Subrecipient Monitoring, Cost Transfer, and Time and Effort Certification Training Patrick Landry, Jr. Ella Lee Lynne Tardiff Tai Nguyen March 18,

Why Subrecipient Monitoring?  Subrecipient monitoring is required to ensure that the federal awards are administered according to the laws, regulations, and provisions of contracts or grants agreements, and performance goals are attained. 2

Subrecipient expenditure review includes: Subrecipient expenditure review includes: Ensuring invoices are submitted in accordance with subaward requirements Ensuring invoices only contain expenses that are allowable, allocable and reasonable Verifying costs are incurred within the period of performance Verifying cost sharing is appropriately reflected, if required 3

Department Responsibilities for Subrecipient Monitoring Department Responsibilities for Subrecipient Monitoring Provide Sponsored Projects with copies of signed subaward agreements on Federal Projects Provide Sponsored Projects with required FFATA (Federal Financial Accountability and Transparency Act) information Obtain technical progress reports Obtain prior approval for rebudget 4

Department Responsibilities for Subrecipient Monitoring Department Responsibilities for Subrecipient Monitoring Require timely invoice submission from subrecipient Regular contact with subrecipient Principal Investigator and Business Manager review, approve, and sign off on invoices Perform Desk Audit Note: Please make sure subrecipient is registered in the System for Award Management (SAM). In order to receive federal funding from contracts or grants, an entity must be set up in SAM. 5

Desk Audit Has to be completed within 6 months after the begin date of the subcontract and annually every year after Select transaction(s) for review Requesting full documentation on selected transactions: ◦ Ledgers to verify selected expenses actually posted ◦ Receipts for supplies and other expenses ◦ Travel vouchers for travel expenses ◦ Time and Effort Certification forms/Time Sheets for salary expenses (Keep in mind that the Time and Effort forms may be 6 months behind since this is an after the fact certification) Evaluate documentation provided by subrecipient to be in compliance with OMB A-21 Provide feedback to subrecipient on any concerns Submit copies of desk audit to Sponsored Projects 6

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Audit Findings Dartmouth College ◦ College did not have adequate procedures for monitoring sub recipient costs  No document evidence that the College reviewed audit report to validate the results claimed in the sub recipient letter.  Invoices did not contain information showing current and cumulative expense.  Invoices did not contain dates of services.  Invoice did not contain required signature of subrecipient administrator or evidence of PI’s approval. 8

Federal Financial Accountability and Transparency Act FFATA requires that information on federal contracts and awards be made available to the public via an easy to use single, searchable website. This act was signed into law September 2006; however OMB requires sub recipient reporting for all Federal Funded Prime Awards and Contracts dated on or after October 1, All Prime awardees must report first-tier sub-award information for all sub-awards of $25,000 or more. Pending approval of the revised Research Subaward Agreement the FFATA information will be included. We anticipate the subaward agreement to be effective by July 1,

Why is a cost transfer form required? Why is a cost transfer form required? To comply with the cost allowability and allocability requirements of OMB Circular A-21, it is necessary to explain and justify transfers of charges into federal awards from other federal accounts, non-federal accounts or University accounts. Timeliness and completeness of explanation of transfer are important factors in supporting allowability and allocability in accordance with the principles of the Circular. 10

When is a cost transfer form required? When is a cost transfer form required? For Federal awards A cost transfer form is required anytime a transfer is requested from or to a federal award. For other awards except clinical trials, professional services contracts, and GME contracts A cost transfer form is required within 90 days of the original charge. Cost transfer request after 90 days A detailed explanation for the lateness of the transfer is required. Untimely cost transfers may raise serious questions concerning the propriety of the cost transfer and may be subject to a cost disallowance. Please attached cost transfer form(s) to the retros when routing. 11

Cost Transfer Requirements Cost Transfer Requirements (a) The cost is a proper and allowable charge to the grant. (b) The transfer is supported by documentation containing an explanation and justification of the transfer and a certification by the principal investigator. (c) Revised time and effort certification form if it relates to labor in previous certified time period(s). (d) All questions on the cost transfer form must be answered. (e) The “Explanation of Requested Cost Transfer” section should include a brief summary of the retro/JE. (f) In order to review, the cost transfer request, the following items must be attached to the Cost Transfer Form when routing: 1. Ledger (nVision Report) highlighting the expenditure(s) 2. Attach the per-3 or a copy of the journal entry if applicable 3. A copy of the revised Time and Effort form(s) if applicable 12

Unallowable Cost Transfers Unallowable Cost Transfers A cost transfer from one sponsored project to another will not be processed in the following instances: to cover cost overruns with funds in other sponsored projects to avoid restrictions imposed by the Sponsor for other reasons of convenience. the justification does not adequately support the transfer being requested to “use up” unspent funds from a federally sponsored grant or contract An explanation which merely states that the transfer was made "to correct-error" or "to transfer to correct project" is not sufficient. The cost transfer should not be based on the proposal submitted to the agency. Transfer requests to Sponsored Projects’ awards within 60 days of an award’s end date are not allowed. The cost transfer request has to be in Sponsored Projects’ office at least 61 days before the award’s end date. 13

Questionable explanation Questionable explanation Transfer of supplies that were charged to the department in error. Issue: This explanation does not adequately explain why the wrong chartstring was charged and why/how the charge is appropriate to the chartstring being debited, nor does it describe how the error occurred. The explanation should be expanded to better describe the reason why the chartstring being charged is appropriate and how the amount being transferred was determined. 14

Questionable explanation Questionable explanation To charge a portion of a lab technician’s salary to the project. Issue: The reason for the transfer is missing, and there is no indication of why the Per-3 or timesheet was incorrectly submitted at the time the charge was generated. The phrase “confirmed with the PI” is not sufficient. The description should be expanded to include a description of the individuals’ role on the project, the portion of his/her salary being moved, and how the portion of salary being moved was determined. 15

Time and Effort Certification Policy and Procedures Time and Effort Certification Policy and Procedures Time and Effort Certification is required. Applicable to all employees charged to sponsored grants or contracts. Certification form prints the percentage of effort from the Payroll system. Form must be “signed by the employee or a responsible person who has first-hand knowledge of the employee’s effort.” If actual effort percentages vary by 5% or more from the form, a retroactive change in source of funds must be attached to the Certification Form. 16

Time and Effort Certification Policy and Procedures Time and Effort Certification Policy and Procedures Time and effort was generated before a per-3 was submitted to correct the allocation. Attach a copy of the per-3 that made the change. Effort Percentages Must Total 100%. If there is an error made on the Time and Effort Certification forms, strike through the incorrect information, correct it, and initial each revision. Do not use correctional tape or any similar means of document alteration. If an employee’s effort is changed after his/her Time certification form has been certified, then that employee’s Time and Effort certification form will have to recertified with the updated effort percentages. Forms are to be signed and returned no later than forty-five days from receipt 17

Time and Effort Certification Policy and Procedures Time and Effort Certification Policy and Procedures Electronic Submission of Time and Effort Certification: Faxing and ing scanned signed forms are now permitted. Original must be maintained by the department in accordance with the University’s Record Retention Policy. 18

Links: Subrecipient Monitoring Policy df Subrecipient Monitoring Desk Audit form Cost Transfer Policy: Cost Transfer Form: Time and Effort USA Spending USAspending.gov 19

Links: These links are also on the Sponsored Projects’ website. FFATA System for Award Management Circular A-21 – Cost Principles for Educational Institutes Circular A-110 – Uniform Administrative Requirements for Grants + Agreements with Institutions of Higher Education Hospital and other nonprofit Organization Circular A-133 – Compliance Supplement + Governmental Auditing Standards Special Compliance Requirements per CFDA Effective December 26, 2014, some of these procedures and Circulars may be changing. 20