At Mississippi State we developed a terminal leave pool and established a rate that we charge every account, regardless of source, as a fringe benefit.    The rate is nominal and based on actuarial calculations.   As a result, the pool is funded each month based on service performed.   If an employee terminates, the pool pays for terminal leave buy out.   Hence, all accounts, grant and non-grant, are treated consistently, and charged [their] appropriate share for the services rendered, when rendered.

As far as your specific question at hand, I would think if you could tie the severance to services rendered to the grant you would be okay.  However, that would be very difficult to do unless you have a specific system like FIFO or specific identification of the accrued leave inventory held by the terminating employee.

Hope this helps.

Matthew Ronning
Sponsored Programs
Mississippi State University
PO Box 6156
Mississippi State, MS 39762
601/325-7404 - phone
601/325-3803 - fax
xxxxxx@spa.msstate.edu
www.msstate.edu/Dept/SPA/

>>> <xxxxxx@WINONA.MSUS.EDU> 10/27 8:03 AM >>>
I have a question about severance pay in grant proposals.  The Director of our
Student Support Services grant retired and our Budget Director is saying
severance pay -- a significant amount of money -- must come out of grant funds.
 The feds have told her this is an allowable expense.  This may have a
devastating effect on the grant project.  My actual question, however, is:  I
have never heard of including severance pay in an original grant proposal.  Has
 anyone out there done this?

Nancy Kay Peterson
Director of Grants
Somsen Hall, Room 202-C
Winona State University
Winona, MN  55987
Phone:  507/457-5519
FAX:       507/457-2415
email:    xxxxxx@winona.msus.edu
Web:     http://www.winona.msus.edu/grants/index.html