To:
DASACC Financial
Contacts
From: Paul Carlson
Date:
Subject: A-87 Compliance re: terminations
This memo is
being sent to ensure agencies are in compliance with Federal requirements
regarding the cost of leave when an employee retires or terminates
employment. OMB Circular
A-87, Attachment B, Paragraph 11.d.(3)
states:
When a governmental unit uses the
cash basis of accounting, the cost of leave is recognized in the period that
the leave is taken and paid for.
Payments for unused leave when an
employee retires or terminates employment are allowable in the year of payment provided
they are allocated
as a
general administrative expense to all activities of the governmental unit or
component.
This means
that agencies should not be using grant money to pay sick or vacation leave
when an employee retires or terminates from the State. Agencies should code payments for this leave
as an expense to their general administrative activities. It is not proper for agencies to use the
same cost account as the last salary payment.
If you have
coded this leave to a Federal grant between July 1, 2004 - June 30, 2005,
please notify Lynda Roesler as soon as possible
(email: lroesler@notes.state.ne.us, ph.
471-7737). You will need to provide her
with documentation of the leave payout including BU charged and support for the
amount of the payoff.
Attached is
the new State Accounting Policy regarding Termination Payoff for Employees
Working on Federal Grants.
If you have
any questions, please contact me. If
this email has not been sent to the appropriate person, please forward it to
them.
Thank you.
Attachment:
General Policy # 31
Termination
Payoff for Employees Working on Federal Grants – To ensure agencies are in compliance with OMB
Circular A-87, Attachment B, Paragraph 11.d(3),
agencies shall code sick leave payoffs or vacation leave payoffs for employees
who are working on a Federal grant, either part-time or full-time, to an
account number under their agency’s general administrative activity.
Added:
Agencies should use the correct Pay Type for coding
leave payouts found at http://www.das.state.ne.us/nis/trainingmanuals/Payroll ,
Lesson
2, Pay Type Descriptions.