05/31/2012 page 1 financial management: timekeeping
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05/31/2012 Page 2
Timekeeping: Overview
Written Policies and Procedures
Multiple Activities or Cost Objectives
Single Federal award or Cost Objectives
Estimations
Quarterly Comparisons
Adjustments and Revisions
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Timekeeping:Regulations
2 CFR 225 (formally OMB Circular A-87, Attachment B, Item 8h)
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Timekeeping: Definitions and Terms
Award – means grants, cost reimbursement contracts and other agreements between a State, local and Indian government and the Federal Government
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Timekeeping: Definitions and Terms
Cost Objective - 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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Timekeeping: Definitions and Terms
Personnel Activity Report (PAR) - record maintained by employee working on more than one activity or cost objective which is prepared after the fact, reflecting the actual total activity of the employee, prepared at least monthly and signed and dated by the employee
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Timekeeping: Definitions and Terms
Semi-Annual Certification - certification that employee worked on a single federal award or cost objective. Must be prepared at least semi-annually, signed, and dated by employee or supervisory official having firsthand knowledge of the work performed
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Timekeeping: Content
Financial Management System
(FMS)
Federal Timekeeping Requirements
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Timekeeping: Components of a Good FMS
Written Policies and Procedures New Staff/Position Training Adherence to Approved Policies and
Procedures Annual Review and Training Updates Timely
Policies commit to compliance with state and federal requirements
Procedures have sufficient detail to guide employee compliance, and…
• Require training
• Identify accountability or consequences for compliance, and
• Require coordination between the program office and business office
Characteristics of goodpolicies and procedures
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Training is required when…
• An employee is first assigned to a grant funded position, the employee is trained
• An employee makes an error, the employee is retrained
• Procedures are revised, all affected employees are retrained
• A general risk of error is detected, all affected employees are retrained
Characteristics of goodpolicies and procedures
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Timekeeping: Payroll Components
There are written policies and procedures governing payroll administration
Personnel Costs (salaries and benefits) from the Financial Expenditure Report (formerly DS-4044) agree with the district’s general ledger payroll accounts for all federal grant programs
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Timekeeping: Payroll Components
All personnel costs for work performed are within the grant period
Personnel costs must comply with the employment contract which indicates the annual salary scale for the grant period
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Timekeeping: Written Policies and Procedures There are written policies and
procedures on recording time distribution for employees who work on one or more federal awards or cost objectives
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Timekeeping: Single Federal Award or Cost
ObjectiveFor employees working solely on a single federal award OR cost objective:
The district has semi-annual certifications or a blanket certification show that the employees worked solely on a single federal award or cost objective
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Timekeeping: Single Federal Award or Cost
ObjectiveThe certifications are prepared at least
semi-annually
The certifications are signed by the employees or a supervisor with first-hand knowledge of the work performed by the employees and are completed and dated after the fact
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Timekeeping: Single Federal Award or Cost
ObjectiveThe certifications are records of actual
work performed and not prepared in advance of the time period covered or based on budget estimates.
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Timekeeping: Multiple Activities or Cost
ObjectivesFor employees working on multiple
activities OR cost objectives:
The district has Personnel Activity reports (PARs)
The PARs are prepared at least monthly
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Timekeeping: Multiple Activities or Cost
Objectives The PARs are signed and dated by the
employee
The PARs account for the staff person’s actual total activity
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Timekeeping: Multiple Activities or Cost
Objectives The PARs must reflect an after-the-fact
distribution of the actual activity of each employee
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Timekeeping: Implementation
There are only four (4) possible options to consider when determining whether to complete a semi-annual certification or personnel activity report. All possible circumstances will apply to one of the four options.
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Timekeeping: Implementation
Decision Making Tools:
Decision Making Rubric
Decision Making Graphic
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Timekeeping: Decision Making Rubric
When to do a Semi-Annual Certification or a Monthly
PAR ?
Cost Objective
Single
Multiple
Grant
Awards (or funding source)
Single Do Semi-Annual
Certification(A)
Do MonthlyPAR(C)
Multiple Do Semi-Annual
Certification(B)
Do MonthlyPAR(D)
Example A:
Single Award/ Single Cost Objective
A school district could have an employee funded with a single federal award and working on a single cost objective
In Career and Technical Education, a health occupations teacher working all their time at the career center, a semi-annual certification is required.
Example – Semi Annual Certification
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Example B-1:
Multiple Awards/ Single Cost Objective
A school district could have an employee funded with more than one federal award working on a single cost objective, where the awards support the cost objective
In IDEA, Part B Sec. 611 supports students ages 3-21 and Sec. 619 supports ages 3-5. If the employee works with only ages 3-5 on both awards, a semi annual certification is appropriate.
Example – Semi Annual Certification
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Example B-2:
Multiple Awards/ Single Cost Objective
A school district could have an employee funded with more than one federal award or a federal and state award working on a single cost objective, where both awards support the cost objective
A district with a Migrant summer school program supports the teacher’s costs with both Migrant Education federal funds and an allowable non-federal award, a semi-annual certification is appropriate
Example – Semi Annual Example – Semi Annual CertificationCertification
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Example C:
Single Award/ Multiple Cost Objectives
A school district could have an employee funded with a single federal award and working on multiple cost objectives
A teacher paid 100% with Title I funds spends 80% of his time providing supplementary math instruction to students in a Targeted Assistance school, and 20% of his time developing and conducting Parent engagement (a required set aside).
Example - PAR
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Example D:
Multiple Awards/ Multiple Cost Objectives
A school district could have an employee funded with multiple federal awards and working on multiple cost objectives
In IDEA, Part B Sec. 611 supports students ages 3-21 and Sec. 619 supports ages 3-5. If the employee works with students 3-5 and 6-21 a PAR is required
Example - PAR
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Timekeeping: Estimations
At beginning of year, use budget estimates for salary allocations
• Initially, use budget estimates or other distribution percentages determined before the services are performed
But these do not qualify as PARs!
May be used for interim accounting purposes
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Timekeeping: Comparisons and Adjustments
Compare budget estimates to actual data and make adjustments
• If difference between actual cost and budgeted cost is 10% or greater, then make adjustment quarterly
• If difference is less than 10%, then make adjustment annually
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Timekeeping: Budget Revisions
Budget estimates or other distribution percentages are revised at least quarterly, if necessary, to reflect changed circumstances
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Timekeeping: Sample Certifications and
Reports Semi-annual certifications
Personnel activity reports
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Timekeeping:FAQs
What are the audit requirements?
Your auditor will take a sample of expenditures and request timekeeping documentation for anyone charged to federal funds. If your records are insufficient, the auditor will include a finding in the audit report and may question costs. See the Michigan School Auditing Manual for further information
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Timekeeping:FAQs
What happens if you cannot produce the documentation for the single audit?
Auditor will question 100% of salaries and fringes. The penalty is a repayment
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Timekeeping: Other Resources
The Michigan School Auditing Manual
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Timekeeping: Other Information
Contacts
• MDE: Office of Audits
MDE program offices
• ISD:
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MDE/MAISA Monitoring and Compliance Committee
Becky Rocho, Calhoun ISD, (269) 781-5141 rochob@calhounisd.org
Patty Cantú, MDE, Office of Career and Technical Education, (517) 373-3373
cantup@michigan.gov
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Timekeeping Subcommittee
Stephanie Murray – ISD ChairTraverse Bay Area Intermediate School District(231) 922-6417; SMURRAY@tbaisd.org
Margaret Madigan, MDE Co-ChairMDE – Office of Field Services(517) 373-4588; madiganm@michigan.gov
Kathy Weller – MDE Co-ChairMDE – Office of Audits(517) 335-6858; wellerk@michigan.gov
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Timekeeping Subcommittee David Gray
MDE - Office of Field Services(517) 373-0161; grayd@michigan.gov
Pat MeauxMDE – Office of Field Services(517) 373-4212; meauxp@michigan.gov
Harvey VermeeschLapeer County ISD(810) 664-1124; hvermeesch@lcisd.k12.mi.us
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