1. Time and Effort: From the Beginning to New Flexibility
Steven Spillan Megan Passafaro

2. Agenda The “Old” Rules The Uniform Grant Guidance OMB Circular A-87
The Montana Compact
OCFO Guidance
The Uniform Grant Guidance
New rules
Proposals for Flexibility

3. OMB Circulars

4. Old Standard
Type of documentation depends on how many “cost objectives” the employee worked on
These cost objectives must be connected to the employee’s salary source

5. Time and effort (Old A-87 Rule)
Semi-Annual Certifications
Personnel Activity Report (PAR)
If an employee works on multiple cost objectives:
PAR or equivalent documentation
After the fact
Account for total activity
Signed by employee
Prepared at least monthly and coincide with one or more pay periods
If an employee works on a single cost objective:
Semi-Annual Certification
After the Fact
Account for the total activity
Signed by employee or supervisor
Every six months (at least twice a year)

6. T&E – Old A-122 Rule
PARs:
Professional/Nonprofessional staff keep monthly records
Signed by employee, or responsible supervisory official with first-hand knowledge
Must reflect total activity
At least monthly and coincide with one or more pay periods

9. Old A-21 Rules Plan Confirmation: After-the-fact Activity Report
Based on budgeted, planned, or assigned work activity
Updated to reflect any significant changes in work distribution
At least annually a statement will be signed by the employee, principal investigator, or responsible official(s) using suitable means of verification 
After-the-fact Activity Report
Similar to A-87
At least every six months for professional and professorial staff
Monthly for all other staff
Multiple Confirmation Records
Most flexibility offered
Signed report once every six months (at least)

10. The UGG
2 CFR (i)

11. Uniform Grant Guidance
Proposed in February 2013
OIG Issued comments on time & effort Summer 2013
Finalized in 2014
Went into effect on July 1, 2015 for State-administered programs
Codified in EDGAR & at 2 CFR Part 200

12. Who must participate? 200.430(i)(1) and (i)(4)
Must be maintained for all employees whose salaries are:
Paid in whole or in part with federal funds
Used to meet a match/cost share requirement
NOT contractors

13. Does “X” Employee have to keep time and effort records?
Is she/he an employee?
Yes
Is she/he paid with federal funds?
T&E Required No
Salary used for match?
No T&E Required
No T&E Required
I don’t know
Ask HR

14. Documentation for Personnel Expenses 200.430(i)
NEW: Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed.
How staff demonstrate allocability
If employee paid with federal funds, then must show that the employee worked on that specific federal program cost objective (a)

15. Documentation for Personnel Expenses (cont.) 200.430(i)(1)
NEW: These records MUST:
Be supported by a system of internal controls which provides reasonable assurance charges are accurate, allowable and properly allocated;
Be incorporated into official records;
Reasonably reflect total activity for which employee is compensated;
Not to exceed 100%

16. Documentation for Personnel Expenses (cont.) 200.430(i)(1)
Encompass all activities (federal and non-federal);
Comply with established accounting polices and practices; and
Support distribution among specific activities or cost objectives.

17. COFAR Comments on Part 200 Rule
By focusing more on internal controls, the rule “mitigates the risk that a non-Federal entity… will focus on prescribed procedures... which alone may be ineffective in assuring full accountability.”
Uncovering weaknesses in internal controls or instances of fraud is goal. Not audit findings.

18. Cost Objectives
Program, function, activity, award, organizational subdivision, contract, or work unit for which cost data are desired and for which provision is made to accumulate and measure the cost of processes, products, jobs, capital projects, etc.

19. Allocable Costs (c)
Any cost allocable to a particular Federal award may not be charged to other Federal awards to overcome fund deficiencies, to avoid restrictions imposed by Federal Statutes, regulations, or terms and conditions of the Federal awards, or for other reasons.
However, would not preclude shifting costs that are allowable under two or more Federal awards in accordance with existing Federal statutes, regulations, or the terms and conditions of the Federal award.

20. Allocable Costs (cont.) 200.405(d)
If a cost benefits two or more projects or activities in proportions that can be determined without undue effort or cost, the cost should be allocated to the projects based on proportional benefit.
If proportions cannot be determined, the costs may be allocated or transferred to benefited projects on any reasonable documented basis.

21. Use of Budget Estimates 200.430(i)(1)(viii)
Budget estimates alone do not qualify as support for charges to Federal awards may be used for interim accounting purposes if:
Produces reasonable approximations
Significant changes to the corresponding work activity are identified in a timely manner
Internal controls in place to review after-the-fact interim charges based on budget estimates

22. Reconciliation 200.430(i)(1)(viii)(C)
NEW: All necessary adjustment must be made such that the final amount charged to the Federal award is accurate, allowable, and properly allocated.

23. Percentages 200.430(i)(1)(ix)
NEW: Because practices vary as to the activity constituting a full workload, records may reflect categories of activities expressed as a percentage distribution of total activities.

24. Alternative Proposals 200.430(i)(6)
NEW: Cognizant agencies for indirect costs are encouraged to accept alternative proposals based on outcomes and milestones for program performance.
These plans are acceptable as alternatives to the Part 200 standards.

25. OIG Comments: WORDS OF WARNING
NPRM proposed standards “would seriously undermine our community’s ability to identify and question unallowable and even fraudulent charges.”
Any relaxation of rules would have “significant detrimental impact on government’s ability to protect from fraud, waste, abuse, and improper payments.”

26. OIG Comments: UNIFORM Language
OMB should require uniform language that:
Clearly states that time charged reflects time actually worked on the project; and
Alerts signer that he or she is subject to Federal laws on the submission of false or fraudulent information, such as the Federal False Claims Act.
Include language in certification: By signing this report… I am aware that any false, fictitious, or fraudulent information, or the omission of any material fact may subject me to criminal, civil, or administrative penalties.

27. OIG Comments: UNIFORM Language
OMB Response:
Considered specific certification language BUT rejected the idea.
By focusing more on internal controls, the rule “mitigates the risk that a non-Federal entity… will focus on prescribed procedures... which alone may be ineffective in assuring full accountability.”
Uncovering weaknesses in internal controls or instances of fraud is goal. Not audit findings.

28. OIG Comments: Actual activity
Remove emphasis on “distribution of charges” and place it on actual activity
Payroll distributions are based on budget estimates that do not focus on actual activity
Retain language from A-87:
“Where employees work on multiple activities or cost objectives, a distribution of their salaries or wages will be supported by personnel activity reports or equivalent documentation.”

29. OIG Comments: Actual activity
12 month certifications do not provide adequate oversight
Too extensive a period for persons to identify actual activity performed
Clarify that the use of budget estimates is allowable if “revised at least quarterly”
OIG asks how quarterly adjustments would be validated using only 12 month certifications

30. OIG Comments: Verification
Add a “suitable means of verification” requirement.
Certifications from supervisory personnel must include review of labor distribution reports to ensure effort being charged is reasonable.

31. Compliance (i)(2)
NEW: For records which meet the standards, the non-federal entity will not be required to provide additional support or documentation for the work performed.
DOL regulations for Fair Labor Standards Act must still be met (i.e. charges must be supported by records indicating the total number of hours worked each day).

32. Noncompliance (i)(8)
For a non-Federal entity where the records do not meet these standards:
USDE may require personnel activity reports (PARs), including prescribed certifications or equivalent documentation that support the records as required in this section.
PARs are not defined!!

33. AEFFA’s Proposals: June 15, 2016
Letter:
(On BruMan Website)

34. AEFFA Proposed T&E Flexibility
1. Certification of Actual Time Worked 2. Blanket Certification 3. Official Record of Employee Activities 4. Electronic Submissions/Approvals 5. Roll-up Time and Effort Tracking 6. Allocation of Effort Using a Basis Other than Time

35. Certification of Actual Time Worked
If an employee works on a single cost objective:
Semi-Annual Certifications
After the fact;
Account for the total activity;
Signed by employee or supervisor; and
Every six months (at least twice a year).
AEFFA Proposals
Annual Certification*

36. Certification of Actual Time Worked (cont.)
If an employee works on multiple cost objectives:
A-87 Rule: Personnel Activity Report (PAR)
After the fact;
Account for total activity ;
Signed by employee*; and
Prepared at least monthly and coincide with one or more pay periods.**
AEFFA Proposals
Signed by employee or supervisor with knowledge*
PARs are Monthly or Quarterly**

37. Blanket Certifications
A-87 Permissible Blanket Certification:
Supervisor has first hand knowledge of work performed by several employees:
He/she used a single certification listing all employees and the cost objective that they worked on and the time period covered.
AEFFA Proposals:
The above certification still acceptable documentation
Additionally, supervisor with knowledge could sign a single certification attesting that the named employees all worked in accordance with their stated job descriptions

38. Official Record of Employee Activities
What is an Official Record of Employee Activities (OREA)?
Examples: Job Descriptions or Employee’s schedule
Clearly identifies all cost objectives at beginning of the year
Clearly identifies position and/or accounting codes
Single Cost Objective: OREA is sufficient documentation
Multiple Cost Objective: On an annual basis, employee or supervisor with knowledge certifies that the employee worked in accordance with the OREA
To ensure internal controls in place:
A position/activity change form is used to track changes in an employee’s job or activities and ensure proper reconciliation/allocability.

39. Electronic Submissions/Approvals
Types of Electronic Submissions Include:
On-line or electronic form submission where employee logs in and completes their time using a “check the box” system
submissions from employee
Electronic timesheets
Key here: internal controls!
Passwords
Unique identifiers
Some record trail

40. “Roll up” Time and Effort Tracking
Tracking Supervisors, Clerical and Support Staff
This was permissible under A-87 with permission (as a substitute system).
AEFFA Proposal: This is permissible under the new standard (and would not be a substitute system so no permission needed).
How this works?
Time spent by a supervisor on purely supervisory activities may be allocated based on the average time allocations of the supervised employees.

41. Allocation of Effort Using a Basis Other Than Time
Allocability
When an employee benefits multiple cost objectives in a way that is indistinguishable, may determine the allocability of time using “any reasonable basis”.
If proportions can not be determined because of the interrelationship of the work involved, costs may be allocated on “any reasonable documented basis”.
Meaning – you can use a measure other than time!
Examples:
Paraprofessional teaching supplemental class to students with varying eligibility – could allocate salary based on percentage of students from each funding source.
Accountant’s salary – allocated based on the number of transactions from each funding course. (Permissible under ED’s 1992 Guidance)

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