A caveat. Any use-or-lose annual leave policy for personnel on federally
sponsored agreements will have to take into account the "Compensation for
personal services" section of OMB Circular No. A-21 (revised):
"Compensation for personal services...include salaries, wages, and fringe
benefits (see subsection f).  These costs are allowable to the extent that
the total compensation to individual employees conforms to the established
policies of the institution, CONSISTENTLY APPLIED...." [emphasis added]
 The caveat recently was underscored for our institution.  We received the
following interpretation of the Circular's "consistency requirements" from
one federal agency's Division of Cost Allocation: "Consistent
organizational treatment of cost is a fundamental tenet and basic
consideration (section C.2) affecting allowability of cost on Sponsored
Agreements.  In addition, Appendix A of this Circular requires compliance
with four Cost Accounting Standards.  Since two Standards involve
consistency concepts, it is quite clear that OMB considers uniform cost
accounting policy and procedures to be of paramount importance.  ...  (A)
proposed policy (that) REQUIRES [emphasis in original] just those employees
working on Sponsored Agreements (rather than all University employees) to
take 'forced' vacation time so there are no accrued leave balances at
completion of a Sponsored Agreement...seems to violate both consistency
standards because it: (1) Is too exclusive and restrictive -- only certain
(not all) employees are subject to this policy; and (2) Discriminates
against the Federal Government -- artificially inflates direct cost ONLY
[emphasis in original] on Sponsored Agreements by requiring this 'forced'
vacation time off.  ...  Accordingly, we believe that implementation of
(such a) proposed policy would produce cost disallowances for any 'forced
vacation' claims (plus appropriate interest charges)."
 The operating systems for Sponsored agreement policies get curiouser and
curiouser.

Howie Kaplan

At 11:04 AM 11/18/98 -0600, you wrote:
>We are considering establishing a University policy requiring all
>employees funded through grants to use, or lose their annual leave by
>the end of each grant year.  State-funded employees may be paid for up
>to 300 hours of accrued annual leave when they terminate their
>employment.  At the present time annual leave is not factored into our
>fringe calculation.  Does anyone have a policy like this at their
>institution?   Thanks.
>
>John Cavendish, Director
>Sponsored Research and Contracts
>Southeastern Louisiana University
>
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Howard M. Kaplan, Director
Research Services & Sponsored Programs
Georgia Southern University
P.O. Box 8005, Highway 301 So. Building
Statesboro, GA 30460-8005
Tel. 912-681-5465; FAX. 912-681-0719; e-mail. xxxxxx@gasou.edu
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