Time and Effort Reporting Office of Superintendent of Public Instruction (OSPI)
Why Does Time and Effort Continue to be an Audit Problem? • Large percent of federal education funds used for staffing. • Staff turnover. • Decentralized responsibilities. • Lack of adequate communication between program and fiscal staff. • Complexity of applying requirements to variety of situations. • People don’t like it!
Where are the Requirements? • Time and effort reporting is required under 2 CFR Section 225 (formerly Federal Office of Management and Budget’s Circular A-87, Cost Principles for State, Local, and Indian Tribal Governments). • Attachment B, Selected Items of Cost, Compensation for personal services.
When is Time and Effort Required? • Time and effort reporting is required when any part of an employee’s salary is: • Charged to a federal program. • Used as match for a federal program. • Employee’s time is split between an indirect and any direct cost objective.
What is an employee? • Salaries, wages and benefits are charged under objects 2, 3 and 4. • An employee is NOT a vendor or independent consultant/contractor. • No time and effort is needed for non-employees. (See OMB Circular A-133 __.210 for vendor criteria.)
What type of reporting is needed? • Single cost objective →Semi annual certification. • Multiple cost objectives →Monthly time reports or Personnel Activity Reports (PARs).
What is a “cost objective”? • A particular set of work activities for which cost data is accumulated. For purposes of time and effort reporting: Define cost objectives according to the set of work activities allowable under the terms and conditions of each funding source. (Examples: Parent Involvement or Professional Development in a Federal Program.) .
What are some typical examples of single cost objectives? The set of work activities allowable under: • A single federal program. • A single required set-aside/reserve in a federal program. • Federal Special Education and State Special Education. • A schoolwide program. • A federal program and its state/local match.
What are some typical examples of multiple cost objectives? The work activities of: • A federal program with multiple set-asides/reserves. • A federally-funded program and a state-and/or locally-funded program. • A schoolwide program and a program not combined in the schoolwide program.
What is a semi annual certification? • Statement (certification) individual(s) worked solely on activities related to a single cost objective during defined dates. • Completed at least every six months. • Signed and dated by employee or supervisor with first-hand knowledge of work performed. • For internal control purposes, district may request both employee and supervisor sign.
What is a monthly time report?(PAR) • Accounts for total worked time/activity (including non-federal time). • Prepared and signed at least monthly. • Signed and dated by employee. • Reflects actual work performed (not budgeted). • Agrees with supporting documentation.
What type of supporting documentation is needed? • Requires a judgment call. • Examples include, but are not limited to: • Class schedules. • Number of students. • Number of minutes. • Calendars or work logs.
When is a “reconciliation” required? • Payroll records must be compared to time and effort reports at least quarterly to ensure no unallowable charges to federal awards.
When is an accounting adjustment required? If the difference is 10 percent or more: • Payroll charges must be adjusted at the time of the reconciliation. • AND: The following quarter’s budget estimates must be adjusted to more closely reflect actual activity. If the difference is less than 10 percent: • No accounting adjustment is required until the end of the year. • BUT: At year-end any payroll charges to federal awards that exceed actual time and effort must be eliminated.
Who should sign the reports? • Monthly reports (PARs) must be signed by the employee. • Semi-annual certifications must be signed by employee or supervisor having first-hand knowledge of work performed. • For internal control purposes, districts may require both the employee and supervisor to sign.
Schoolwide Programs • A schoolwide plan must specify programs to be combined. • A schoolwide program is a single cost objective if an employee works 100 percent on programs combined → Group or Individual Semi-annual certification permitted. • If an employee works partially on programs combined and partly on those not combined → Monthly time report (PAR) required.
Supplemental Contracts, Stipends, Extra Hours • Primary contract and additional contracts may be reported separately. • Time and effort may be required for primary contract but not supplemental (or vice versa).
Administrators • Superintendent, assistant superintendent, principal, assistant principal are usually not allowable charges to federal programs; • Exceptions require detailed documentation to support. • Generally a supplant issue.
What is a substitute system? • Alternative method for calculating and supporting compensation charges to federal grant funds (usually based on a statistical sample of work performed). • Used only for federal programs specified in approved substitute system plan. • Must be approved by OSPI prior to use. • Must be statistically sound. • Should be periodically reviewed to determine if still appropriate.
Other Requirements for Charging Compensation to Federal Programs • Reasonable, necessary and allocable to the program charged. • Compensation consistent with nonfederal activities of the district. • Leave buy-out at termination is an indirect charge. • Supplement, not supplant applies to many programs.
Tips…… • Know the basics. • Train and re-train: • Annual training in district. • Explain the “why”. • OSPI Bulletin – Keep it handy. • Assign central responsibility: • Ensure all reports are completed. • Communicate: • Who needs to communicate what changes to whom. • Ask for help if needed.
Discussion • Missing time and effort report documentation is one of the most frequent and costly audit findings in the state. How does/can your district ensure that every employee required to report time and effort does so?
Questions? ? ?? ? ??
For Additional Information • See OSPI Bulletin 051-11 • Examples. • Sample forms. 2 CFR Section 225 (OMB Circular A-87, Cost Principles for State, Local, and Tribal Governments) Time and effort FAQs (on CPR website)