1. Pay Raise Explanation

2. Pay Raise Exclusion of Programs Any program zeroed in the budget e.g. HIP Program for which funding for salaries is provided elsewhere Welfare Assistance – only for welfare payments Salaries are paid from Social Services TPA pgm

3. Pay Raise Programs where pay is applied via other means are excluded Contract Support: Indirect: Pay raise is applied to reported salaries for admin (overhead) functions and is included when Indirect Cost Rate is negotiated. Direct: Direct salaries should be paid from the program not from contract support. The program gets the pay increase though the normal means.

4. Pay Raise Non-base programs Road Maintenance, HIP (if it weren’t zeroed) These programs DO receive pay raise for both Federal and 638 salaries. However, the pay raise is NOT distributed to the regions as part of the TPA base, because these are NOT base programs. The pay is distributed to the program, which makes the tribal distributions as prescribed

5. Adjustment for Number of Paid Workdays Two separate adjustments to salary line Pay Raise – calculated on previous year’s total salaries; incremental increase to salaries (e.g. 2.4% of $300M = $7.2M; new amt $307.2M) Adjustment for Number of Paid Workdays Reduction to TOTAL salary costs (e.g. -$1.15M; $307.2M - $1.15M = $306.05M total salaries) NOT a reduction to pay raise increment Pay Raise & Adjustment for Paid Days are just 2 components of our fixed cost adjustments

6. Number of Paid Work days: Change FY 2005261 FY 2006260-1 FY 2007260 0 FY 2008262 +2 Adjustment for Number of Paid Workdays

7. Why is this necessary? Salary: $100,000 Hourly Rate 100,000/2087 = $47.91 2,087 hours = ~261 paid workdays Assume 2% pay raise; +$2,000 100,000 + 2,000 = 102,000/2087 = $48.87/hr Adjustment for Number of Paid Workdays

8. FY 2005 – 261 paid work days FY 2006 – 260 paid work days 260 pd wk days x 8 hours of pay = 2080 hours 2080 hours x $48.87 = $101,649.60. So in FY 2006, we had less total salary cost than in FY 2005. We didn’t need to budget as much. Thus – there was a reduction for “one less day” Adjustment for Number of Paid Workdays

9. FY 2007 – 260 work days (like FY 2006) FY 2008 – 262 work days (2 additional days) Assuming same hourly rate: 262 pd wk days x 8 hours = 2096 hours 48.87 x 2096 hours = $102,431 So in FY 2008, we had to pay out more in total salary cost So we needed to budget for the additional cost Thus – there was an increase for “2 additional days” Adjustment for Number of Paid Workdays

10. None of this affects the pay raise calculation The day adjustment is against total salary The adjustment is made AFTER the pay raise is added in The amount is automatically adjusted as just a component of total pay Adjustment for Number of Paid Workdays

11. 17% issue Dave took the one less day and divided it into the pay raise & got 17% -- mistakenly One less day would equate to.0038314 (1/261) or (260/261) -1..0038314 x $307,200,000 (for example) = -1.15M Two additional pay days would be:.0076628 x 307,200,000 = $2.35M Adjustment for Number of Paid Workdays

12. Example – Simplified to help you understand purpose of paid workday adjustment Calculation done in detail by the department Department then provides the number for us to use in the budget Adjustment for Number of Paid Workdays