Time and Effort Time and Effort ReportingReporting

Office of Superintendent of Office of Superintendent of Public Instruction (OSPI)Public Instruction (OSPI)

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Why Does Time and Effort Why Does Time and Effort Continue to be an Audit Continue to be an Audit Problem?Problem? Large percent of federal education Large percent of federal education

funds used for staffing.funds used for staffing. Staff turnover.Staff turnover. Decentralized responsibilities.Decentralized responsibilities. Lack of adequate communication Lack of adequate communication

between program and fiscal staff.between program and fiscal staff. Complexity of applying requirements Complexity of applying requirements

to variety of situations.to variety of situations. People don’t like it!People don’t like it!

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Know The BasicsKnow The Basics

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Where are the Where are the Requirements?Requirements? Time and effort reporting is required Time and effort reporting is required

under 2 CFR Section 225 (formerly under 2 CFR Section 225 (formerly Federal Office of Management and Federal Office of Management and Budget’s Circular A-87, Budget’s Circular A-87, Cost Cost Principles for State, Local, and Principles for State, Local, and Indian Tribal Governments).Indian Tribal Governments).

Attachment B, Selected Items of Attachment B, Selected Items of Cost, Compensation for personal Cost, Compensation for personal services.services.

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When is Time and Effort When is Time and Effort Required?Required?

Time and effort reporting is Time and effort reporting is required when required when anyany part of an part of an employee’s salary is:employee’s salary is: Charged to a federal program.Charged to a federal program. Used as match for a federal program.Used as match for a federal program.

Employee’s time is split between Employee’s time is split between an indirect and any direct cost an indirect and any direct cost objective.objective.

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What is an employee?What is an employee?

Salaries, wages and benefits are Salaries, wages and benefits are charged under objects 2, 3 and 4.charged under objects 2, 3 and 4.

An employee is NOT a vendor or An employee is NOT a vendor or independent consultant/contractor.independent consultant/contractor. No time and effort is needed for No time and effort is needed for

non-employees. non-employees. (See OMB Circular A-133 (See OMB Circular A-133 __.210 for vendor criteria.) __.210 for vendor criteria.)

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What type of reporting is What type of reporting is needed?needed?

Single cost objective Single cost objective

→→Semi annual certification.Semi annual certification.

Multiple cost objectives Multiple cost objectives →Monthly time reports or →Monthly time reports or Personnel Activity Reports Personnel Activity Reports (PARs).(PARs).

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What is a “cost objective”?What is a “cost objective”?

A particular set of work activities A particular set of work activities for which cost data is for which cost data is accumulated.accumulated.

For purposes of time and effort For purposes of time and effort reporting: Define cost objectives reporting: Define cost objectives according to the set of work activities according to the set of work activities allowable under the terms and allowable under the terms and conditions of each funding source. conditions of each funding source. (Examples: Parent Involvement or Professional Development (Examples: Parent Involvement or Professional Development in a Federal Program.)in a Federal Program.)

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What are some typical What are some typical examples of single cost examples of single cost objectives?objectives?The set of work activities allowable The set of work activities allowable

under:under: A single federal program.A single federal program. A single required set-aside/reserve in A single required set-aside/reserve in

a federal program.a federal program. Federal Special Education and State Federal Special Education and State

Special Education.Special Education. A schoolwide program.A schoolwide program. A federal program and its state/local A federal program and its state/local

match.match.04/10/2304/10/23

What are some typical What are some typical examples of multiple cost examples of multiple cost objectives?objectives?

The work activities of:The work activities of: A federal program with multiple A federal program with multiple

set-asides/reserves.set-asides/reserves. A federally-funded program and a A federally-funded program and a

state-and/or locally-funded state-and/or locally-funded program.program.

A schoolwide program and a A schoolwide program and a program not combined in the program not combined in the schoolwide program.schoolwide program.

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What is a semi annual What is a semi annual certification?certification?

Statement (certification) individual(s) Statement (certification) individual(s) worked solely on activities related to a worked solely on activities related to a single cost objective during defined single cost objective during defined dates.dates.

Completed at least every six months.Completed at least every six months. Signed and Signed and dateddated by employee by employee oror

supervisor with first-hand knowledge of supervisor with first-hand knowledge of work performed.work performed.

For internal control purposes, district For internal control purposes, district may request both employee and may request both employee and supervisor sign.supervisor sign.

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What is a monthly time report?What is a monthly time report?(PAR)(PAR)

Accounts for total worked time/activity Accounts for total worked time/activity (including non-federal time).(including non-federal time).

Prepared and signed at least monthly.Prepared and signed at least monthly. Signed and dated by employee.Signed and dated by employee. Reflects actual work performed (not Reflects actual work performed (not

budgeted).budgeted). Agrees with supporting Agrees with supporting

documentation.documentation.

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What type of supporting What type of supporting documentation is needed?documentation is needed?

Requires a judgment call. Requires a judgment call. Examples include, but are not Examples include, but are not

limited to:limited to: Class schedules.Class schedules. Number of students.Number of students. Number of minutes.Number of minutes. Calendars or work logs.Calendars or work logs.

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When is a “reconciliation” When is a “reconciliation” required?required?

Payroll records must be Payroll records must be compared to time and effort compared to time and effort reports at least quarterly to reports at least quarterly to ensure no unallowable charges ensure no unallowable charges to federal awards.to federal awards.

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When is an accounting When is an accounting adjustment required?adjustment required?

If the difference is 10 percent or more: If the difference is 10 percent or more: Payroll charges must be adjusted at the Payroll charges must be adjusted at the

time of the reconciliation.time of the reconciliation.

AND:AND: The following quarter’s budget The following quarter’s budget estimates must be adjusted to more closely estimates must be adjusted to more closely reflect actual activity.reflect actual activity.

If the difference is less than 10 percent:If the difference is less than 10 percent: No accounting adjustment is required until No accounting adjustment is required until

the end of the year.the end of the year.

BUT:BUT: At year-end At year-end any any payroll charges to payroll charges to federal awards that exceed actual time and federal awards that exceed actual time and effort must be eliminatedeffort must be eliminated..

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Who should sign the Who should sign the reports?reports?

Monthly reportsMonthly reports (PARs) (PARs) mustmust be be signed by the employee.signed by the employee.

Semi-annual certificationsSemi-annual certifications must must be signed by employee or be signed by employee or supervisor having first-hand supervisor having first-hand knowledge of work performed.knowledge of work performed.

For internal control purposes, For internal control purposes, districts may require both the districts may require both the employee and supervisor to sign.employee and supervisor to sign.

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Schoolwide ProgramsSchoolwide Programs

A schoolwide plan A schoolwide plan mustmust specify specify programs to be combined.programs to be combined.

A schoolwide program is a single cost A schoolwide program is a single cost objective if an employee works 100 objective if an employee works 100 percent on programs combined percent on programs combined → → Group or Individual Group or Individual Semi-annual Semi-annual certification permitted.certification permitted.

If an employee works partially on If an employee works partially on programs combined and partly on those programs combined and partly on those not combined → not combined → Monthly time report Monthly time report (PAR) required.(PAR) required.

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Supplemental Contracts, Supplemental Contracts, Stipends, Extra HoursStipends, Extra Hours

Primary contract and additional Primary contract and additional contracts may be reported contracts may be reported separately.separately.

Time and effort may be required Time and effort may be required for primary contract but not for primary contract but not supplemental (or vice versa).supplemental (or vice versa).

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AdministratorsAdministrators

Superintendent, assistant Superintendent, assistant superintendent, principal, superintendent, principal, assistant principal are usually assistant principal are usually not allowable charges to federal not allowable charges to federal programs;programs; Exceptions require detailed Exceptions require detailed

documentation to support.documentation to support. Generally a supplant issue.Generally a supplant issue.

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What is a substitute What is a substitute system?system? Alternative method for calculating and Alternative method for calculating and

supporting compensation charges to supporting compensation charges to federal grant funds (usually based on a federal grant funds (usually based on a statistical sample of work performed).statistical sample of work performed).

Used only for federal programs specified Used only for federal programs specified in approved substitute system plan.in approved substitute system plan.

Must be approved by OSPI Must be approved by OSPI priorprior to use. to use. Must be statistically sound.Must be statistically sound. Should be periodically reviewed to Should be periodically reviewed to

determine if still appropriate.determine if still appropriate.

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Other Requirements for Other Requirements for Charging Compensation to Charging Compensation to Federal ProgramsFederal Programs

Reasonable, necessary and Reasonable, necessary and allocable to the program charged.allocable to the program charged.

Compensation consistent with Compensation consistent with nonfederal activities of the district.nonfederal activities of the district.

Leave buy-out at termination is an Leave buy-out at termination is an indirect charge.indirect charge.

Supplement, not supplant applies to Supplement, not supplant applies to many programs.many programs.

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Tips……Tips……

Know the basics.Know the basics. Train and re-train:Train and re-train:

Annual training in district.Annual training in district. Explain the “why”.Explain the “why”. OSPI Bulletin – Keep it handy.OSPI Bulletin – Keep it handy.

Assign central responsibility:Assign central responsibility: Ensure all reports are completed.Ensure all reports are completed.

Communicate:Communicate: WhoWho needs to communicate needs to communicate whatwhat

changes to changes to whomwhom.. Ask for help if needed.Ask for help if needed.

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DiscussionDiscussion

Missing time and effort report Missing time and effort report documentation is one of the documentation is one of the most frequent and costly audit most frequent and costly audit findings in the state. How findings in the state. How does/can your district ensure does/can your district ensure that every employee required to that every employee required to report time and effort does so?report time and effort does so?

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Questions?Questions?

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For Additional InformationFor Additional Information

See OSPI Bulletin 051-11See OSPI Bulletin 051-11 Examples.Examples. Sample forms.Sample forms.

2 CFR Section 225 (OMB Circular A-87, Cost Principles for State, Local, and Tribal Governments))

Time and effort FAQs Time and effort FAQs (on CPR website)(on CPR website)04/10/2304/10/23