1. Annual Payroll Certifications July 27, 2011

2. What are Payroll Certifications? Federal Demonstration Partnership project UCR and UCI submitted proposal to participate and DHSS approved A new way to confirm salaries charged to federally funded sponsored projects represent an equitable distribution based on an employee’s work activities. Shift focus from “effort” concept to reasonableness of salaries based on work performed 2

3. Why do Payroll Certifications? Provide greater accountability, accuracy, efficiency, and transparency Better alignment with award’s budget years Paper based process is inefficient The concept of “effort” is confusing 3

4. Comparison of processes Description Effort Reporting System Payroll Certification System System Focus Individuals Fund (Grant or Contract) Certification Frequency Quarterly Annually (Based on project’s budget year) Time frame for distributing the form February, May, August, and November After the end of the project’s budget year Time frame to sign certification 30 days after distribution (Process to be completed within 90 days after the end of the quarter, which is 45 days after receiving the form) 30 days after distribution (Process to be completed within 60 days of the end of the budget year) Signers Individual employee, PI, or person with first-hand knowledge Required: Lead Principal Investigator System Rationale (Theoretical foundation) For Certifying Salaries and Wages Salary Distribution percentages are reasonable based on percentage of work effort Salary amounts are reasonable based on work performed Committed Salary Cost Sharing Cost Shared salaries should be included in percentage of effort Cost Shared salary amounts are reasonable based on work performed NIH Salary Cap Shows total effort expended on the project, but amount reflects cap limitations The acceptable amount is net of the cap disallowance. Special Costing Requirements: Clerical and Administrative, NSF salary limit, No proposal preparation charged to project, NIH cap Not addressed Part of the certification 4

5. What is the department’s role? Assist PI with the new process Review for data integrity Enter cost shared salaries Enter pending cost transfers (hopefully minimal) Review Cost Notes and add comments Ensure certifications are performed Your participation is critical for the success of the demonstration project 5

6. Other Complementing Processes Review of PIWRS Monthly Reports o Provides monthly expenditure and payroll detail o Assist with timely identification and correction of errors o Electronically marking as reviewed is a best practice 6

7. Other Complementing Processes Assist PI with accessing the Payroll Detail Reports within PIWRS o Assist with timely identification and correction of payroll related errors o Directly linked to the Annual Payroll Certification data to facilitate timely certification o Covered in PIWRS Tutorials 7

8. PIWRS Coordinator Role In addition to updating projections and other information on the monthly PIWRS report, this role can access the following payroll certification related items: Listing of Funds Requiring Payroll Certification: http://piwrs.ucr.edu/piwrs/view_annual_certs?p_period=4&p_fiscal_year=2011&p_refresh=Refresh http://piwrs.ucr.edu/piwrs/view_annual_certs?p_period=4&p_fiscal_year=2011&p_refresh=Refresh View Payroll Certification reports under their Accountability Structure(s) via PIWRS Menu Add/Edit Cost Sharing Salary Data (until certified) Add/Edit Salary Adjustments (until certified) Add Comments (until certified) 8

9. Direct Project Salary Adjustments Annual Certifications include salary data only (no benefits) for related budget year. This data is based on posted date not Pay Period End Date. Payroll adjustments (i.e. cost transfers) should be identified and corrected on a monthly basis In order to facilitate the timely certification of the Annual Payroll Certification report, the department should indicate pending payroll corrections affecting the reporting period Direct Project Salary Adjustments should be infrequent These adjustments will automatically show as a reversal in the next annual certification cycle A comment explaining why the adjustment is necessary 9

10. Cost Shared Salaries Cost Shared salaries associated with the award’s budget year being certified should be entered. The FAU associated with the cost shared salaries is required and must be from a non-federal source. In the short term, the paper based cost sharing form will also be required on an annual basis. The long term goal is to feed cost sharing information directly into the Annual Payroll Certification Report from an electronic cost sharing report. 10

11. Cost Notes Potential audit concerns are identified via the Cost Note field on the report. These items should be reviewed to ensure adherence to agency terms and conditions. Add comments as necessary. Cost Note 1: NSF Sr. Project Personnel-2 month salary restriction Cost Note 2: 90%+ salaries to sponsored projects Cost Note 3: Clerical & Admin staff exception Cost Note 4: NIH Salary Cap 11

12. Other Considerations Identify the staff member(s) that will be performing the departmental role – may be different than the person who coordinated PAR(s) – SAA needs to ensure role is assigned The PI has ability to add/edit cost sharing data and adjustments. Once certified, no other edits are allowed. When assisting your PI with payroll certifications, communicate expectations regarding these fields. No re-certifications Budget years ending mid month; salaries only posted at end of month Ensure e-mails from “@ucr.edu” are not directed to junk mail. 12

13. PI Responsibilities Fiduciary responsibilities include review of costs charged to sponsor projects on a monthly basis to ensure the appropriateness of expenses Prompt identification of errors so adjustments can be performed timely Reviewing monthly, PI should have confidence in the salary charges appearing on the annual report PIs certify that payroll expenditures are reasonable in relationship to the work performed, salary costs directly benefit the project and conform to the agency’s term and conditions. 13

14. Timeline: Catch Up Period In order to transition to the Annual Payroll Certification process and avoid preparing effort reports for Spring 2011, the following timeline will be used for April, May, June and July payroll certifications. April 2011 Certifications will be distributed to the coordinators on 7/29/11 and to PIs on 8/8/11 with a due date of 8/29/11 May 2011 Certifications will be distributed to the coordinators on approximately 8/8/11 and to PIs on 8/15/11 with a due date of 9/5/11 June 2011 Certifications will be distributed to the coordinators on approximately 8/15/11 and to PIs on 8/22/11 with a due date of 9/12/11 July 2011 Certifications will be distributed to the coordinators on approximately 8/22/11 and to PIs on 8/29/11 with a due date of 9/19/11 August 2011 Certifications will follow the normal distribution cycle as outlined on the following slides. 14

15. Payroll Certification Email Notifications Several notifications will be system generated on the certification timeline E-mails to the PIWRS Coordinator will be in digest mode when possible A summarization of the recipients and content appear on the following slides 15

16. Notice No. Notification Date: 1 st day following the budget year’s end date Example: For a budget year ending on 04-15-12, a notice will be generated on 04-16-12 Recipient: PIWRS Coordinator(s) – digest format Message: These funds will require Payroll Certification. Please begin reviewing PR expenditures and gathering applicable cost sharing data. 16

17. Notice No. Notification Date: 8 th day of the month following the project’s budget year end date. Example: For a budget year ending between 04-01-12 – 04-30-12, a notice will be generated on 05-08-12 Recipient: PIWRS Coordinator(s) – digest format Message: Annual Payroll Certification is now available for review prior to distribution to the PI on the 15 th of the month. Review reports and enter adjustments & comments as necessary. 17

18. Notice No. Notification Date: 15 th day of the month following the project’s budget year end date. Example: For a budget year ending between 04-01-12 - 04-30-12, a notice will be generated on 05-15-12 Recipients: Prime – Principal Investigator cc – PIWRS Coordinator Message: Explains Payroll Certification must be completed within the next 21 days. 18

19. Notice No. Notification Date: 30 th day of the month following the project’s budget year end date. Example: For a budget year ending between 04-01-12 - 04-30-12, a notice will be generated on 05-30-12 Recipients: Prime – Principal Investigator cc – PIWRS Coordinator Message: As applicable, reminder that Payroll Certifications are due within the next 7 days. Uncertified payrolls may be subject to transfer to an unrestricted funding source within your department and/or organization. 19

20. Notice No. Notification Date: 37 th day of the month following the project’s budget year end date. Example: For a budget year ending between 04-01-12 - 04-30-12, a notice will be generated on 06-06-12 Recipients: Prime – Principal Investigator cc – Department Chair and PIWRS Coordinator Message: As applicable, Payroll Certifications are due today. Uncertified reports will be escalated to your Organizational Unit. Uncertified payrolls may be subject to transfer to an unrestricted funding source within your department and/or organization. 20

21. Notice No. Notification Date: 45 th day of the month following the project’s budget year end date. Example: For a budget year ending between 04-01-12 - 04-30-12, a notice will be generated on 06-13-12 Recipients: Prime – Organizational CFAO cc – Department Chair, PI, PIWRS Coordinator, Accounting Office Message: As applicable, the Payroll Certification is past due for PI. Uncertified salary expenditures are considered unallowable charges to award. An unrestricted departmental/organizational FAU must be provided to within 7 days for transfer of uncertified salaries. 21

22. Policy New Campus Policy on Payroll Certifications is available on the UCR Policy & Procedure website (200-40) Policy was shared with the Ethics and Compliance Risk Committee & Audit and Controls Committee in May 2011 Payroll Certifications were discussed at the Council of Deans in July 2011 22

23. PIWRS Tutorials 23 The following informational materials are available in the UC Learning Center (search for PIWRS). Reviewing these courses is recommended for both Principal Investigators and PIWRS Coordinators. PIWRS: Overview PIWRS: Monthly Expenditure and Payroll Review Tutorial PIWRS: Annual Payroll Certification System

24. Contacts PIs will be referred to their department’s Financial Manager and/or Contract and Grant Analyst with questions regarding the Annual Payroll Certification System. Contact the Computer Support Group (CSG) Help Desk (x-23555) for assistance with popup blockers or connecting to the PI Web Reporting System from off campus using VPN. Please send questions, comments or feedback to piwrsfeedback@ucr.edu. 24

25. Conclusion Participation in this Federal Demonstration Partnership project is an opportunity for UCR to demonstrate there is a more effective process than effort reporting You play an important role in the success of this demonstration that will impact University’s across the United States Thank You! 25

26. Annual Payroll Certification System Demonstration Thank you for attending today’s presentation. 26