51ÔÚÏß

Research CCHIP #013

CLARIFICATION OR CHANGE IN PROCEDURE (CCHIP)

Cashing-Out Unused Annual/Sick Leave Balances on Sponsored Projects

OVERVIEW

Each eligible employee appointed to an established position at the University of South 51ÔÚÏß accrues annual and sick leave hours at the end of each pay period based on their type of appointment and pay plan. Please refer to the Leave Administration procedures below for specific details regarding the accrual of annual and sick leave.

All eligible employees will be paid for unused annual and sick leave up to the allowable maximum upon transfer from a leave-accruing position to a non-leave-accruing position or when the eligible employee separates from employment with USF. Please refer to the Leave Administration procedures below for specific details regarding payment for unused leave balances.

The payment of unused annual and sick leave is considered a fringe benefit that shall be treated in the same manner as the salaries of the employees receiving the benefit. If the salaries are treated as a direct cost of a sponsored project, the fringe benefits related to those salaries shall also be treated as direct costs.

The 51ÔÚÏß charges a fringe benefit expenditure to sponsored projects and other restricted funds, including contracts and grants, convenience accounts, endowed chairs and research initiative accounts, based on a percentage of the total monthly salary expense. The fringe benefit funds are accumulated in a central pool to fund terminal leave as well as worker’s compensation premiums and unemployment benefits.

DEFINITIONS

Allocable Cost – Goods or services incurred solely to advance the work under the sponsored project that benefit both the sponsored project and other work at USF, in proportions that can be approximated through the use of reasonable methods, or necessary to the overall operation of USF and deemed to be assignable in part to sponsored projects.

Allowable Cost – Goods or services that are reasonable and allocable to sponsored projects that are given consistent treatment through application of generally accepted accounting principles appropriate to the circumstances and that conform to any limitations or exclusions set forth in this CCHIP, agency guidelines or sponsored project.

Annual Leave – A fringe benefit provided to eligible employees to take time off from work for paid vacation and other personal reasons.

Cashing-Out – A lump-sum payment of unused leave balances paid to eligible employees.

ChartField – Individual components, or fields, that when combined make up the ChartField String, which defines the accounting structure.

Fringe Benefit – Non cash employee compensation in the form of employer paid contributions for social security, medical insurance, life insurance, etc. or cash compensation in the form of regular compensation paid to employees during periods of authorized absence from work such as annual leave, sick leave, military leave, etc.

Pooling – On a monthly basis, USF charges a fringe benefit expenditure to restricted funds based on a percentage of the total monthly salary expense. The fringe benefit funds are accumulated in a central pool to fund terminal leave, worker’s compensation premiums, and unemployment benefits.

Reasonable Cost – Goods or services acquired or applied, in an amount that reflects the action that a prudent person would have taken under the circumstances prevailing at the time the decision to incur the cost.

Restricted Funds – Fund sources that are subject to stipulations of use based on donor or agency guidelines or regulations.

Sick Leave – A fringe benefit provided to eligible employees that permits time off from work with pay primarily, although not exclusively, for personal and family medical reasons.

Sponsored Project – Any grant, contract, or other agreement between the 51ÔÚÏß and a sponsoring agency.

CLARIFICATION OR CHANGE

The cashing-out or payment of unused annual and sick leave balances is considered a fringe benefit and is an allowable cost to the fringe benefit pool if treated in the same manner as the salaries of the employees receiving this benefit.

The payment should be distributed to the fringe benefit pool and all institutional fund sources in proportion to the relative amount of time or effort devoted by the employee at the time of pay-out.

PROCEDURES

Please refer to the following USF procedures related to sick and annual leave:

• Leave Administration
• HR Procedures for Cashing-Out (Payment For) Unused Leave Balances
• USF Fringe Benefit Pool

Departmental Attendance & Leave (A&L) Coordinator

• Conduct a thorough leave audit prior to any annual/sick leave cash-out

Department Administrator

• Coordinate with the Departmental A&L Coordinator to ensure that the correct accounting distribution is indicated on the employee’s last pay distribution. If not, submit an email with the correct distribution to Payroll for processing the cash-out.

University Payroll

• Match annual/sick leave cash-out hours to the Automated Leave Tracking (ALT) system and process the payments
• Allocate the payout according to the last pay distribution
• Input adjustment hours into the ALT system to zero-out annual/sick leave balances once the cash-out is verified and processed

Research Financial Management

• Perform periodic compliance reviews of annual/sick leave cash-outs

CONTACT

Please address your comments or questions regarding this CCHIP to Sponsored Research Compliance.

AGENCY GUIDELINES

EFFECTIVE DATE

This CCHIP is effective as of the date of revision and rescinds all previous versions pertaining to Cashing-Out Unused Annual/Sick Leave Balances on Sponsored Projects.

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ISSUED: June 30, 2008
LAST REVISION: January 27, 2011