1. 1 Time and Effort Reporting Lessons Learned: Problems and Potential Solutions Helga Greenfield Associate Vice President for College Relations and Director of Title III & Government Relations June 18, 2013

2. 2 Top Findings  OIG and other auditing agencies indicate that Time and Efforts represent the largest audit findings Examples of Top Findings o No certification of effort reports o Kept wrong document o Dated before time period ends o No after-the-fact confirmation from the appropriate person o Too vague in description “federal program” o Does not account for total compensation o Variances between effort report and billed salaries not resolved o Pre-populated forms o Completed how paid versus employee worked o No policy on effort reporting-continual late reports o Effort reports not maintained o Timesheets not signed o No certification of effort reports o Kept wrong document o Dated before time period ends o No after-the-fact confirmation from the appropriate person o Too vague in description “federal program” o Does not account for total compensation o Variances between effort report and billed salaries not resolved o Pre-populated forms o Completed how paid versus employee worked o No policy on effort reporting-continual late reports o Effort reports not maintained o Timesheets not signed

3. 3 Why?  If federal funds used for salaries, then time distribution records are required.  Must demonstrate – If employee paid with federal funds, then employee worked on that specific federal program/cost objective.  If federal funds used for salaries, then time distribution records are required.  Must demonstrate – If employee paid with federal funds, then employee worked on that specific federal program/cost objective.  Necessary  Reasonable  Allocable  Adequately Documented  Necessary  Reasonable  Allocable  Adequately Documented All Circulars have Federal Cost Principals

4. 4 Who Must Participate?  Not contractors Any Employee who is working on a federal program  All employees paid with federal funds  Some employees paid with non-federal funds

5. 5 OMB Circular A-21: Institutions of Higher Education  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 6 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  After-the-Fact Activity Reports:  Professional/Professorial staff keep records every 6 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 More flexible rules and more discretion for professorial and professional staff

6. 6 OMB Circular A-21: Institutions of Higher Education (cont.)  Any grant, contract or other agreement between the institution and the Federal Government.  Facilities – as depreciation and use allowance, interest on debt associated with certain building, equipment and capital improvements, operation and maintenance expenses and library expenses  Administration – general administration and general expenses, departmental administration, sponsored projects administration, student administration and services, and all other types of expenditures not listed specifically under one of the subcategories of Facilities.  Facilities – as depreciation and use allowance, interest on debt associated with certain building, equipment and capital improvements, operation and maintenance expenses and library expenses  Administration – general administration and general expenses, departmental administration, sponsored projects administration, student administration and services, and all other types of expenditures not listed specifically under one of the subcategories of Facilities. What is a sponsored agreement: Facilities and Administration (F&A) Costs:

7. 7 Awareness and Training  May use “budget estimates” for initial allocations  Supervisors need to be on board  May use “budget estimates” for initial allocations  Supervisors need to be on board 1.Plan initial funding allocations well How to set up time distribution system: 2.Develop written time distribution policies and procedures  “How to” instructions for employees  Reporting vacation, travel, long-term leave  Manual for fiscal side  Frequency of comparing estimates to actual costs, handling of deviations, monitoring of system  “How to” instructions for employees  Reporting vacation, travel, long-term leave  Manual for fiscal side  Frequency of comparing estimates to actual costs, handling of deviations, monitoring of system

8. 8 Awareness and Training  On mechanics of filling out form  On which federal program cost objective they are working  Training & Refresher training  New employee training  On mechanics of filling out form  On which federal program cost objective they are working  Training & Refresher training  New employee training 3.Train employees  Supervisors should be aware of deviations of effort from initial budget estimates  Be ready to redirect work of employee or adjust grant supporting salary  Supervisors should be aware of deviations of effort from initial budget estimates  Be ready to redirect work of employee or adjust grant supporting salary 4.Close supervision

9. 9 Reasons for Audits  Adequacy of internal controls to ensure salaries and wages are allowable, allocable and reasonable  Simply questioning the allowability of costs is not enough to assure appropriate accountability for federal dollars  Goal is to help institutions recognize weak internal controls and to strengthen them so that future funding will be better managed  Overall, the intention is to assess the adequacy of the College or University’s effort reporting  Adequacy of internal controls to ensure salaries and wages are allowable, allocable and reasonable  Simply questioning the allowability of costs is not enough to assure appropriate accountability for federal dollars  Goal is to help institutions recognize weak internal controls and to strengthen them so that future funding will be better managed  Overall, the intention is to assess the adequacy of the College or University’s effort reporting Audit Focus:

10. 10 THANK YOU