1. Payroll Distribution Confirmation Report Training June / July 2003

2. 2 Objectives Provide an overview of the key elements of the new Payroll Distribution Confirmation Reporting Policy Review Payroll Distribution Confirmation Reports Outline Roles, Responsibilities and Process

3. 3 Payroll Distribution Confirmation Policy Why a new policy and procedure? –Regulatory requirements –Respond to external and internal concerns and findings

4. 4 Overview Payroll confirmation replaces the Work Activity Confirmation reports (WAC’s) sent to Faculty Key Differences –A payroll confirmation is required for every individual with payroll charges to a sponsored award –Salary cost sharing is not specifically highlighted in the payroll distribution report –100% of each individual’s charges are listed, not just the charges to sponsored awards

5. 5 OMB Circular A-21 Section J8.b(2)a The payroll distribution system will … reasonably reflect the activity for which the employee is compensated by the institution… Section J.8.c.(1)(e) At least annually a statement will be signed by the employee, principal investigator, or responsible official(s) using suitable means of verification that the work was performed, stating that salaries and wages charged to sponsored agreements as direct charges…are reasonable in relation to work performed.

6. 6 Definition Payroll confirmation reporting is the formal verification of the reasonableness of payroll charges to sponsored awards In general each faculty / PI will receive 2 reports to sign –Faculty Report (detailing his / her own charges) –Award Manager Report (detailing the individuals charging to his / her awards)

7. 7 Faculty Report How did we identify those individuals who should receive their own ‘faculty’ report? –There is no indicator of “faculty” within Oracle –We relied on: “Award manager” designation in Oracle “Professorial salaries” expenditure types Input from Division Administrators If you think that someone should be receiving a faculty report and not appearing on the Award manager report let us know and we will add them to the list for the next go around

8. 8 Faculty Report Faculty with payroll charges to sponsored awards receive their own payroll distribution report Lists 100% of the faculty members payroll charges (in %) for the reporting period If a faculty charges to an award for which he is not the award manager, his charge will appear on his own Faculty Report and not on the Award Manager’s report

9. 9 Faculty Confirmation “ As principal investigator or cognizant signatory I confirm that I have suitable means of verification that work was performed and that the salaries and wages charged directly to the sponsored agreements indicated above are reasonable in relation to the work performed”

10. 10 Award Manager Report Format –Cover page lists all the employees that had payroll charges on the award manager’s awards confirmation statement –Detailed report Detail listing of employees’ payroll charges

11. 11 Award Manager Report 100% of each individual’s time (in %) is listed Award manager only confirms the charges made to his or her awards –Identified by an ‘X’ in the confirm column

12. 12 Award Manager Report If an individual has charges that affect multiple award managers then that individual will be listed on each award manager’s report Payroll charges for other PI’s are not included on the Award Manager Report (see Faculty Report)

13. 13 Award Manager Confirmation “ As award manager or cognizant signatory I confirm that I have suitable means of verification that work was performed and that the salaries and wages charged directly to the sponsored agreements indicated on the attached report are reasonable in relation to the work performed”

14. 14 Data Source What’s included in the payroll charge %? –All W-2 payroll charges are included in calculating 100% of the individual’s charges e.g. Basic salary Overtime Housing allowance –1099 / 1042(s) and 592(b) earnings elements are not included (see appendix)

15. 15 Data Source The information used to calculate the payroll % charge comes directly from the labor distribution module It includes all cost transfers processed prior to the run date of the report

16. 16 Data Explanation A minimum of 1% has been assigned to every sponsored award identified on the report Except as noted above, all percent figures have been rounded using normal rounding rules A rounding difference line is used when necessary to obtain a total of 100% for each individual

17. 17 Data Explanation The non-sponsored charges line item is the aggregate of all payroll charges for the specific employee to non-sponsor funded activity This would include payroll charges to general budget, endowment, etc

18. 18 Paid Leave Scenario: –An employee eligible for paid leave –Paid 100% by a sponsored award –Takes vacation / sick time during the 6 month reporting period The payroll distribution report will show charges against both the sponsored project AND non sponsored charges

19. 19 Contact Person Each Faculty and Award Manager Report is associated with a contact person The contact person is responsible for distributing reports to, and receiving from, faculty and or award managers Contact persons were provided by Division Administrators for the first reporting cycle The Award Set Up Form currently requests that a Payroll Confirmation Contact Person be designated

20. 20 Cognizant Signatory Responsibility for confirmation may be delegated to a cognizant signatory A cognizant signatory is any individual who: 1.Has suitable means of verification that work was performed, and 2.Has the knowledge to confirm that the payroll charges were reasonable in relation to the work performed

21. 21 Award vs. Project Manager On some larger projects there may be several ‘project managers’ involved in one award

22. 22 Award vs. Project Manager Departments are free to work out arrangements that best work for them –E.g. copying the Award Manager Report and highlighting the individuals that the project manager is signing for –Having the project manager co-sign with the award manager Cost Studies will keep track of the reports by award manager

23. 23 Procedures Review the information on the report and confirm that it represents a reasonable distribution of payroll charges for the work performed If there is a disagreement that the work was performed and / or that the distribution is reasonable Cost Studies should be notified immediately Cost Studies will work with the award manager / contact person to determine the appropriate course of action. A cost transfer request may need to be processed by the Division / center through Project Accounting. The Cost Transfer policy will apply to such requests

24. 24 Procedures Report Distribution –Every 6 months July and January, for 6 months ending March 31 and September 30, respectively Timing allows for cost transfers to be processed within 90 days –Reports distributed to Contact Person

25. 25 Procedures Report Collection –Reports should be returned to Cost Studies within 30 days of distribution. Reminders will be sent out as follows: After 30 days – to the Contact Person After 60 Days to the Division Administrator After 75 days to the Division Chair After 90 days to the Provost

26. 26 Validation of Report Data Comprehensive data testing is being performed by Cost Studies The percentage calculation expresses all payroll charges and cost transfers for each individual for each sponsored award as a % of their total payroll charges No adjustments have been made to the payroll data that is in the labor distribution module

27. 27 Special Cases Visiting professors / Emeritus professors –If Caltech is not making payroll charges they will not receive a Faculty Report. –May receive an Award Manager Report if they are responsible for awards made to Caltech

28. 28 Report Statistics 2,600 individuals charging to sponsored awards 231 Faculty Reports 240 Award Manager Reports 37 contact persons

29. 29 Roles & Responsibilities Principal Investigator Divisions / Centers Office of Financial Services (Cost Studies) Human Resources (Labor Distribution Unit)

30. 30 Contacts Tracey Fraser, Director Cost Studies & Property Services, ext 2540 tracey.fraser@caltech.edu Ted Lieu, Manager Cost Studies, ext 2579 ted.lieu@caltech.edu