blog posts System Government Costing Monthly Facts and Reminders Jul 19, 2023 10:15 amBuying and ContractsAccounting and BudgetingFY 24Do you know which personnel should be paid on your 3E fund and included in your rate calculation?Only employees who are paid from the 3E fund and directly benefit from the service can be included in the internal rates. State-paid employees that directly benefit from the service can be included in the external rates. However, deciding which employees should be paid from the 3E fund versus state funds can be confusing sometimes.Employees who are involved in the day-to-day operations of the fund providing the services should be paid from the 3E fund. Supervisors and administrative staff can be harder to determine whether they should be paid from the 3E or state funds. Expenditures such as administrative staff salaries (e.g., department business office) are typically indirect expenditures included on state funds and recovered in the Facilities and Administrative (F&A) rate calculation. These indirect expenditures may not be recovered as a component of the service activity rate. Typically, their time cannot be tracked to a specific line of service, and the amount of time they actually spend performing the service may be minimal. In this case, their salary would be more appropriate to be paid from state funds.Supervisors directly involved in providing the service may be paid from the 3E fund, such as a lab manager. For supervisors paid from state funds, a portion, or all, of their time may be appropriate to include in rates for external customers. Salaries included in state funds will be recovered as part of the F&A rate. ContactIf you have questions about Facilities & Administrative rates and how they are calculated, feel free to consult System Government Costing’s “Who to Ask” list to find an expert who can help.