It is the policy of Illinois State University, the “University”, that the Fringe Benefit Rate is established in accordance with the Federal Office of Management and Budget Uniform Guidance (OMB Uniform Guidance). The rate is negotiated between the University and the Department of Health and Human Services (DHHS), the Division of Cost Allocation Services (CAS), which is the cognizant Federal agency overseeing the administration of sponsored projects at the University. This rate must be applied to externally sponsored programs (funds not considered ‘exempt’ under 5 ILCS 375/11) salaries/wages when developing budgets or for charges of actual salary/wage costs..
The University has negotiated three employee fringe benefit rates. The three fringe benefits rates are grouped by employee classification.
The negotiated fringe rates are applied to the applicable employee salary/wages to represent the associated benefits for that classification of employee.
The University develops and submits the fringe benefit rates annually to DHHS-CAS, our federal cognizant audit agency, for approval. Prior year provisional fringe benefit rates remain in effect until DHHS-CAS approves the current fiscal year rates. Once approved, the final negotiated fringe benefit rates become effective on July 1 of the fiscal year noted by the rate agreement.
The Fringe Benefit Rate is calculated by the development of a pool of Fringe Benefit Costs (the numerator) and of a salary and wage base (denominator). The pool consists of costs for the benefits provided to employees. A Fringe Benefit Rate is developed by dividing the cost pool by the base; this rate represents the percentage that must be multiplied by employees’ salaries and wages expended for sponsored projects.
The University negotiates a fixed Fringe Benefit Rate with the DHHS, CAS. A fixed rate is based on an estimate of the costs for the period covered by the rate. When the actual costs for this period are determined, an adjustment will be made to the rate for the future year(s) to compensate for the difference between the costs used to establish the fixed rate and actual costs.
The fringe benefit costs included in the negotiated rate are:
The Fringe Benefits are charged using the rate negotiated with the cognizant agency. The rate is applied to the portion of salaries and wages allocable to the sponsored project.
Policy Owner: Research and Sponsored Programs
Contact: Research and Sponsored Programs (309-438-7018)
Revised on: 09/2022
