Is it normal for faculty/staff attendance to generate on "No School" days?

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Yes — it is standard functionality that faculty/staff attendance generates on "No School" days. No school days are designed to be used for days when faculty and staff come to school, but students do not (e.g., staff development days). 

Faculty/staff attendance will only not generate on "Holiday" days. An example of when you should use the Holiday event type is when school is closed completely (e.g., during the winter break).