There have been several questions that have come up in regards to the current budget transfer policies. This web page is an attempt to answer the majority of those questions.
Are departments responsible for deficits in their fringe benefit budgets at year end?
Yes, all departments are responsible for deficits including, but not limited to, fringe budgets.
What fringe rate should be used on General Fund budget transfers?
The fringe rate to be used on General Fund budget transfers (regardless of whether they are increasing or decreasing the General Fund amounts) should be the fringe rate that is budgeted in the General Fund.
In FY09 the fringe rate that was originally loaded was 45.2%. Half-way through the year the fringe rate was reduced to 43.1%. Therefore, for the first half of the year, all General Fund budget transfers that involve a fully fringed salary amount would also move 45.2% in fringes, of that salary amount. However, for the second half of the year, these types of budget transfers would move 43.1% in fringes.
When are fringes transferred back to the General Fund Fringe Reserve?
Any time a salary budget is transferred to a non-salary budget, the associated fringes are transferred to the General Fund Fringe Reserve. Also if a salary budget is transferred to a salary budget which has a lower fringe rate associated with it, then the difference is returned to the General Fund Fringe Reserve.
If a department transfers one thousand dollars ($1,000) from the P006 (Admin/Professional S&W Account Pool) to E200 (Services Account Pool); the associated fringes of four hundred and thirty one dollars ($431 = $1,000 * 43.1%) will be transferred back to A11973 (General Fund Fringe Reserve).
If a department transfers one thousand ($1,000) from P006 (Admin/Professional S&W Account Pool) to P501 (Graduate Students Account Pool); three hundred forty three dollars and fifty cents ($343.50 = $431 - $87.5) will be transferred to A11973 (General Fund Fringe Reserve). This amount comes from taking the total associated fringe amount and removing the portion that will still be used for fringes. In this case, Graduate Students have an 8.75% fringe rate and therefore 8.75% of the one thousand ($1,000) will not be transferred back.
When are fringes allowed to be transferred for Start-Up commitments?
When transferring budgets for Start-up commitments, it is important to keep in mind what is included in the Start-up package. If there are salary commitments made in the Start-up package, then the fringes will also need to be budgeted in the associated Start-up index. If you are using General Fund budgets to support a Start-up package that has a salary commitment, move 20.2% (summer fringe rate) of the fringes attached to the salary budget you are reducing.
For this to happen, a copy of the Start-up package agreement will need to be attached to the budget transfer form.
If a Start-up package has a thousand dollar summer salary commitment, then the Start-up package will need to have a budget of one thousand dollars ($1,000) in P004E (Faculty Extra Compensation) and a budget of two hundred and two dollars ($202) in B000 (Fringe Benefits). When moving the budget to a Start-up Index, you can reduce a General Fund fully fringe salary account pool (i.e. P004, P006, P007…) by a thousand dollars ($1,000) and the fringe account pool (B000) by the two hundred and two dollars ($202).
NOTE: As described in the question about fringe budgets being returned to the General Fund Fringe Reserve, the difference between the full fringe amount and the summer amount will be moved to the General Fund Fringe Reserve. In this example, four hundred and thirty one dollars ($431 = $1,000 * 43.1%) will need to be moved in total. Two hundred and two dollars ($202) of that four hundred and thirty one ($431) will be moved to the Start-up account. The remaining two hundred and twenty nine dollars ($229 = $431 - $202) will be transferred to the General Fund Fringe Reserve (A11973).
When are fringes allowed to be transferred related to release time?
When an outside sponsor agrees to pay for an academic year salary, a department then gains access to the General Fund budgeted salary and associated fringes for that salary. This is only possible when the release time is funded from an outside sponsor. This means that there is no cost share or other agreement in regards to the salary. In doing this transfer the associated fringes are transferred at the approved General Fund rate, regardless of the rate that is being paid by the sponsor.
For this transfer to be allowed, a copy of the payroll report which reflects the generated salary time in the associated Research index needs to be attached to the budget transfer request form.