Time and Effort Reporting Erick Akins Title III Director St. Philip’s College
Purpose and Scope • The federal government requires time and effort certification to be completed when individuals are compensated by or have agreed to contribute time (in kind/match) to a federally-funded program or project. The procedures concerning time and effort reporting process is defined in accordance with OMB Circular A-21 (2 CFR Part 220).
Purpose and Scope (continued) • Time and effort reporting has been a primary focus of many federal and external auditors. The reporting of inaccurate, incomplete, or untimely effort reports could have an institution facing substantial penalties and disallowed costs. For example, some universities have repaid large sums of dollars to settle accusations of submitting false time and effort reports.
Definitions • 2 CFR Part 220 – This is the Code of Federal Regulations that contains “Cost Principles for Educational Institutions” (OMB Circular A-21). These cost principles include regulations defining what costs are allowable and allocable to federal grants. Additionally, they include regulations on the maintenance of time and effort reporting for all persons who are fully or partially compensated for personnel services with federal grant funds.
Definitions • Time and Effort • Time and Effort Reporting • Cost Objective • Multiple Cost Objectives • Office of Management and Budget (OMB) • Personnel Activity Report (PAR) • Semi Annual Certification • Single Cost Objective
Semi-Annual Certification • This type of time and effort certification is used for an employee working on a single cost objective that confirms effort has been spent solely on activities allowable under the terms and conditions of a specified grant. For example, an institution is required at a minimum to certify twice a year that the salaries charged to a sponsored award reasonably reflect the work performed under the award.
Single Cost Objective • This is when an employee is considered to be working on a single cost objective if: the employee is paid fully or partially with federal grant funds or the employee works solely on activities allowable under the terms and conditions of a specific federal grant.
Requirements Regarding Time and Effort Certification • OMB Circular A-21/2 CFR Part 220 requires that institutions develop a process to determine or confirm how individuals paid with federal funds expend effort during a specified time period. Failure to adequately document employees’ time and effort related to federal funds could result in audit findings, questioned costs consisting of salaries, wages, and related benefits, or potential repayment of disallowed costs.
Documentation Retention • All federal grant documents (including but not limited to PARs, Semi-Annual Certifications, Variance Reports) shall be retained for a minimum of three (3) years after the end of the grant period. If any litigation, claim, negotiation, audit or other action involving the records has been started before the expiration of the 3-year period, the records must be retained until completion of the action and resolution of all issues which arise from it, or until the end of the regular 3-year period, whichever is later.
The difference between effort reporting and payroll distribution • Payroll distributions and effort reports are not the same thing. • Payroll distributions are the distribution of an individual's salary, while effort reports describe the allocation of an individual's actual time and effort spent for specific projects, whether or not reimbursed by the sponsor. Thus effort reporting is separate from and can be independent of salary charges. • Effort is not just a verification of the salary or payroll distribution. Cost-shared or contributed effort must be included in effort reports.