Beginning with the fall semester of 1990, the University will charge graduate fee remissions (not fee scholarships) to sponsored programs, both federal and nonfederal. This is being done because changes in the tax law now allow the awarding of fee remissions to graduate students engaged in teaching or research activities without any tax obligation on the fee remission. This tax benefit does not include other graduate students employed on sponsored projects and, therefore, their fees should not be charged to the project. In order to be eligible for the fee remission the graduate student engaged in teaching or research activities must be a full-time student employed at least 37.5% FTE.
Because of the timing problem in obtaining accurate information on graduate students the billing of fee remissions to grants and contracts will be the responsibility of individual schools. The total fees (less the unremittable fee to be paid by the student) will be charged to the school. The school will be responsible for billing individual grants and contracts for the special fee which will be the in-state rate (less the unremittable fee) times the number of credit hours.
The fee remission should be charged to the grant or contract where the graduate student's salary is charged. If the salary is moved from one account to another during the semester the fee remission should follow the salary. If the salary is distributed between two or more accounts the fee remission should be distributed in that same proportion.
Since grants and contracts begin and end at odd times during the semester, schools are urged to break the charge into five equal installments and match each with a salary payment as the semester progresses. No advance billing to a grant at the beginning of the semester, with the assumption that the salary will remain status quo for the entire period, will be allowed. The grant could end or the person's responsibilities could change during the semester.
The charge to the grant or contract should be accomplished with a journal voucher. The journal voucher should identify the time period and the person for which the charge is made. The time period could merely show second payment or third payment which will allow the payment to be matched with a salary payment. The expense class to be used will be 5400.
As announced in Important Notice 90-4, fee remissions have been added to proposals effective June 8, 1990. For most new applications this should pose no budgetary problem unless the agency specifically declines to fund fee remissions. However, for continuation-year applications where funding levels have been previously committed, some problems may arise. In these instances, individual schools are strongly encouraged to cover the cost of fee remissions. To do otherwise might serve as a disincentive to researchers and negate the potential benefits the Fee Remission Policy promises to provide.