringe Rate proposal and calculation should
include all appropriate benefit expenses that relate to the salary base
being used.

Actually there is one more situation in which a "gap" exists. Some
institutions charge the actual fringe benefit expenses based on the
specific benefits of an individual and then compare this to a Fringe
billing rate that may be lower.   This should be avoided if possible
because the government allows you to use the pooled expense method and
therefore the institution's overall collections should be compared to the
institution's overall benefit expenses.  This would limit any gap to the
first two examples stated above.

As far as what revenue source is used to cover a gap---If there is an
unrecovered amount of Fringe Benefits at this institution there is no one
source of revenue that is identified to cover the gap because it would be
considered a general institutional deficit and would be covered by all
revenue streams that exist.

I know this is a long answer to a short question.

_______________________________________________________________________________
From: Research Administration Discussion Group on Thu, Jan 25, 1996 2:26 AM
Subject: Fringe Benefits Gap
To: Charlie Tardivo

A difference exists in the fringe benefit rate between what an institution
pays its faculty and that chargeable to federal grants.  I would guess that
many institutions experience this gap and I would like to know how your
institution covers this expenditure gap.  Do the funds come from: (a)
educational and general funds; (b) indirect cost recoveries; (c) both;
(d) other sources?

Any other pertinent information you wish to provide is also welcome.

Please send your replies directly to me at xxxxxx@oduvm.cc.odu.edu and I
will post the results in summary form.  Thank you.

Sincerely,
Steve Hoagland
Old Dominion University

Charlie Tardivo
Director of Grant Administration and Accounting Operations
Whitehead Institute for Biomedical Research
Cambridge  MA  02142
phone: (617) 258-5107
fax:  (617) 258-6294
e-mail: xxxxxx@wi.mit.edu