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December 2004 - January 2005

Delphi Coordinators Teresa Rivas (left) and Nancy Wade.

Questions and suggestions from the staff to management may be submitted in confidence to the Delphi Coordinators (Teresa Rivas, left, and Nancy Wade). They should be submitted in written form, preferably via interoffice mail in a sealed envelope marked confidential. They must be signed. Detailed procedures for submitting questions are given in the UCAR Policies and Procedures Manual, section 4-1-2, and on the Delphi Web site. Staff Notes Monthly publishes questions and answers of general interest to staff, and the Delphi Web site has a log of all questions submitted since 1995.

Delphi Question #526 (received September 30): I am involved in a large, international, multidivisional project at UCAR. The project involves long international flights. Employees of certain divisions always make the long flights in business class, while those from another division always go economy class, ostensibly to save money (even though the project has budgeted for business class fares). However, the employees being inconvenienced do not benefit from this saving of money. Why doesn’t UCAR have a consistent, nondiscriminatory policy regarding class of service?

Similarly, on this project, UCAR employees of a certain rank (say, division director and higher), stay in fancier (and more expensive) hotels than lower-level employees. The less fancy hotels are perfectly adequate. Again, why doesn’t UCAR treat all its employees in a consistent manner?

Response (received November 30): UCAR’s travel policy can be found at www.fin.ucar.edu/hr/polpro/manual/sec3/sec316.html. The procedures that support this policy are found at www.fin.ucar.edu/procedures/sec3/proc316.html. To answer the specific questions asked, the questioner is directed to the following sections:

• Review and Approval Process, No. 5, Field Project Travel. “All UCAR-supported participants in a field project receive the same per diem rate per location and air tickets in the same fare class. Decisions about fare class and per diem rate are made jointly by Division and Program Directors who have staff participating in the field project. These decisions must be made prior to authorization of travel, and all field projects that involve uniform per diem rates and standard fare classes must be registered.”

• Review and Approval Process, No. 10, Field Project Travel. “Participants in registered field projects are reimbursed according to the business travel provisions included in this policy. For field projects, UCAR provides the same per diem rate (land-based and shipboard) per location and air tickets in the same fare class for all UCAR-supported participants in that project. Decisions about fare class and per diem rate are made jointly by Division and Program Directors who have staff participating in the field project. See UCAR policy 3-1-6, Travel Authorization, for information about registering field projects.”

• Transportation Expenses, No. 12A, Lodging. “Domestic and international travelers are reimbursed for the actual reasonable costs of lodging. Single-room accommodations are appropriate and should be requested by employees when traveling on UCAR business. Travelers should seek government-discount or lower rates for lodging accommodations whenever such rates are available.”

Therefore, if staff traveled with upgraded tickets, they should have made the upgrades with their own frequent flyer miles. On lodging, UCAR policy states reimbursement is for “actual” lodging, so that is more subjective. If the above policies were not followed and the variances were paid for with program or deployment funds, the Travel Office needs to be informed so that the situation can be evaluated. However, I understand that it is not always comfortable for individuals to report what they may perceive as an ethics issue.

It you would like to report an ethics issue, you may do so anonymously online (go to www.fin.ucar.edu/ethics/internal/ethicsmail.php3). UCAR provides this Web site for its employees to anonymously register concerns to management about the ethical conduct of an employee. These concerns are forwarded anonymously and automatically to Katy Schmoll, who will contact the appropriate people to evaluate the matter.

—Shelley Richards-Craig, general accounting manager Finance & Administration

Delphi Question #527 (received September 30): I would appreciate a detailed explanation of the “overhead tax” imposed on computer equipment purchases at UCAR. I understand that there is a 50% tax on computer purchases less than $5,000. Where does that money go? I heard a rumor that it was being used to purchase home systems for F&A employees.

Because of the tax, purchasers typically load up computers with unnecessary extras (big screens, speakers, etc.) so that the cost exceeds $5,000. This is getting hard to do now that computers are relatively cheap. When totaled up UCAR-wide, this seems to be a huge waste of money. In addition, when the computer is order is padded up like this, F&A doesn’t get their tax anyway. I’ve seen cases where the hardware price dropped and the order had to be bulked up again. Wouldn’t it make more sense to have a flat tax rate (how about 10%?) and have UCAR only buy the hardware that it needs?

Response (received October 20): In order to respond to this question, an explanation of why UCAR applies indirect cost (or overhead) rates to all sponsored agreements is needed. UCAR is primarily funded by the federal government and, therefore, is required to comply with various Office of Management and Budget (OMB) circulars, one of which is OMB Circular A-122, “Cost Principles for Educational Institutions; State, Local, and Indian Tribal Governments; and Non-Profit Organizations.” OMB Circular A-122 requires that UCAR administer an indirect cost rate (overhead) for costs that cannot be directly identified with a specific program including direction on how rates should be calculated (OMB Circular A-122).

Many activities are funded by these indirect, or overhead, funds, including:

1. Employee Benefits—medical, FICA, TIAA/CREF, non-worked time including vacation, sick leave, and holiday

2. Communications—telecommunications, networking/network security

3. Facilities—maintenance, custodial, building debt service

4. UCAR General & Administration (G&A)—UCAR Presidents Office, F&A, Corporate Affairs, library

5. NCAR Indirect—NCAR Director’s Office, division administrative budgets, bid and proposal

6. UOP/EO Indirect—UOP Director’s Office, EO Director’s Office, program administrative budgets, bid and proposal

UCAR spends several months each year collecting data from across the organization in preparation for developing indirect budgets and rates. These rates are reviewed at several administrative and management levels and, finally, by the UCAR President’s Council, prior to submission to the National Science Foundation for review and approval. The methodology for developing indirect cost rates is detailed in the document titled “Management Guidelines for the Development of the Indirect Cost Rate Proposal”.

As in many of the divisions and programs, some UCAR F&A employees work from both office and home. When computers purchased by F&A for office use are upgraded or replaced, F&A employees may seek authorization to take an old computer home to be used for business purposes. These employees usually need a home system for when they cannot get into the office, or to work nights and weekends. In many cases, however, the old systems are so slow and inefficient by the time they are available for home use that employees select to purchase their own computers, at their own expense, without benefit of UCAR discounts.

We are aware some divisions and programs “load up” computers with unnecessary extras so that the cost exceeds $5,000 and they avoid paying overhead. We have even seen groups pay more in extras added to avoid overhead than the overhead would have cost. The irony is that, as noted above, the costs covered by the overhead revenue are real costs necessary for UCAR/NCAR/UOP to function, and groups avoiding overhead still depend on these services and resources to support their research. These services and resources include electricity to run computers and keep the lights on, payroll to ensure that employees get paid, and purchasing and accounts payable so that divisions and programs can purchase and pay for the equipment and materials to perform research. These are all functions critical to the success of the NCAR and UOP mission.

Of course, not all divisions and programs choose to “load” their purchases to avoid overhead. The groups that do might spend less for overhead than for the cost of the extras. We have seen divisions and programs add $3,000 to a $2,500 purchase to avoid overhead. In the long run, after multiple purchases, they may be losing rather than saving program funds through this approach. Ultimately, this is a decision that must be made in the division or program.

Another matter to consider is that when divisions and programs “load” extras to avoid overhead, the resulting item becomes classified as a fixed asset because it exceeds the $5,000 threshold. It then requires years of reporting and tracking, thereby increasing staff workloads. The UCAR Property Office estimates we track and report on more than 300 assets that were loaded to force them over $5,000 to avoid paying overhead.

Although we need a methodology to fund indirect costs, the method required by OMB A-122 would not be UCAR’s first choice. UCAR has approached OMB over the years to propose other, more effective methods (from UCAR’s point of view); however, OMB has not been receptive. Until OMB is willing to consider a different method for indirect cost recovery, UCAR is required to comply with OMB A-122 as it currently exists. As we all know, federal funding comes with strings, one of which is compliance with the applicable circulars and federal regulations.

—Melissa Miller, director UCAR Budget and Finance

Delphi Question #528 (received October 26): Recently, a co-worker of mine was eating in an out-of-town restaurant when someone made off with her purse. In addition to the usual hassles of dealing with lost credit cards, driver’s license, etc., my coworker began worrying that the thief might see her CIGNA health insurance card—which contained her Social Security number. Unfortunately, once someone knows your Social Security number, they can use it to commit fraud and other crimes. For that reason, most credit card companies and the Colorado Motor Vehicle Division do not put Social Security numbers on credit cards or driver’s licenses. In addition, many health insurance companies, including Kaiser, have stopped putting Social Security numbers on identification cards.

I’m wondering if CIGNA would consider issuing cards to UCAR staffers with new identification numbers that won’t be based on our Social Security Numbers. If not, what do CIGNA and UCAR recommend to ­prevent us from becoming victims of identify theft?

Response (received November 11): Your question could not have been timed more perfectly. We just learned that CIGNA is introducing a new member identification program for all participants in 2005. Instead of using your Social Security number on the CIGNA Membership Identification card, CIGNA will assign you an Alternate Member Identifier (AMI) that will appear on your ID card. All CIGNA participants, whether or not they have changed plans in 2005, will receive a new membership identification card with a newly assigned AMI. Please look for the new card(s) to arrive at your home address about the first week of January.

Please note that a member’s Social Security number is still required at the time of initial enrollment into the health insurance plans. Thereafter, members can use the new AMI at the time of service by presenting the CIGNA membership card. If a participant forgets to take their ID card anywhere, their claim can still be cross-referenced with the Social Security number.

—Laurie Carr, benefits manager

Human Resources

Also in this issue...

The 2004 Outstanding Accomplishment Awards

Prospecting for ice

Recollections from a pioneering woman scientist

IMAGe comes into focus

Native American visitors

Turning off the juice

Happy Holidays!

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