Time and Effort Overview May 2016 Thanks so much for having me here today. SBCTC is still noticing T&E problems at most organizations. So we’re trying to do more refresher training as we’re able. Some organizations have had repeat findings and recommendations in audits. Since the federal funds for the programs we audit pass through SBCTC, we can’t ignore those. We’re hoping we can help you get things cleaned up on your end so that future grant funding isn’t impacted.

Guidelines available in: “How To” section of OGMS Background OGMS: http://apps.sbctc.edu/ onlinegrants/howto OBIS: http://apps.sbctc.edu/ obis Guidelines available in: “How To” section of OGMS Available without logging in Available in “Resources” section of OBIS Must log in to view I trust that you all have a copy of the T&E Guidelines? That document really does have the magic T&E answers as well as sample documents, so I want you all to be very familiar with where to find it. OGMS – How To OBIS – Resources Please get in the habit of looking for it in one of those places to make sure you have the latest version.

Background Guidelines Page 3 What is Time and Effort (T&E) Reporting? Federally mandated method of certifying that salaries/benefits charged to a federal grant are accurate and used to support such charges T&E is required by the Feds. Grantees are required to do it. SBCTC is required to monitor it. More information on page 3 of the Guidelines. Each organization must have a process for T&E. Shouldn’t be a unique process for each program or grant. May have some slight nuances by program/grant, but should still follow the same process for the organization. BUT, as most of you are “grant mangers” for your WorkFirst grants, you are ultimately responsible for ensuring all grant requirements are met. T&E is one of those requirements. So you all need to be aware of your organization’s T&E processes to ensure T&E is done and done correctly for the grants you oversee. If your organization’s process isn’t adequate, you need to work with your business or grants office to help make some improvements.

Background Guidelines Page 3-4 Who Must Complete T&E Reports? Any faculty/staff funded in whole or in part by a federal grant must complete T&E reports Faculty/staff funded by non- federal funds used as match must also complete T&E reports Now some basics: All faculty/staff funded in whole or in part by a federal grant must complete T&E reports. All faculty/staff funded in whole or in part by non-federal funds used as a match must also complete T&E reports. BEDA Grants: Does not include faculty or staff who may be funded by sources that make up your MOE. More info on pages 3-4 of the Guidelines on this. If you’re confused about match versus MOE, there’s clarification in grant fiscal guidelines on that.

Time and effort vs Payroll reports Guidelines Page 5 Payroll reports – How an employee is paid T&E reports – Actual time worked in each area T&E reports are certified T&E reports are used to adjust payroll when necessary Payroll reports and T&E reports are NOT the same thing. Payroll reports may NOT simply be signed off for T&E purposes. They don’t meet requirements. Payroll reports reflect how an employee is actually paid – what amounts from what funding sources. Example, an employee who is paid 50% from your WorkFirst grant and 50% from state funds for some other program. T&E reports are certified reports that reflect the actual time an employee works in each area. Example, that same employee might have actually only spent 40% of their time working on WorkFirst stuff and 60% of their time working on the state funding stuff. If/when T&E reports are submitted with different %s payroll may often need to be adjusted. More on that later.

Time and effort reporting systems Guidelines Page 6 Three Acceptable T&E Systems: After-the-Fact Activity Report Plan-Confirmation Multiple Confirmation There are 3 acceptable T&E systems or methods. After the Fact activity reports Employees log hours worked in each funding source after they worked those hours Plan Confirmation These have initial estimates. Employees then confirm or adjust the estimates at the end of a period of time. Multiple Confirmation method This is a mix of 1 & 2. Won’t talk much about this. Don’t believe anyone is using this, but if you are, be sure to follow both sets of rules. If questions, contact SBCTC, and we’ll work with you one-on-one.

Time and effort reporting systems Guidelines Page 6 Employees Can Complete: Classified: After-the-Fact Activity Report Exempt Staff & Faculty: Plan-Confirmation Multiple Confirmation Page 6 of the Guidelines identifies which employees can complete which types of T&E reports. Classified employees MUST complete After the Fact reports. They have NO OTHER OPTIONS. Exempt staff and faculty can complete T&E using any of the methods. Because there is only 1 option for classified staff, an organization may choose to have all employees do After the Fact reporting. SBCTC does this, and it has been praised by federal auditors. That’s not to say you can’t have exempt staff or faculty use the Plan Confirmation system though. You absolutely can.

Time and effort reporting systems After-the-fact Guidelines Page 7-8 1. Initial budget estimates Funding sources identified Must monitor and adjust as necessary 2. Recording Activity Account for 100% of time Completed at least monthly Correspond to pay periods Let’s talk about the first option – After the Fact reports. The method that classified staff MUST use and faculty and exempt staff MAY use. Page 7 of the Guidelines has more information and page 8 has an example form. Some of you asked for best practices – this form is a best practice…with one caveat…. After the Fact reports require initial budget estimates and funding sources to be identified. You’ll see funding sources identified in the example on page 8. You won’t see initial estimates. You’ll have those in your budget records and payroll records though. You may also choose to have the estimates on another page that your employees receive. There must also be a place for employees to record their time worked. They must account for 100% of their time. Each federal and match source must be listed separately. For example, PERKINS - Can’t lump all Perkins grants into one line. “Other” funding sources may be lumped together. These would be any non-federal, non-match sources. Leave must be accounted for as well. Employees must complete and submit T&E reports at least as often as monthly. Auditors say this is realistically as long as one can remember what they did each day.

Time and effort reporting systems After-the-fact Guidelines Page 7-8 3. Verifying/Certifying Signed by employee or other with direct knowledge of work Organization must have way to verify accuracy 4. Forms Must contain requirements in guidelines Forms have to be signed by employees or someone with direct knowledge of their work. We really recommend that employees sign their own forms. Many supervisors don’t have direct knowledge of exactly what an employee does every hour of ever day. There must be a way to verify the accuracy. SBCTC has supervisors sign in addition to employees to help with this verification of accuracy. May still need something else to back it up – appointments on Outlook calendars, etc. Make sure any form you’re using contains the required components on page 7 of the Guidelines.

Time and effort reporting systems After-the-fact Guidelines Page 7-8 5. Reconciling If more than 5% variance, must reconcile actual payroll with T&E reports by end of grant or year, whichever comes first Remember our example before of the employee charged 50% to WorkFirst and 50% to state funding? Remember how their T&E reports reflected 40% of their time worked on WorkFirst activities and 60% on the other activities? The Feds require that if there’s more than a 5% variance in what is/was charged and what was recorded on T&E reports, then the amounts charged to the grant must be changed. You must reconcile T&E reports with amounts charged to grants by the end of the grant or fiscal year, whichever comes first. You must do this before your final billing! This may mean that you need to refund some money to the grant. If you’re unsure how to refund money to the grant, contact me for help.

Only for exempt staff & faculty 1. Initial work plan/budget Time and effort reporting systems Plan-confirmation Guidelines Page 9-10 Only for exempt staff & faculty 1. Initial work plan/budget Funding sources identified Includes $ and % of salary Monitor and adjust as necessary Account for 100% of position’s activities/funding The second method is the Plan Confirmation method. Remember, classified staff can NOT use this method. It’s only for exempt staff or faculty. There are details on this plan on page 9 of the Guidelines and a sample form on page 10. Just like the After the Fact method, it requires funding sources to be identified. It must include estimates $ amounts and %s of salary or effort by funding source. It also has to be monitored and adjusted as necessary. It also has to reflect 100% of the position’s activities/funding. Just like After the Fact, you can lump all the “other” funding together (the non-federal, non-match stuff).

2. Recording Activity Completed per academic term Time and effort reporting systems Plan-confirmation Guidelines Page 9-10 2. Recording Activity Completed per academic term Adjust payroll if more than 5% variance The form has to be completed at lest once per academic term. You also have to adjust payroll and any amounts already billed to the grant if there is more than a 5% variance in what was originally budgeted and charged to a grant.

3. Verifying/Certifying Time and effort reporting systems Plan-confirmation Guidelines Page 9-10 3. Verifying/Certifying Signed by employee or other with direct knowledge of work Must be able to verify work/assignments. Examples: Documented contact with employee Documented contact with supervisor Documented protocol to communicate variances These forms must also be signed by the employee or someone else with direct knowledge of their work. Is this method easier to complete T&E reports? Probably! Is this easier to support and document? Maybe. Maybe not. You still have to be able to verify the percent of time worked by each funding source. You could do this by: Contacting the employee and documenting it. Contacting the supervisor and documenting it. You also need some kind of documented process to capture variances in actual work percentages versus estimated work percentages. This is part of the reason SBCTC uses the After the Fact reporting system for all employees.

Other Time and effort reference Guidelines Page 9 & 11 Single Funding Source Exempt Staff/Faculty funded by a single funding source – 100% Federal or 100% Match – may complete quarterly Certification of Pay statements Let’s move onto something a bit easier.  Exempt staff or faculty funded by a single federal source or a single non-federal source used as match (and NO other funding sources!) may complete a quarterly Certification of Pay statement. There is an example of this on page 11 of the Guidelines. This is NOT for classified staff. Remember classified staff MUST complete After the Fact reports of actual hours worked. Some of you were aware of the Certification of Pay statement and have been doing this. The allowability for this hasn’t changed. However, the frequency has changed. It used to be semi-annual (or twice a year). Not all faculty stay past a quarter though, so to help ensure these get signed before faculty leave, the requirement has changed. The forms must now be signed quarterly. It’s still a simple form and a simple process though.

Other Time and effort reference Guidelines Page 13 Incidental Work No T&E needed if: Assignments are short-term (less than 1 academic term) Not ongoing duties Must still be separately identified and documented in organization’s financial system And some other easy stuff… Incidental work does NOT require T&E reporting as long as: Assignments are short-term in nature, which is defined as less than one academic term. The duties aren’t ongoing. They’re one-time things. If an employee does some incidental work for 2 weeks every quarter, that would be ongoing and would require T&E. You do still have to be able to identify the funding source for this incidental work in your financial system. You should also have some kind of contract or stipend paperwork with the individual that identifies the funding source and method of payment. To my knowledge, this hasn’t ben an audit problem in the past.

Other Time and effort reference Guidelines Page 13 Annual Evaluations Organization must do an internal evaluation annually of T&E reporting/systems. SBCTC or State Auditors Office review does not meet the requirement. One last thing about T&E… Your organization must do an annual internal evaluation of your T&E reporting systems/methods. This is not just an annual review of the actual reports to adjust budgets and charges to grants. This is about the actual methods and processes you’re using. This is about identifying problem areas or holes and fixing things. Although, you can certainly identify and fix things more often than once a year.  SBCTC’s review or your organization or an auditor’s review does not meet this requirement.

Questions? SBCTC Contacts: Contacts Michele Rockwell, Contracts Specialist mrockwell@sbctc.edu / 360-704-4343 Susan Wanager, Policy Associate-Fiscal Management swanager@sbctc.edu / 360-704-4344 Maryam Jacobs, System Internal Auditor mjacobs@sbctc.edu / 360-704-4389 If you have questions after today, you can contact me, Susan Wanager, or Maryam. Questions now?