Financial Liaison Meeting August 31 2009 Negotiated

Financial Liaison Meeting August 31, 2009

Negotiated Fringe Benefit Rate

Proposed benefit rates • Effective 10/1/2009, contingent upon Federal approval, the following percentages will be used in recording benefit expense on AU salaries and wages • Full time personnel (including summer) • 33. 19% FY 2010 34. 96% FY 2011 • Part time personnel • • 11. 79% FY 2010 12. 07% FY 2011 Graduate Assistants • 2. 95% FY 2010 3. 10% FY 2011

Current Methodology Salaries and wages are budgeted based on actual individual salaries • Benefits are budgeted based on an estimated rate – 28. 5% for FY 2010 • Salaries and wages are expended based upon an individuals effort on a project • Benefits are expended based upon the actual benefits package that a person has chosen •

Example of Current

Negotiated Fringe Benefit Rate • • • Rate established based upon most recent completed fiscal year data Includes benefit costs that the University pays but does not currently charge to units – PEEHIP, Graduate health insurance, employee tuition waivers Proposal sent to Federal Government for review and negotiation Rate agreement signed by both parties similar to the rate agreement for F&A costs Same rate charged to all salary expenses in a specified classification of employee

Example of Negotiated Rate

Pros and Cons of a new rate cons pros Improved cost recovery • Each unit pays their fair share of benefit costs • Improved forecasting and expectation • Easier – budgeting, salary and wage transfers, budget transfers, service centers • • FY 2010 some fops will go into deficit because the original budget is not sufficient – contracts, soft accounts, auxiliaries

Steps going forward - - Budget Issues • Rate will be charged beginning October 1, 2009 • Budget deficits in soft and auxiliary accounts must be covered by units (same as currently). Budget carryover and deficits in base budget accounts will be swept (handled as currently done in FY 10). • Budget change will not occur until FY 11 fiscal and specifics will be addressed in FY 11 budgeting process • We anticipate that benefit budgets will be treated as salary and wage budgets are currently

Fringe Labor Distribution Discussion

Fringe Questions? ? ?

American Recovery & Reinvestment Act (ARRA) www. auburn. edu/arra

The American Recovery and Reinvestment Act (ARRA) of 2009, also referred to as the Federal Stimulus Plan or Recovery Act, was approved by Congress and signed into law by President Obama on February 17, 2009. The stimulus initiative is designed to jump start the U. S. economy through federal spending on such programs as education, energy, health care, housing and transportation investing in products and services that will put Americans to work, improving infrastructure and allowing for enhanced or continued research. The State of Alabama expects to receive approximately $3 billion for existing programs over the next two years. About $958 million in stimulus money will go to education in Alabama. Details of Alabama’s allocation can be found on www. stimulus. alabama. gov.

What Can Auburn Expect to Receive Stimulus funds are available to Auburn University from two sources: State Fiscal Stabilization Funds (SFSF) and Competitive Federal Awards. State stabilization funding allocated to Auburn University for the fiscal year 2010 from the Governor’s Office: • Auburn Main Campus $16, 902, 753 • Auburn Montgomery 2, 104, 584 • Alabama Agriculture Experiment Station 3, 251, 045 • Alabama Cooperative Extension System 3, 625, 026 Total Auburn SFSF $25, 883, 408 It is expected Auburn will receive an equivalent portion of funding in FY 11 but at this time only 90% of the two year total has been obligated. A listing of competitive federal awards received by Auburn can be found on www. auburn. edu/ARRA/

Recipient and Sub-Recipient Reporting ARRA includes unprecedented level of transparency and accountability. Clauses and provisions are being added to contract and grant language to legally obligate recipients to meet all reporting requirements under the Recovery Act. Section 1512 of ARRA requires all recipients of federal funds appropriated in ARRA to report on the use of these funds within 10 days of the end of the quarter. Reporting will occur using Federal. Reporting. gov which is the central portal established for recipient reporting. The State of Alabama has added additional monthly recipient and subrecipient reporting requirements on all ARRA funding secured. Forms must be submitted to the state within 10 days of the end of each month. The University’s Central Business Office will work with each division, the Office of Sponsored Programs and Contract & Grant Accounting to ensure funds are spent in accordance with guidelines provided by the Act.

How Can Institutions of Higher Education Use SFSF? Section 14004 (a) of the ARRA authorizes a public IHE to use Education Stabilization (SFSF) funds for: Education and general expenditures, in such a way as to mitigate the need to raise tuition and fees for in-State residents; or • Modernization, renovation, or repair of IHE facilities that are primarily used for instruction, research, or student housing, including modernization, renovation and repairs that are consistent with a recognized greenbuilding system. •

Are there statutory prohibitions on IHE’s Use of SFSF? Section 14004 (b-c) prohibits use for following purposes or activities: • • • To increase endowments General Maintenance of systems, equipment or facilities Modernization, renovation or repair of stadiums or other facilities primarily used for athletic contests or exhibitions or other events for which admission is charged the general public Modernization, renovation or repair of facilities used for sectarian instruction or religious worship or which in which a substantial portion of the functions of the facility relate to a religious mission New construction

Types of Expenditures that Support IHE SFSF Include: • Support for salaries related to classroom and laboratory instruction and instructional technology • Academic support for libraries, laboratories and other academic facilities • Institutional support for activities related to personnel, payroll, security, environmental health & safety, and administrative offices • Student services that promote a student’s emotional and physical well being outside the context of formal instruction program

Tracking Specific to Auburn All stimulus projects will be tracked using a specific block of funds within the Banner web-based financial system. The current identifiers are: 101099 FY 10 Division 1 (Main) SFSF 102099 FY 10 Division 2 (AUM) SFSF 103099 FY 10 Division 3 (AAES) SFSF 104099 FY 10 Division 4 (ACES) SFSF 219 xxx Division 1 Competitive Stimulus Grants 3501 xx Division 2 Competitive Stimulus Grants 381 xxx Division 3 Competitive Stimulus Grants 382 xxx Division 4 Competitive Stimulus Grants 9219 xx Division 1 Stimulus Renovations Your organization, account and program code will be consistent with your current practice

SFSF Guidelines • SFSF funding is effective October 1, 2009 and runs through the fiscal year ending on September 30, 2010. • If labor and benefits are to be charged against a stimulus account, an EPAF must be submitted using a new stimulus fund. Organization, account and program code remain unchanged. EPAFs should be prepared and submitted during the period October 1 - October 9 • EPAFs for bi-weekly employees must have an effectivity date of September 27 • EPAFs for all other employees must have an effectivity date of October 1. •

Calculating Salaries and Benefits • Identify personnel being allocated to stimulus. • Ensure salaries plus benefits charged are inline with dollars allocated to your area. To ensure you appropriate cost are allocated, use these fringe rates. Full Time: 33. 19%; Part Time: 11. 79% ; Graduate Students: 2. 95% • We believe all employees on stimulus funds will have to participate in Quarterly Effort Reporting. Mandatory completion of form is required or funding will be discontinued and reassigned.

Job Retention and Creation • All agencies receiving ARRA funding must provide information on Jobs created and retained, along with a description of the job. • The number must be expressed as “full-time equivalent” (FTE), calculated cumulatively as all hours worked divided by the total number of hours in a full-time schedule. Example: 5 people work 15 hours per week for 4 weeks Hours Worked - 5 people x 20 hours x 4 weeks = 400 hours worked Typical Work Load for 5 people for 4 weeks = 5 x 40 x 4 = 800 hours Calculation 400 / 800 =. 5 FTE

Stimulus Guidelines - Vendors • If an external vendor is being paid with stimulus funds invoices must be for services rendered between October, 2009 and September, 2010. • All PPS procedures remain in place • Note “Buy American” Clause in ARRA • Vendors will be asked to complete a stimulus form forwarded by PPS or Facilities

Vendors Information: DUNS Number, Name and Zip Code of Headquarters • Expenditure Amount • Product/Service Description • • Jobs Created and/or retained Reported in aggregate on payments less than $25 K. Reported by vendor on payments $25 K or more. PPS & Facilities will be forwarding a pre-designed form to vendors to capture data. Information will be consolidated in ARRA database.

Special ARRA Program Requirements • Any external laborers and mechanics employed by contractors or subcontractors on modernization, renovation or repair projects must be paid in accordance with the prevailing wage requirements (commonly referred to as Davis-Bacon – see section 1606 of ARRA). Applies to all contracts in excess of $2000. • Note: This does not apply to internal AU employees performing work. • Important to ensure contracts include language supporting the need for the contractor to track and report wages to AU. Audit of information required. • Facilities has performed an extensive analysis on DB requirements (contact Jack Lee or Bob Moseley)

Special Regulations: BUY AMERICAN Requirements - Section 1605 of the Act - Use of American Iron, Steel and Manufactured Goods (applies to public works). Limited exceptions to this rule. • Projects involving construction, alternation, maintenance or repair of a public building or public work fall under these award terms. Use American made iron, steel, and manufactured goods in the project unless international law requires otherwise or unless one of three exemptions applies: Comparable domestically produced goods require to complete the project are not available • The cost of compliance would exceed the cost of noncompliance by more than 25% • The federal agency responsible for administering ARRA funds determines a waiver is justified in public interest • • Whenever possible - buy American

Monthly Progress Report • Units receiving SFSF funding must submit monthly progress report to Cindy Selman by 3 rd day of each month. • Metrics should be established and reported monthly on each project. • Include the Status of project (percentage complete) and anticipated close out date. • Include information on Jobs (FTE) retained or created, along with description of job (grouping is fine).

Projects Which Will Receive SFSF Allocation – Provost Area $ 9. 2 M Funding GTA, Part-Time and Temporary Faculty Position 100 K Nursing Position with salary and benefits 150 K Graduate Opportunity Program (fellowships thru Diversity). Need to discuss process 750 K Honors Program directed to cover personnel salaries & benefits (need to validate personnel) $ 1. 2 M Library Elsevier Contract (Provost to provide exact amount) Allocation Directly to Provost Office $11. 5 M

Other SFSF Allocations $ 1. 0 M Install/Upgrade Wireless on Campus (OIT w/ Facilities assistance) 200 K Increase capacity of Blackboard learning, Pod Cast (OIT w/Facilities assistance) 755 K Upgrade classrooms to provide multi-media capabilities (OIT w/ Facilities assistance) 780 K Safety Equipment purchases: Cameras, Cable Emerg Alert, AEDs, Fire Alarm Panels, PA, T 3 s (no labor against stimulus) Final proposal to be discussed 118 K Enrollment Recruiters (two existing positions) 400 K Late Night Shuttle (Transit System for students) $2. 15 M Renovation projects (final list prioritized)