1. Brustein & Manasevit, PLLC Tiffany R. Winters, Esq. twinters@bruman.com @Trwinters Time and Effort Documentation Best Practices 1 Mike F. Bender, Esq. mbender@bruman.com @MBender1230 Brustein & Manasevit, PLLC Fall Forum 2013

2. Brustein & Manasevit, PLLC Audit Findings and Amounts 2006 – Columbus – $2.3 million 2008 – Detroit – $49 million 2010 – Philadelphia – $123 million 2

3. Brustein & Manasevit, PLLC Time and Effort Documentation 101 3

4. Brustein & Manasevit, PLLC OMB Circulars Time and Effort Rule 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. 4

5. Brustein & Manasevit, PLLC Who must participate? All employees paid with federal funds!! Some employees paid with non-federal funds When salaries are used for match purposes NOT contractors 5

6. Brustein & Manasevit, PLLC Does Celine Dion have to keep time and effort records? 6 Is she an employee? Yes Is she paid with federal funds? Yes T&E Required No Is her salary used for match? No No T&E Required Yes T&E Required No No T&E Required I don’t know Ask HR

7. Brustein & Manasevit, PLLC 7 The Current OMB Rules A-87: State and Local Educational Agencies A-21: Institutions of Higher Education A-122: Nonprofit Organizations 48 C.F.R. Part 31: For Profit Agencies 7

8. Brustein & Manasevit, PLLC A-87: If employee works 100% on single cost objective Semi-Annual Certification Completed at least every ___________ After-the-fact record (dated) Signed by ___________ Accounts for the total activity for which employee compensated Must coincide with one or more pay periods The Administrator’s Handbook on EDGAR, page 233. 8

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10. A-87: If employee works on multiple cost objectives Personnel Activity Reports (PARs) After-the-fact record Accounts for the total activity for which employee compensated Completed at least ___________ Signed by ___________ Must coincide with one or more pay periods The Administrator’s Handbook on EDGAR, page 233. 10

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12. OMB Circular A-21: Institutions of Higher Education 3 Options:  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 12

13. Brustein & Manasevit, PLLC OMB Circular A-21: IHEs (cont.)  After-the-Fact Activity Reports: Professional/Professorial staff keep records every _______ All other employees keep _______ 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 The Administrator’s Handbook on EDGAR, pages 192 - 194 13

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15. OMB Circular A-122: Nonprofit Institutions Need PARs to support salaries and wages of ALL staff paid (in whole or in part) with federal funds Similar to A-87 (but not identical) After-the-fact record and dated Accounts for the total activity for which employee compensated Completed at least _________ Signed by _______________________ The Administrator’s Handbook on EDGAR, page 270 15

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18. For-Profits?????? 48 C.F.R. Part 31 Silent on required documentation… So what does that mean??? 18

19. Brustein & Manasevit, PLLC Time and Effort Guidance by OCFO!!! http://www2.ed.gov/policy/f und/guid/gposbul/time-and- effort-reporting.html 19

20. Brustein & Manasevit, PLLC OCFO Guidance (cont.) 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. The Administrator’s Handbook on EDGAR, page 322 20

21. Brustein & Manasevit, PLLC Substitute Systems 21

22. Brustein & Manasevit, PLLC Substitute Systems Generally Substitute systems may be used in place of these reports if approved by the cognizant agency. These systems are subject to approval if required by the cognizant or oversight agency. May include random moment sampling, “rolling” time studies, case counts, or other quantifiable measures of employee effort. The Administrator’s Handbook on EDGAR, page 319 22

23. Brustein & Manasevit, PLLC Substitute System May an employee working on multiple cost objectives at the same time document time and effort under a substitute system? A. Yes B. No C. It Depends. 23

24. Brustein & Manasevit, PLLC AUDIENCE Q & A 24

25. Brustein & Manasevit, PLLC Time and Effort – Advanced Topics 25

26. Brustein & Manasevit, PLLC Questionable Questioned Costs Going above and beyond can backfire. Example 1 Recorded time in six minute intervals Up to 1000 different program codes. Too many user errors. Example 2 “At least semi-annually” Using monthly PARs for employees that worked on single cost objectives. 26

27. Brustein & Manasevit, PLLC Federal Stipends If a State-funded employee is paid a stipend with federal funds for attending professional development, does time and effort documentation have to be kept? A. Yes B. No 27

28. Brustein & Manasevit, PLLC Federal Stipends Federal funds can generally be used to pay for stipends for professional development or other extra-curricular activities. Time and Effort documentation must be kept. Maryland January 2013 ARRA Audit - Documentation not kept for employees partially funded with federal funds. 28

29. Brustein & Manasevit, PLLC De Minimus Benefit If a teacher works on a single cost objective but also has limited other responsibilities, such as cafeteria or bus duties. This teacher must keep: A. Monthly PARs B. Semi-annual certifications 29

30. Brustein & Manasevit, PLLC De Minimus Benefit Limited work on another cost objective does not need to be captured in time and effort records. Employees may work 5% or less on another cost objective. The worked performed on these limited duties cannot deprive a benefit from the intended beneficiaries. The Montana Compact on Time Distribution, at p. 8, Q11. 30

31. Brustein & Manasevit, PLLC Substitute Teachers Are substitute teachers paid with federal funds required to track their time? A. Yes B. No 31

32. Brustein & Manasevit, PLLC Part-Time Employees Are part-time employees required to track their time? A. Yes B. No 32

33. Brustein & Manasevit, PLLC Blanket Certification Multiple employees working on the same single cost objective can be identified on a single semi-annual certification. A. True B. False 33

34. Brustein & Manasevit, PLLC Blanket Certification Provides flexibility. Identifies multiple employees working on the same single cost objective. Must be prepared at least semi-annually. Signed and dated by supervisor with firsthand knowledge of the employees’ work. The Montana Compact on Time Distribution, at p. 3. 34

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36. Contractors v. Employees The district has a Title I, Part A funded contract with a vendor for afterschool tutoring of Title I students. Do the contractor’s employees need to keep time and effort records? A. Yes B. No 36

37. Brustein & Manasevit, PLLC Characteristics of a Contractor Provides goods or services within normal business operations. Provides similar goods or services to others. Operates in a competitive environment. Provides goods or services that support the Federal program. Subject to terms of a contract but not compliance requirements of program. OMB Circular A-133(B) §__.210(c) 37

38. Brustein & Manasevit, PLLC Time and Effort Flexibility An employee teaches a special education classroom during school hours and provides additional instruction at the school’s afterschool program. The regular school position is paid for with IDEA funds while Title I, Part A funds pay for the after-school position. The employee must keep a PAR. A. True B. False The Administrator’s Handbook on EDGAR, page 323, Example 5 38

39. Brustein & Manasevit, PLLC Time and Effort Flexibility An employee works on IDEA, Part B and local-funded cost objectives during school hours and provides additional instruction at an after-school program. Title I, Part A funds pay for the after-school position. The employee may: A. Keep a PAR for all activities B. Keep a PAR and a semi-annual certification C. Either A or B D. None of the above 39

40. Brustein & Manasevit, PLLC Bonus Question 40 A school receives funding through the USDA National School Lunch Program and direct charges its janitorial staff. If the janitorial staff cleans the entire school, what type of documentation should it keep? A. PAR B. Semi-annual Certification

41. Brustein & Manasevit, PLLC Examples - Right or Wrong? 41

42. Brustein & Manasevit, PLLC PAR Example I certify that for the month of August 2013 I, Michelle Obama, spent my time working on the following programs: Title I, Admin20% State programs30%____ Total50% Signed: ___/s/____ September 10, 2013 42

43. Brustein & Manasevit, PLLC Semi-Annual Certification Example I, Britney Spears, certify that I worked 100% of my time on IDEA, Part B from February 1, 2012 to July 31, 2013. Signature of Employee ____/s/______________ Date: August 1, 2013 43

44. Brustein & Manasevit, PLLC Semi-Annual Certification Example I, Taylor Swift, certify that I worked 100% of my time on Title I, Part A Administration from January 1, 2012 to June 30, 2013. Signature of Employee ____/s/______________ Date: June 20, 2013 44

45. Brustein & Manasevit, PLLC PAR Example I certify that for the month of October 2013 I, Justin Beiber, spent my time working on the following programs: 21 st CCLC, Admin20% State programs30% Annual Leave50% Total100% Signed: ___/s/____ November 10, 2013 45

46. Brustein & Manasevit, PLLC Blanket Certification Example This is to certify that the following individuals have worked 100% of their time on the following cost objectives for the months of March 1 to August 31. Signed: ___/s/____ September 10, 2013 46 PositionNameCost Objective TeacherDavid CopperfieldTitle I, Part A - Programmatic TeacherChris AngelIDEA, Part B – Programmatic Guidance CounselorPenn JilletteTitle III, Equitable Services TutorRay Teller21 st CCLC - Programmatic

47. Brustein & Manasevit, PLLC PAR Example I certify that for the month of October 2013 I, Barack Obama, spent my time working on the following programs: 21 st CCLC, Admin85% State programs15%____ Total100% Signed: ___/s/____ November 15, 2013 47

48. Brustein & Manasevit, PLLC Semi-Annual Certification I certify that for the month of October 2013 I, Orlando Bloom, spent 60% of my time working on Title I, Admin. I certify 100% that the above information is accurate. Signed: ___/s/____ November 5, 2013 48

49. Brustein & Manasevit, PLLC Questions?? 49

50. Brustein & Manasevit, PLLC Disclaimer This presentation is intended solely to provide general information and does not constitute legal advice. Attendance at the presentation or later review of these printed materials 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. 50