1. Payroll Reallocations as They Pertain to Sponsored Program Projects February 22, 2010 Sponsored Programs Accounting (906)487-2244 Website: http://www.mtu.edu/research/administration/accounting /

2. Goals/Objectives Review of the reallocation form. Reduce the need for reallocations. Explain the relationship between reallocations and effort certifications. When is a reallocation necessary and clarify the requirement for reallocations past 90 days. Miscellaneous topics. Questions 2

3. Review of the Payroll Reallocation Form Payroll weblink to the reallocation form: http://www.admin.mtu.edu/hro/forms/payrollr eallocationform0608.pdf 3

4. Reduce the need for reallocations Determine the distribution of payroll up front. – Time overrides – Account distribution Form Request an advance of funds from the Sponsored Programs Office. http://www.mtu.edu/research/administration/sponsored- programs/pdf/advance2.pdf 4

5. The relationship between reallocations and effort certifications. What are effort certifications and why are they necessary? If an effort certification is incorrect a payroll reallocation may be necessary. A reallocation done after a effort certification has been signed becomes a “re-certification of effort”. 5

6. Clarify the requirement for reallocations past 90 days. Expenditures reallocations to sponsored projects after 90 days of the original charge is generally unallowable. OMB Circular A-133, Federal guidelines for auditors specifically directs auditors to target: “projects that are complete or in the later stages of completion. Frequent, untimely, and poorly documented reallocations can be an indicator of poor internal control”. 6

7. When is a payroll reallocation necessary? To correct data entry errors found after reviewing monthly account summaries. 7

8. Reallocations necessary and exceptions to 90 day requirement: Official paperwork for an award is delayed (could request an advance) Charging another sponsored project while waiting for another to be awarded. A semester effort certification is received and there is a problem with the % effort. It is determined that an unallowable expense is charged to the project. When reallocating to another index under the same award. 8

9. Miscellaneous Topics: Justification should always include: Why the expense was not originally charged to the correct project. How the expenditure relates/benefits the project being charged. Other to the sponsors and auditors: Reallocations charging one sponsor project to clear a deficit in another. Reallocations at the end of the project to spend the remaining balance. 9

10. QUESTIONS? 10