NEW FLEXIBILITIES FOR TIME AND EFFORT CERTIFICATIONS€¦ · 1 brustein & manasevit, pllc new flexibilities for time and effort certifications mike bender, esq. [email protected]

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Brustein & Manasevit, PLLC

NEW FLEXIBILITIES FOR TIME AND EFFORT CERTIFICATIONS

MIKE BENDER, [email protected]

BRUSTEIN & MANASEVIT, PLLC

FALL FORUM 2014

Brustein & Manasevit, PLLC2

TIME AND EFFORT STANDARDS


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.

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PARTICIPANTS – NO CHANGE!

• All employees paid with federal funds!!

• Some employees paid with non-federal funds

• Part-Time Employees• NOT contractors

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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

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Plan Confirmation

Budgeted allocations for professional/professorial staff

Updated to reflect any significant changes in actual work

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

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Variety of records kept in combination at least monthly.

Multiple Confirmation Records

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• 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

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Personnel Activity Reports

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Less Proscriptive Rules Means Significant

Flexibility in Adopting Own Processes1

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UNIFORM GRANT GUIDANCE STANDARDS

• Charges for salaries must be based on records that accurately reflect the work performed1. 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 records3. Reasonable reflect total activity for which

employee is compensated Percentages may be used for distribution of total

activities Not to exceed 100%

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UNIFORM GRANT GUIDANCE STANDARDS

4. Encompass all activities (federal and non-federal)5. Comply with established accounting polices and

practices6. Support distribution among specific activities or

cost objectives

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COFAR COMMENTS ON NEW RULE

By focusing more on internal controls, the rule“mitigates the risk that a non-Federal entity… willfocus on prescribed procedures... which alonemay be ineffective in assuring fullaccountability.”

• Uncovering weaknesses in internal controls orinstances of fraud is goal. Not audit findings.

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CHANGES TO “COST OBJECTIVE”


UNIFORM GRANT GUIDANCE COST OBJECTIVES

What is a cost objective? 200.28 (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.

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UGG COST OBJECTIVES (CONT)

Multiple Cost Objectives 200.430(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.

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Flexibility in Reporting An Employee’s Time 2

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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 21st CCLC after

school program working 100% of her time on the 21st CCLC program but is paid 75% with 21st

CCLC funds and 25% with State funds.

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HELP!

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Time and Effort Guidance by OCFO!!!

http://www2.ed.gov/policy/fund/guid/gposbul/time-and-effort-reporting.html

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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.

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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.

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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?

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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.”

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The Combination of Circulars Creates Subtle Differences 3

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SUBSTITUTE SYSTEMS

•States, local governments and Indian tribesencouraged to adopt “substitute systems” ifapproved by cognizant agency for indirectcost. 200.430(i)(5)

•Still acceptable to allocate sampledemployees’ supervisors, clerical and supportstaffs, based on the result of the sampledemployees.

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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.

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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.

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USE OF BUDGET ESTIMATES

Budget estimates alone do not qualify as support for charges to Federal awards 200.430(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

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DOCUMENTATION

If records meet the standards, the non-federal entity will not be required to provide additional support or documentation for the work performed. 200.430(i)(2) BUT, if records of grantee do not meet new

standards, awarding agency may require PARs. 200.430(i)(8) However, PARs are not defined!!!

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SO WHAT DOES ALL THIS MEAN??

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WHAT’S NEXT?

• Finalized Regulations/Effective Date

• Changes by ED?• Change T&E policies?• Auditor Input?

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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 Brustein & Manasevit, PLLC 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 Brustein & Manasevit, PLLC does not create an attorney-client relationship with Brustein & Manasevit, PLLC. You should not take any action based upon any information in this presentation without first consulting legal counsel familiar with your particular circumstances.

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NEW FLEXIBILITIES FOR TIME AND EFFORT CERTIFICATIONS€¦ · 1 brustein & manasevit, pllc new flexibilities for time and effort certifications mike bender, esq. [email protected]

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