NEW FLEXIBILITIES FOR TIME AND EFFORT CERTIFICATIONS

Transcription

1 NEW FLEXIBILITIES FOR TIME AND EFFORT CERTIFICATIONS MIKE BENDER, ESQ. BRUSTEIN & MANASEVIT, PLLC FALL FORUM 2014 TIME AND EFFORT STANDARDS 2 THE BASICS NO CHANGE! If federal funds are used for salaries, then time distribution records are required. How staff demonstrate allocability If employee paid with federal funds, then must show that the employee worked on that specific federal program cost objective. 3 1

2 PARTICIPANTS NO CHANGE! All employees paid with federal funds!! Some employees paid with non-federal funds Part-Time Employees NOT contractors 4 CURRENT A-87 STANDARDS Semi-Annual Certifications If an employee works on a single cost objective: After the fact Account for the total activity Signed by employee or supervisor Every six months (at least twice a year) Personnel Activity Report (PAR) If an employee works on multiple cost objectives: After the fact Account for total activity Signed by employee Prepared at least monthly and coincide with one or more pay periods 5 6 2

3 7 CURRENT A-21 STANDARDS Plan Confirmation Budgeted allocations for professional/professorial staff Updated to reflect any significant changes in actual work Multiple Confirmation Records Variety of records kept in combination at least monthly. After-the-Fact Activity Reports Professional/Professorial staff keep records every six months All other employees keep monthly records Signed by employee, principal investigator, or responsible official using suitable means of verification. Must reflect activity applicable to each sponsored agreement and to each category needed to identify F&A costs 8 9 3

4 CURRENT A-122 STANDARDS Personnel Activity Reports After the fact Account for total activity Signed by employee or supervisor with first hand knowledge Prepared at least monthly and coincide with one or more pay periods 10 Brustein Brustein & Manasevit, Manasevit, PLLC PLLC 11 1 Less Proscriptive Rules Means Significant Flexibility in Adopting Own Processes 12 4

5 UNIFORM GRANT GUIDANCE STANDARDS Charges for salaries must be based on records that accurately reflect the work performed 1. Must be supported by a system of internal controls which provides reasonable assurance charges are accurate, allowable and properly allocated 2. Be incorporated into official records 3. Reasonable reflect total activity for which employee is compensated Percentages may be used for distribution of total activities Not to exceed 100% 13 UNIFORM GRANT GUIDANCE STANDARDS 4. Encompass all activities (federal and non-federal) 5. Comply with established accounting polices and practices 6. Support distribution among specific activities or cost objectives 14 COFAR COMMENTS ON NEW RULE By focusing more on internal controls, the rule mitigates the risk that a non-federal entity will focus on prescribed procedures... which alone may be ineffective in assuring full accountability. Uncovering weaknesses in internal controls or instances of fraud is goal. Not audit findings. 15 5

6 CHANGES TO COST OBJECTIVE UNIFORM GRANT GUIDANCE OBJECTIVES COST What is a cost objective? (slightly changed) Now applies to IHEs! Program, function, activity, award, organizational subdivision, contract, or work unit for which cost data are desired and for which provision is made to accumulate and measure the cost of processes, products, jobs, capital projects, etc. 17 UGG COST OBJECTIVES (CONT) Multiple Cost Objectives (vii): More than one Federal award. A Federal award and a non-federal award. An indirect cost activity and a direct cost activity. Two or more indirect activities that are allocated using different allocation bases. An unallowable activity and a direct or indirect cost activity. 18 6

7 2 Flexibility in Reporting An Employee s Time 19 NEED FOR CLARIFICATION Always been confusion re: Cost objectives Do you track funding source or track what employee is working on? For example, Project Director of 21 st CCLC after school program working 100% of her time on the 21 st CCLC program but is paid 75% with 21 st CCLC funds and 25% with State funds. 20 HELP! Time and Effort Guidance by OCFO!!! /guid/gposbul/time-and-effortreporting.html 21 7

8 OCFO GUIDANCE It is possible to work on a single cost objective even if an employee works on more than one Federal award or on a Federal award and a non-federal award. The key to determining whether it is a single cost objective is whether the employee s salary and wages can be supported in full from each of the Federal awards on which the employee is working or from the Federal award alone if the employee s salary is also paid with non-federal funds. 22 OCFO GUIDANCE EXAMPLE OF SINGLE COST OBJECTIVES: Title I, Part A funds and State compensatory education funds An LEA supports a supplemental math teacher to serve low-achieving students with 50 percent Title I, Part A funds and 50 percent State compensatory education funds. Because the LEA could support the teacher s entire salary with the Title I, Part A funding, it is a single cost objective. 23 OCFO GUIDANCE (CONT.) The guidance helps determine the number of cost objectives an employee is working on. Currently applies to state and local governments Under UGG, who will it apply to now? Could ED say it does not apply to the UGG requirements? 24 8

9 FOCUS ON IHES It is recognized that teaching, research, service, and administration are often inextricably intermingled in an academic setting. When recording salaries and wages charged to Federal awards for IHEs, a precise assessment of factors that contribute to costs is therefore not always feasible, nor is it expected The Combination of Circulars Creates Subtle Differences 26 SUBSTITUTE SYSTEMS States, local governments and Indian tribes encouraged to adopt substitute systems if approved by cognizant agency for indirect cost (i)(5) Still acceptable to allocate sampled employees supervisors, clerical and support staffs, based on the result of the sampled employees. 27 9

10 ALTERNATIVE PROPOSALS Cognizant agencies for indirect costs are encouraged to accept alternative proposals based on outcomes and milestones for program performance. These plans are acceptable as alternatives to the UGG s standards. 28 BLENDED FUNDING A non-federal entity may submit performance plans that incorporate funds from multiple Federal awards and account for their combined use based on performance-based metrics, if approved. Must submit a request for a waiver that includes certain information, including the method of charging costs. 29 USE OF BUDGET ESTIMATES Budget estimates alone do not qualify as support for charges to Federal awards (i)(1)(viii) May be used for interim accounting purposes if: Produces reasonable approximations Significant changes to the corresponding work activity are identified in a timely manner Internal controls in place to review after-the-fact interim charges based on budget estimates 30 10

11 DOCUMENTATION If records meet the standards, the non-federal entity will not be required to provide additional support or documentation for the work performed (i)(2) BUT, if records of grantee do not meet new standards, awarding agency may require PARs (i)(8) However, PARs are not defined!!! 31 SO WHAT DOES ALL THIS MEAN?? 32 WHAT S NEXT? Finalized Regulations/Effective Date Changes by ED? Change T&E policies? Auditor Input? 33 11

12 Disclaimer This presentation is intended solely to provide general information and does not constitute legal advice or a legal service. This presentation does not create a client-lawyer relationship with and, therefore, carries none of the protections under the D.C. Rules of Professional Conduct. Attendance at this presentation, a later review of any printed or electronic materials, or any follow-up questions or communications arising out of this presentation with any attorney at does not create an attorney-client relationship with. You should not take any action based upon any information in this presentation without first consulting legal counsel familiar with your particular circumstances