A. When an employee terminates employment under a formal severance agreement, s/he may receive a lump sum termination payout. The full fringe rate is charged against the payout, even though the employee may not receive any additional benefits from the fringe components. The project team is proposing, therefore, that the fringe rate applied against the severance/termination payouts includes only appropriate components, such as FICA and Medicare.

Q. If we switch to the full accrual system for accounting for vacation, does this mean that vacation leave will have to be automated? If so, how will this be accomplished? Who will do the conversion?

A. The vacation accrual system will be automated; at this point, however, we do not know specifically how the system will work. We have considered a system tied into our current biweekly payroll, and are also looking for ways to tap into the capabilities of a new HR system. A project team will address issues concering the conversion.

Q. Will additional funds be made available to cover vacation already accumulated or earned during the year?

A. There are currently no plans to provide central funding for potental vacation liability.