POLICIES & PROCEDURES
FAU Establishes Pool for Benefits and Terminations - 99-01
October 7, 1998

Background:

To conform with Federal Cost Accounting Standards for universities and the Federal Office of Management and Budget Circular A-21, " Cost Principles for Educational Institutions",Sponsored Programs has determined that the University needs to prepare for all future liabilities for costs associated with employee benefits. For example, the university needs to have funds available when an employee terminates or retires. Other costs that need to be planned for include premiums for worker's compensation, current claims for this area, as well as unemployment insurance claims, general liability and casualty insurance, and several other assessments made by the Board of Regents (BOR) to all state universities.

Purpose:

To ensure the University's ability to meet its future obligations, a Benefit and Termination Pool account will be established. The current fringe benefits rate used in budgeting will remain the same. The Controller's Office and the University Budget Office will review the account on an annual basis.

Policy:

Effective as of the date of this letter all sponsored programs will continue to be charged an appropriate percentage of salaries, and these funds will be transferred the newly established Benefit and Termination Pool account. Subsequently, claims for the above-mentioned costs outlined in the background section will be charged to the pool account. The Contracts and Grants accounting office will determine if a particular cost is eligible and will book all allowable costs. This policy will cover all employees paid from a contract or grant within the Sponsored Research Trust Fund, except for employees paid out of the Fund for payroll processing purposes only (i.e., agency fund employees, local unrestricted fund employees, athletic fund employees and some FAU Foundation employees).

Procedures and Components:

1. Separation Costs - all line employees who are separated due to termination or retirement may be eligible for a cash pay-out of accrued annual leave and possibly 25% of accrued sick leave. The payout will be prorated based on the funding sources over the past three years (i.e. the employee may have been paid out of more than one fund during his employment years or, the employee may have worked for one of the Colleges and paid out of educational and general funds and later transferred to a grant account and paid out of the Sponsored Research Trust Fund).
2. . All premiums for workers' compensation and unemployment compensation, general liability and casualty insurance for employees funded by sponsored program awards, will be charged annually to the pool account.
3. Every six months the pool account will be assessed with personnel processing costs by the Board of Regents' Human Resource Department.
4. Throughout the fiscal year, the pool account will cover costs for workers' compensation claims and unemployment claims associated with employees covered by the pool.
5. The cash balance in the pool account will be monitored quarterly to set future rates for charges to accounts within the Sponsored Research Trust Fund. (Except for those employees noted above under the policy section.)

Send comments to Camille Coley or Penny Ashwanden

Page updated July 2006 by Dianne Parkerson; Names updated July 2008