University Practices related to Personal Services

According to University practice, when employees are paid, the costs related to their fringe benefits are calculated based on the approved fringe pool rate and charged to the same fund(s) their salary is paid from. As a general statement, it can be assumed that charges for personal services related to grants and contracts will follow regular University practice. Following is a summary of how various types of leave and separation payments are handled by the University as a whole and related to grants and contracts specifically, with references to grant regulations. Section references below are from OMB Circular A-21 which provides guidance related to compensation of Personal Services.

Normal paid absences such as annual leave, sick leave, et cetera are also charged to the fund(s) which an employee’s normal pay is charged. According to section J.10.f(1) this method of allocating costs is allowable “provided such costs are distributed to all institutional activities in proportion to the relative amount of time or effort actually devoted by the employees.” This is also in compliance with OMB Circular J.10.b.(2)(e) which specifies the criteria for acceptable methods of payroll distribution (time-effort reporting.) Within this section, it is stated, “Short term (such as one or two months), fluctuations between workload categories need not be considered as long as the distribution of salaries and wages is reasonable over the longer term, such as an academic period.” It would follow that adjustments for longer term fluctuations, including leave for a longer period of time, would need to be reflected in the employees time effort report and could result in a portion of their time not being allowable on a grant or contract as originally estimated in the budget.

According to Missouri State University Human Resource Policy G7.02-10 - Grievance Procedures, in certain circumstances, employees may be suspended either with or without pay, as determined appropriate by the University, pending the outcome of the grievance procedure. According to University practice, if the employee is suspended with pay, then the fund(s) their salary is normally paid from will continue to be charged. However if an employee has been working on a grant, it is our opinion that if the suspension is due to lack of performance, mismanagement of duties or improper actions, this constitutes an exceptional situation and the costs of the related leave would not be allowable on the grant or contract. Also in support of this opinion, because of the potential length of time involved in the grievance procedures, which could stretch beyond the two month period referred to in J.10.b.(2)(e) above and because the employee is not putting forth any effort on the grant or contract during the time they are suspended, the time effort form would need to be adjusted accordingly and payments made during the suspension would not be allowable on the grant or contract. It is also our opinion that these costs should not be charged to the fringe pool fund, but would need to be charged to another University fund. This opinion is supported by our consultants who help prepare and negotiate our facilities and administrative and fringe rates and who have insight into proper allocation of costs to grants and contracts and fringe pools.

When an employee leaves the University, accrued vacation leave and a portion of accrued sick leave in the case of retiring individuals, is not charged to the fund they were paid out of during their employment, but rather the University fringe pool fund is charged. This same methodology is used in relation to employees who have been charged to a grant or contract during their employment.

At certain times, employees of the University are eligible for retirement incentive programs. In the past, the related costs have been designated to specific areas of the university, typically at the college and administrative levels - although they could possibly be charged to the fund(s) they were paid from formerly. If an employee has been working on a grant or contract, it would not be allowable for these costs to be charged to the grant or contract fund.