The Daily O’Collegian

OSU likely could save more than $10,000 a month by issuing cell phones to employees instead of paying them higher salaries to cover phone bills for their university and personal calls, The Daily O’Collegian found.

Internal Revenue Service rules prohibit employees from making personal calls on university-owned phones. Rather than making employees carry a second phone for personal calls, the university has given pay raises to more than 500 employees to cover the costs of phones they own but on which they also make university-related calls.

Those employees have jobs that require them to be on call at all times, an Oklahoma State University official said.

“People don’t want to carry more than one phone,” said Michael White, OSU telecommunications director.

White said the system is also more convenient for the university because OSU does not have to seek bids for the phones and calling plans, to repair broken equipment or to upgrade outdated technology.

But officials also can’t guarantee the employees are getting a better price than what OSU could by seeking bids.

The Daily O’Collegian’s analysis of university payroll records revealed the pay raises — more than a combined $420,000 annually — cost the university more money per phone.

OSU pays an average of nearly $71 monthly in extra salary — which OSU officials call a “salary additive” — for those employees to pay their cell phone bills, about $20 more per month than it spends on average for university phones issued to employees.

Payroll records indicate 493 employees received an additive in January, but White said other employees, whose phone records are not on file at that office, also receive additives.

White said stacking the price of university-owned phones against employee-owned phones is an apples-to-oranges comparison. University-owned phones are often shared among several people in one office, he said.

“And they are not the latest technology,” he said.

White said the Cellular Services Policy, most recently updated in May 2004, was designed to allow employees to make personal and business calls from the same device.

The university has two methods of paying for the cell phones of employees whose jobs require them to be accessible at all times, he said. The department or organization may issue a university-owned phone to its employees or it may add to employees’ salaries to cover the expenses of their phones.

The university has issued 380 phones to faculty and staff on the Stillwater and Tulsa campuses, White said.

The university spends on average $48.79 a month per phone but this figure varies widely, White said.

Telecommunications is considering seeking new bids later this year, he said.

In a perfect world, all employees would use university-issued phones because their records are open to the public and they require a bidding process, White said. But they are not convenient, he added.

University-issued cell phones are “for the sole purpose of university-related business and personal use of such device is prohibited,” according to the policy. White said the no personal-use provision was added because the Internal Revenue Service would otherwise consider the university phones a “taxable benefit.”

To avoid this, OSU forbids employees from making personal calls on university-provided phones. But, White said, that means employees with university-provided phones must carry a second phone if they want to make personal calls.

That is why the university created the employee-owned option. With this option, an employee receives a predetermined amount of money each month to compensate for “business use” of a personal phone, White said.

The salary adjustments are based on average monthly expenses and the amount does not change based on actual costs, White said. Employees might spend more than the predetermined amount some months, but White said they do not receive extra money.

“If you went over, sorry,” he said. “If you went under, OK, you got lucky this month.”

White said OSU has been able to stay ahead of the curve on employee cell phones but he expects other campuses to craft policies similar to OSU’s.

Payroll used to keep track of all the cell phones salary additives, White said, but that was tedious. In March, employees receiving raises and new hires began negotiating their cell phone compensation packages with their supervisors. Records of the negotiations are available only at the departmental level, he said.

Consequently, OSU Communications Director Gary Shutt said, university payroll does not know how many people have salary additives or how much salaries have been raised.

“It is a decision made in each department and organization,” Shutt said.

Some raises require approval from the OSU/Oklahoma A&M Board of Regents. Records of those raises are available from the regents’ office.

Since December, the regents have approved raises totaling more than $10,000 for cell phones for 11 employees, including Shutt, whose annual $2,040 raise was nearly twice as large as anyone else’s, records show. The average raise is less than $1,000 a year, or $79 a month.

Shutt said the president’s office determined the amount of his raise. It pays for an unlimited data package as well as voice capabilities on a BlackBerry phone.

Shutt used to carry two devices: one for voice and one for e-mail. After the salary adjustment, he carries only one and saves about $10 per month with the new device.