Time and Effort Reporting: Documenting Employees’ Personnel Costs Tiffany R. Winters, Esq. twinters@bruman.com Brustein & Manasevit, PLLC Spring 2012 Forum Brustein & Manasevit, PLLC

Federal Cost Principles OMB Circulars A-21 Institutions of Higher Education (2 C.F.R. 220) A-87 State, Local & Indian Tribal Governments (2 C.F.R. 225) A-122 Non-Profit Organizations (2 C.F.R. 230) For Profits: Title 48 C.F.R Part 31 Located at: http://www.whitehouse.gov/omb/circulars_default Brustein & Manasevit, PLLC

Brustein & Manasevit, PLLC Why? All Circulars have Federal Cost Principals – Documentation is required under OMB Circulars!!! Necessary Reasonable Allocable Net of Applicable Credits Total the Actual Cost of the Item (Composition of Cost) Consistently Treated Incurred in Accordance with GAAP Adequately Documented Brustein & Manasevit, PLLC

THE BASICS ON KEEPING TIME ACCOUNTING RECORDS Brustein & Manasevit, PLLC

Brustein & Manasevit, PLLC Terminology Time and attendance records Payroll records Worked 8:00am-4:00pm Time and effort records Time distribution records Brustein & Manasevit, PLLC

Brustein & Manasevit, PLLC OMB Circular A-87: Compensation for Personnel Services: 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. Brustein & Manasevit, PLLC

Brustein & Manasevit, PLLC Who must participate? Any employee who is working on a federal program Not contractors All employees paid with federal funds Some employees paid with non-federal funds Brustein & Manasevit, PLLC

Brustein & Manasevit, PLLC The A-87 Rules!! Brustein & Manasevit, PLLC

A-87: If employee works 100% on single cost objective Semi-Annual Certification Completed at least every six months Signed by a supervisor with knowledge or the employee After-the-fact record (dated) Accounts for the total activity for which employee compensated Must coincide with one or more pay periods Brustein & Manasevit, PLLC

A-87: If employee works 100% on single cost objective Semi-Annual Certification “This is to certify that Tiffany Winters has worked 100% of her time for the period July 1, 2011, through December 31, 2011, on Title I Admin.” Signature of employee: Date: Brustein & Manasevit, PLLC

A-87: If employee works on multiple cost objectives Personnel Activity Reports After-the-fact record (dated) Accounts for the total activity for which employee compensated At least monthly (unless substitute system) Signed by the employee Must coincide with one or more pay periods Brustein & Manasevit, PLLC

Brustein & Manasevit, PLLC A-87: PARs Personnel Activity Reports (PAR) “For the month of December 2011, I, Tiffany Winters, spent my time 50% on Title I Program Services and 50% on non-federal programs.” Signature of Employee: Date: Brustein & Manasevit, PLLC

BRUSTEIN & MANASEVIT: GRANTS MANAGEMENT 101 Time and Effort Documentation QUIZ! Brustein & Manasevit, PLLC

Brustein & Manasevit, PLLC Question 1: A district administrator works approximately half time on NCLB Title I, Part A, and half on IDEA. She is required to keep: Monthly PARs Semi-annual certifications Brustein & Manasevit, PLLC

Brustein & Manasevit, PLLC Question 2: A district administrator works approximately half time on NCLB Title I, Part A, and half on Title I, Part C (Migrant). She is required to keep: Monthly PARs Semi-annual certifications Brustein & Manasevit, PLLC

Brustein & Manasevit, PLLC Question 3: A district administrator spends 100% of his time on NCLB Title I, Part A, although half of his salary is funded from non-federal sources. He is required to keep: Monthly PARs Semi-annual certifications Brustein & Manasevit, PLLC

Brustein & Manasevit, PLLC Question 4: A district administrator works approximately half time on NCLB Title I, Part A, and half on non-federal activities, although his salary is funded 100% from Title I, Part A. He is required to keep: Monthly PARs Semi-annual certifications Bail money on hand Brustein & Manasevit, PLLC

Brustein & Manasevit, PLLC Question 5: The district’s NCLB Director works on Title I, Part A, Title II, Part A, and 21st Century. The district consolidates its NCLB administrative funds. The Director is required to keep: Monthly PARs Semi-annual certifications Brustein & Manasevit, PLLC

Brustein & Manasevit, PLLC Question 6: The district has a contract with an SES provider for afterschool tutoring for students. The contract is paid with Title I funds. Do the contractor’s employees need to keep time and effort records? Yes No Brustein & Manasevit, PLLC

Brustein & Manasevit, PLLC Question 7: Making journal voucher adjustments to accounts typically is unrelated to employees keeping time and effort records. False True Brustein & Manasevit, PLLC

Brustein & Manasevit, PLLC Question 8: A classroom teacher in a targeted assistance school provides Title I services and is paid with Title I, Part A funds. Just like any other federally-paid employee, she is required to keep time and effort records. True False Brustein & Manasevit, PLLC

Brustein & Manasevit, PLLC Question 9: A classroom teacher is paid with non-federal funds used for a match under a federal program. Because she is paid with nonfederal funding, she is not required to keep time and effort records. True False Brustein & Manasevit, PLLC

Brustein & Manasevit, PLLC Question 10: In a schoolwide program, a teacher is paid with Title I funds and works 100% on the schoolwide program plan. What kind of time and effort records is she required to keep? Semi-annual certifications Monthly PARs It depends Brustein & Manasevit, PLLC

OMB Circular A-122: Nonprofit Institutions Similar to A-87 (but not identical) Need PARs to support salaries and wages of all staff paid (in whole or in part) with federal funds Monthly, after-the-fact records, signed by employee or supervisor with knowledge No semi-annual for employees working 100% on single cost objective Brustein & Manasevit, PLLC

OMB Circular A-21: Institutions of Higher Education More flexible rules and more discretion for professorial and professional staff 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 Brustein & Manasevit, PLLC

OMB Circular A-21: IHEs (cont.) 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 Brustein & Manasevit, PLLC

OMB Circular A-21: IHEs (cont.) What is a sponsored agreement: Any grant, contract or other agreement between the institution and the Federal Government. Brustein & Manasevit, PLLC

Brustein & Manasevit, PLLC For Profits ?????? 48 C.F.R. Part 31 Silent on required documentation…. So what does that mean??? Brustein & Manasevit, PLLC

WHAT IS A SINGLE COST OBJECTIVE??? BIG QUESTION WHAT IS A SINGLE COST OBJECTIVE??? Brustein & Manasevit, PLLC

What is a “Cost Objective”? A-87 Definition: A function, organizational subdivision, contract, grant or other cost activity for which cost data are needed and for which costs are incurred. Brustein & Manasevit, PLLC

Brustein & Manasevit, PLLC Examples . . . A Minimum Set-Aside or Maximum Cap: Title I - LEA Parent Involvement minimum (at least 1%); Title III – Cap on administration (no more than 2%) Program services Title I program services Brustein & Manasevit, PLLC

USDE OGC Guidance: Draft Examples of Single Cost Objectives An LEA supports a supplemental math teacher to serve low-achieving students with 50% Title I and 50% state compensatory education funds. Brustein & Manasevit, PLLC

Draft Examples of Single Cost Objectives Each elementary school has a part-time librarian 3 days/week paid with local funds. An LEA adds 2 days/week for its Title I schoolwide schools paid with Title I Part A funds. Brustein & Manasevit, PLLC

Draft Examples of Single Cost Objectives A preschool special education teacher is funded with 50% IDEA section 611 and 50% with IDEA section 619 funds. Brustein & Manasevit, PLLC

Semi-Annual Certification Examples I, Justin Bieber, certify that I worked solely on the Federal Grant program from January 1, 2011 to June 30, 2011. Signature of Employee Signature of Supervisor ____/s/______________ ____/s/______________ Date: September 1, 2011 Date: September 1, 2011 Brustein & Manasevit, PLLC

Semi-Annual Certification Examples I, Taylor Swift, certify that I worked 100% of my time on Title I, Part A Administration from January 1, 2011 to June 30, 2011. Signature of Employee Signature of Supervisor ____/s/______________ ____/s/______________ Date: June 20, 2011 Date: June 20, 2011 Brustein & Manasevit, PLLC

Semi-Annual Certification Examples January 1 through June 30, 2010 I, Barack Obama, certify that I worked solely on project, initiatives, and issues which have implications and consequences based and/or related to Federal programs and policies. Signature of Employee Signature of Supervisor ____/s/______________ ____/s/_______________ Date: June 30, 2010 Date: August 2, 1010 Brustein & Manasevit, PLLC

Brustein & Manasevit, PLLC PAR Examples I certify that for the month of December 2011 I, Lady Gaga, spent my time working on the following programs: Title I, Admin 100% State programs 100%____ Total 200% Signed: ___/s/____ January 5, 2012 Brustein & Manasevit, PLLC

Brustein & Manasevit, PLLC PAR Examples I certify that for the month of December 2011 I, Michelle Obama, spent my time working on the following programs: Title I, Admin 20% State programs 30%____ Total 50% Signed: ___/s/____ January 10, 2012 Brustein & Manasevit, PLLC

Brustein & Manasevit, PLLC PAR Examples Dear Employee: Please sign the pre-populated form if accurate. I certify that for the month of December 2011 I, Ashton Kutcher, spent my time working on the following programs: Title I, Admin 75% State programs 25%____ Total 100% Signed: ___/s/_______ January 5, 2012 Brustein & Manasevit, PLLC

Brustein & Manasevit, PLLC Additional Resources Cost Allocation Guide for State and Local Governments (or “Green Book”) (Sept. 2009) http://www2.ed.gov/about/offices/list/ocfo/fipao/guideigcwebsite.pdf Montana Compact www.bruman.com Program-specific guidance USDE officials Brustein & Manasevit, PLLC

Ideas for Reducing Burden Brustein & Manasevit, PLLC

Consolidated Administration Combine administration for all NCLB programs NOT non-administrative activities Single Cost Objective Semi-annual certification LEA needs approval of SEA Brustein & Manasevit, PLLC

“Blanket” Semi-Annual Certification Single cost objective (semi-annual cert) Multiple employees Signed by supervisor with first-hand knowledge (principal) Brustein & Manasevit, PLLC

Brustein & Manasevit, PLLC Schoolwide Programs The programs included in the Schoolwide Plan constitute a single cost objective Need for records depends on the extent of consolidation of federal, state, and local funding Can be “conceptual” or “virtual” consolidation – not literal Brustein & Manasevit, PLLC

Schoolwide time records If LEA/school consolidates . . . Then must keep . . . All federal, state, and local funds No time and effort records Federal only (“Consolidated federal pot”) Semi-annual – if works ONLY on SWP Plan (single cost objective) Monthly PAR – if works on SWP Plan and other programs not in Plan (multiple cost objectives) Nothing (only Title I funds SWP) Monthly PAR – if works on SWP Plan and other programs not in Plan (multiple cost objectives) Brustein & Manasevit, PLLC

Keeping the right records is not enough! Need reconciliation between: programs that funded salaries, and programs on which employees actually worked Brustein & Manasevit, PLLC

1) At beginning of year, use budget estimates for salary allocations Initially, use budget estimates or other distribution percentages determined before the services are performed But these do not qualify as PARs! May be used for interim accounting purposes Brustein & Manasevit, PLLC

2) Compare budget estimates to actual data and make adjustments If difference between actual cost and budgeted cost is 10% or greater, then make adjustment quarterly If difference is less than 10%, then make adjustment annually Brustein & Manasevit, PLLC

How to set up time distribution system: 1) Plan initial funding allocations well May use “budget estimates” for initial allocations Supervisors need to be on board Brustein & Manasevit, PLLC

Beware of Re-organizations! CAUTION: Beware of Re-organizations! Brustein & Manasevit, PLLC

Brustein & Manasevit, PLLC 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 Brustein & Manasevit, PLLC

Brustein & Manasevit, PLLC 3) Train employees: On mechanics of filling out form On which federal program cost objective they are working on Refresher training New employee training Brustein & Manasevit, PLLC

Brustein & Manasevit, PLLC 4) Close supervision Supervisors should be aware of deviations of effort from initial budget estimates Be ready to redirect work of employee or adjust grant supporting salary Brustein & Manasevit, PLLC

USDE “Burden Reduction” Pilot Program USDE is soliciting ideas for pilot programs: mechanisms for consolidating funds in schoolwide programs time and effort reporting under A-87 documenting compliance with other record keeping and reporting requirements Blog Post: www.ed.gov/blog/ Email: burden.pilots@ed.gov Brustein & Manasevit, PLLC

Brustein & Manasevit, PLLC QUESTIONS?? Brustein & Manasevit, PLLC

Brustein & Manasevit, PLLC 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. Brustein & Manasevit, PLLC