Brustein & Manasevit, PLLC OMNI CIRCULAR KEY AREA #1: TIME AND EFFORT STEVEN SPILLAN, ESQ....
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Transcript of Brustein & Manasevit, PLLC OMNI CIRCULAR KEY AREA #1: TIME AND EFFORT STEVEN SPILLAN, ESQ....
Brustein & Manasevit, Brustein & Manasevit, PLLCPLLCBrustein & Manasevit, Brustein & Manasevit, PLLCPLLC
OMNI CIRCULAR KEY AREA #1:
TIME AND EFFORT
STEVEN SPILLAN, [email protected]
MIKE BENDER, [email protected]
BRUSTEIN & MANASEVIT, PLLCSPRING FORUM 2014
Brustein & Manasevit, Brustein & Manasevit, PLLCPLLC
AGENDA
Current Time & Effort Rules
Final Omni Circular
What’s Next?
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Brustein & Manasevit, Brustein & Manasevit, PLLCPLLC
OMB CIRCULARS TIME AND EFFORT RULE
If federal funds are used for salaries, then time distribution records are required.How staff demonstrate allocability
If employee paid with federal funds, then must show that the employee worked on that specific federal program cost objective.
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Brustein & Manasevit, Brustein & Manasevit, PLLCPLLC
WHO MUST PARTICIPATE?
All employees paid with federal funds!!
Some employees paid with non-federal funds When salaries are used for
match purposesNOT contractors
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Brustein & Manasevit, Brustein & Manasevit, PLLCPLLC
DOES “X” EMPLOYEE HAVE TO KEEP TIME AND EFFORT RECORDS?
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Brustein & Manasevit, Brustein & Manasevit, PLLCPLLC
TIME AND EFFORT (CURRENT A-87 RULE)
Semi-Annual Certifications
If an employee works on a single cost objective: After the fact Account for the total
activity Signed by employee or
supervisor Every six months (at
least twice a year)
Personnel Activity Report (PAR)
If an employee works on multiple cost objectives: After the fact Account for total activity Signed by employee Prepared at least
monthly and coincide with one or more pay periods
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Brustein & Manasevit, Brustein & Manasevit, PLLCPLLC
COST OBJECTIVES
What is a cost objective?
“Cost objective” means a function, organizational subdivision, contract, grant, or other activity for which cost data are needed and for which costs are incurred.
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Brustein & Manasevit, Brustein & Manasevit, PLLCPLLCBrustein & Manasevit, Brustein & Manasevit, PLLCPLLC
TIME AND EFFORT GUIDANCE BY OCFO!!!
http://www2.ed.gov/policy/fund/guid/gposbul/time-and-effort-reporting.html
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Brustein & Manasevit, Brustein & Manasevit, PLLCPLLC
OCFO GUIDANCE
It is possible to work on a single cost objective even if an employee works on more than one Federal award or on a Federal award and a non-Federal award.
The key to determining whether it is a single cost objective is whether the employee’s salary and wages can be supported in full from each of the Federal awards on which the employee is working or from the Federal award alone if the employee’s salary is also paid with non-Federal funds.
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Brustein & Manasevit, Brustein & Manasevit, PLLCPLLC
OCFO GUIDANCE EXAMPLES OF SINGLE COST OBJECTIVES:
Title I, Part A funds and State compensatory education funds
An LEA supports a supplemental math teacher to serve low-achieving students with 50 percent Title I, Part A funds and 50 percent State compensatory education funds.
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Brustein & Manasevit, Brustein & Manasevit, PLLCPLLC
OCFO GUIDANCE EXAMPLES OF SINGLE COST OBJECTIVES:
Title I, Part A funds and local funds An LEA supports an elementary school teacher with local
funds but pays her with Title I, Part A funds to provide after-school tutoring for low-achieving students.
Although the teacher could not be paid with Title I, Part A funds to provide elementary education, the portion of her time spent on after-school tutoring is easily separated from her teaching position by her schedule.
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Brustein & Manasevit, Brustein & Manasevit, PLLCPLLC
TIME AND EFFORT (CURRENT A-21 RULE)
Plan Confirmation Budgeted allocations for
professional/professorial staff Updated to reflect any
significant changes in actual work
After-the-Fact Activity Reports Professional/Professorial staff
keep records every six 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.
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Multiple Confirmation Records Variety of records kept in
combination at least monthly.
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Brustein & Manasevit, Brustein & Manasevit, PLLCPLLC
TIME AND EFFORT (CURRENT A-122 RULE)
Personnel Activity Reports:After the factAccount for total activity Signed by employee or supervisor with
first hand knowledge Prepared at least monthly and coincide
with one or more pay periods
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OMNI CIRCULAR: TIME AND EFFORT DOCUMENTATION 200.430 MOST FLEXIBLE AND MOST
CHANGED RULE
Brustein & Manasevit, Brustein & Manasevit, PLLCPLLC
TIME DISTRIBUTION RECORDS “STANDARDS FOR DOCUMENTATION
OF PERSONNEL EXPENSES”
Must be maintained for all employees whose salaries are: Paid in whole or in part with federal
funds 200.430 (i)(1) Used to meet a match/cost share
requirement 200.430(i)(4)
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Brustein & Manasevit, Brustein & Manasevit, PLLCPLLC
COST OBJECTIVES
What is a cost objective? 200.28 (slightly changed)• 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.
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Brustein & Manasevit, Brustein & Manasevit, PLLCPLLC
COST OBJECTIVES (CONT)
Multiple Cost Objectives 200.430(i)(1)(vii):More than one Federal award.A Federal award and a non-Federal
award.An indirect cost activity and a direct cost
activity.Two or more indirect activities that are
allocated using different allocation bases.An unallowable activity and a direct or
indirect cost activity
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Brustein & Manasevit, Brustein & Manasevit, PLLCPLLCBrustein & Manasevit, Brustein & Manasevit, PLLCPLLC
STILL APPLICABLE EVEN WITH NEW OMNI CIRCULAR CHANGES!
OCFO Clarifications Re: “single cost objective”
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OMB A-87 Draft- Super Circular OIG Comments Final- Omni Circular1. After the fact 1. Budget estimates do
not qualify (after the fact)
Add certification re federal false claims act;
1. Internal controls for reasonable assurance charges are accurate
2. Total activity 2. Distribution of charges for work performed
Remove "distribution of charges" language;
2. Reasonably reflect total activity (100%)
3. At least monthly, coincide with pay period
3. Period not to exceed 12 months, may be integrated with payroll
Shorten 12 month certification period;
3. Encompass all activities (fed and nonfed)
4. Signed by employee
4. Signed by employee or supervisor
Verification by supervisor must include review of periodic reports;
4. Support distribution among specific activities
5. If compliant, no source documentation
Require quarterly budget revisions;
5. Official records
Retain A-87 PAR standards.
6. Established accounting policies
Brustein & Manasevit, Brustein & Manasevit, PLLCPLLC
NEW: “STANDARDS FOR DOCUMENTATION OF PERSONNEL EXPENSES” 200.430
Charges for salaries must be based on records that accurately reflect the work performed
1. Must be supported by a system of internal controls which provides reasonable assurance charges are accurate, allowable and properly allocated
2. Be incorporated into official records
3. Reasonably reflect total activity for which employee is compensated
Not to exceed 100%
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Brustein & Manasevit, Brustein & Manasevit, PLLCPLLC
NEW: “STANDARDS FOR DOCUMENTATION OF PERSONNEL EXPENSES” 200.430 (CONT)
4. Encompass all activities (federal and non-federal)
5. Comply with established accounting polices and practices
6. Support distribution among specific activities or cost objectives
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Brustein & Manasevit, Brustein & Manasevit, PLLCPLLC
NEW: “STANDARDS FOR DOCUMENTATION OF PERSONNEL EXPENSES” 200.430 (CONT)
Compare “reasonably reflect” to current law:
Philadelphia $123 millionDetroit $51 millionOrleans Parish $26 million
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Brustein & Manasevit, Brustein & Manasevit, PLLCPLLC
COFAR COMMENTS ON NEW 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.
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Brustein & Manasevit, Brustein & Manasevit, PLLCPLLC
NEW: “STANDARDS FOR DOCUMENTATION OF PERSONNEL EXPENSES” 200.430 (CONT)
Budget estimates alone do not qualify as support for charges to Federal awards 200.430(i)(1)(viii)
Percentages may be used for distribution of total activities 200.430(i)(1)(ix)
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Brustein & Manasevit, Brustein & Manasevit, PLLCPLLC
NEW: “STANDARDS FOR DOCUMENTATION OF PERSONNEL EXPENSES” 200.430 (CONT)
Grantees encouraged to adopt “substitute systems” if approved by cognizant agency for indirect cost 200.430(i)(5)
Acceptable to allocate sampled employees’ supervisors, clerical and support staffs, based on results of sampled employees
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Brustein & Manasevit, Brustein & Manasevit, PLLCPLLC
NEW: “STANDARDS FOR DOCUMENTATION OF PERSONNEL EXPENSES” 200.430 (CONT)
If records meet the standards: the non-federal entity will NOT be required to provide additional support or documentation for the work performed (200.430(i)(2))
BUT, if “records” of grantee do not meet new standards, ED may require PARs (200.430(i)(8)) PARs are not defined!!
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Brustein & Manasevit, Brustein & Manasevit, PLLCPLLC
WHAT’S NEXT?
Changes/clarifications in 2014 Compliance Supplement (April 2014*)
Federal Agencies have until Dec. 26, 2014 to finalize conforming regulations (draft due June 26, 2014)
Agencies must get OMB approval if they want to promulgate more restrictive rules
OMB approval is NOT required if agency simply “clarifies” OMB rules
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Brustein & Manasevit, Brustein & Manasevit, PLLCPLLC
EFFECTIVE DATE
Administrative requirements and cost principles will apply to new awards and to additional funding (funding increments) to existing awards made after Dec 26, 2014.
Existing Federal awards will continue to be governed by the terms and conditions of the Federal award.
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Brustein & Manasevit, Brustein & Manasevit, PLLCPLLC
AGENCY REGULATIONS
Two theories on agency regulations:Agencies will simply adopt corresponding
omni circular language
Agencies will draft own regulations, with possible changes or interpretations
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Brustein & Manasevit, Brustein & Manasevit, PLLCPLLC
SO WHAT DOES ALL THIS MEAN??
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Brustein & Manasevit, Brustein & Manasevit, PLLCPLLC
Disclaimer
This presentation is intended solely to provide general information and does not constitute
legal advice. Attendance at the presentation or later review of these printed materials 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.
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