ORIGINATING AGENCY: OFFICE OF MANAGEMENT & BUDGET

EFFECTIVE DATE: JULY 1, 1993

EXPIRATION DATE: INDEFINITE

SUPERSEDES: 85-15-OMB

SUBJECT: REIMBURSEMENT FOR EMPLOYEE BENEFITS

ATTENTION: DIRECTORS OF ADMINISTRATION AND CHIEF FISCAL OFFICERS

FOR INFORMATION CONTACT: RICHARD BRUNO
PHONE: 292-5959

I. AUTHORITY FOR COST RECOVERY

As provided in the Annual Appropriations Act, the Director of the
Office of Management and Budget is required to credit or transfer to the
Department of the Treasury, or to the General Fund, from any other
department, branch, or non-State fund source, such sums as may be
required to cover the State's costs for its share of the employees' payroll
fringe benefits as he may determine.

Agency liability for these costs exists whether employee salaries
are charged directly to a non-State salary account or are paid initially
from the Direct State Services salary account and subsequently refunded.

The Office of Management and Budget will determine those accounts from
which the State is to recover employee benefit costs and any cost recovery
limitations applicable thereto.

Recoverable employee fringe benefit costs include the employer contributions
for pensions, non-contributory group life insurance, F.I.C.A. taxes, health
benefits, and unemployment compensation.

Agencies will be notified of effective rates for fringe benefit charges
under a separate Circular Letter by the Office of Management and Budget.

II. EXEMPTIONS

Requests for exemptions from the charging of employee benefits to
specific non-State accounts must be submitted to the Director, Office of
Management and Budget. Such requests must contain the justification
for the exemptions.

If the justification is acceptable, the requesting agency will be
notified in writing by the Office of Management and Budget. Such exemptions
will be effective for one State fiscal year only, unless the written
notification states otherwise.

III. ESTABLISHMENT OF EXPENSE BUDGET

For any program funded from other than Direct State Services sources for
which employer contributions are required for employee benefits, the agency
shall establish an amount equal to the estimated liability for such
contributions for the entire fiscal year at the time the project appropriation
expense budget accounts are established.