The document, published by the Council on Governmental Relations in October 2009, analyzes the implications of implementing furlough programs at academic and research institutions, particularly in the context of financial compliance with Federal research funding requirements. Amid economic recession, institutions have considered furloughs—defined as temporary, unpaid leave for budgetary relief—as a cost-saving measure. The analysis distinguishes between scenarios where furloughs apply only to state-funded employees and those where all employees, regardless of funding source, are included. Key compliance issues addressed include the rate of pay, management of split-funded employees, fulfillment of effort commitments, adjustments in funding sources, and the treatment of varied employee groups such as graduate students, faculty, and critical operations staff. The document also examines related effects on fringe benefits, cost-shared effort, facilities and administrative reimbursements, and institutional operations.
Although the document acknowledges the absence of formal federal guidance on the subject, it stresses adherence to existing cost principles outlined in OMB Circular A-21, particularly the requirement that compensation practices be consistently applied and not disadvantage federal funding agencies. The analysis provides both theoretical and practical considerations for managing payroll distribution, effort reporting, and compliance risks, suggesting that institutions minimize risk by maintaining clear documentation, aligning payroll with effort, and ensuring internal oversight. In conclusion, while formal federal approval of furlough plans is not required, institutions are advised to make decisions informed by federal guidance, consistent application of policies, and careful risk assessment to ensure ongoing compliance with federal research funding requirements.
