Fringe Mitigation Update

On September 1, 2018, the University moved to a pooled fringe rate. This new business process could have had an impact on you if your grant/contract accounts (26 accounts) budgeted fringe at less than the new rates. We previously communicated that the University will provide funds to compensate your grant for fringe expenses above your budgeted amounts for any award that was proposed prior to August 10, 2018.

In order to facilitate a more streamlined approach to this mitigation, we will be implementing a “re-direct” of fringe for these accounts starting with payroll runs after April 1, 2019. This re-direct will reduce fringe charges to your grant by 4% of the salary expenses. Each month, you will see fringe equal to the pooled rate (currently 29% for most employee categories) charged to your grant and another entry immediately following moving 4% of these charges off your grant. OSP will bill sponsors for the pooled rate less 4%. In a few cases, this 4% redirect will not be sufficient, so we will continue to monitor all grant/contract accounts that experience deficits in the fringe category and apply additional mitigation for those on an as need basis. This mitigation will continue until August 31, 2024 for 26 accounts that were eligible for the mitigation plan.

For fringe expenses that have been charged to grant/contract accounts between Sept. 1, 2018 and April 1, 2019, we will prepare a one- time journal entry to move the fringe equal to 4% of salaries/wages during that period off of your grant/contract account (we will not move prior fringe expense on any 26 account that is already closed).

For questions or concerns about this new process, please contact Renee Gonzales, Assistant VP for Research & Director, OSP (512-471-6618; rkgonzales@austin.utexas.edu).