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During Fall 2016 the NC General Assembly and UNC General Administration approved bonuses for EHRA and SHRA faculty/staff. There were two types of bonuses awarded. One bonus was an across-the-board bonus to all EHRA and SHRA faculty/staff. The second bonus was discretionary and was to be awarded based on merit determined by the employee’s management.

In reviewing the Uniform Guidance and after discussing with counsel and UNC General Administration, we have determined that the treatment of the one-time merit bonus was inconsistent with federal regulations. The across-the-board bonus was applied consistently to all EHRA and SHRA faculty/staff and could be considered part of the employee’s base salary for the year, and thus would be allowable. The merit bonus was allocated in an inconsistent “subjective” manner and would be considered unallowable and cannot be expensed to federal/governmental awards.

In response to this decision we request that each impacted department move the portion of the merit bonus expensed to federal prime, federal flow-through, and all State of North Carolina awards to non-sponsored, non-state funds.

The merit bonus was paid under the Earnings Code ‘MBN’ on the following pay periods: B07 (10/02/2016), M04 (10/31/2016) and M05 (11/30/2016). An Excel spreadsheet of the identified expenditures, by employee, that will need to be moved to non-sponsored, non-state funds is attached for your reference.

For each employee, please complete the appropriate PAAT adjustments moving the identified expenditures to non-sponsored funds by Monday, June 19, 2017, unless otherwise directed by OSR staff.

We are aware that completing these adjustments represents a significant investment of time. Therefore we want to try to make this task as easy and efficient as possible. Thank you for your patience and cooperation as we work to ensure compliance with our sponsored projects.

If you have any questions please contact the ecrt help desk at and your question will be directed to the appropriate OSR personnel.

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