Financial Management: Timekeeping

1. Financial Management: Timekeeping

2. Timekeeping: Overview • Written Policies and Procedures • Multiple Activities or Cost Objectives • Single Federal award or Cost Objectives • Estimations • Quarterly Comparisons • Adjustments and Revisions

3. Timekeeping:Regulations • 2 CFR 225 (formally OMB Circular A-87, Attachment B, Item 8h)

4. Timekeeping: Definitions and Terms • Award – means grants, cost reimbursement contracts and other agreements between a State, local and Indian government and the Federal Government

5. 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

6. 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

7. 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

8. Timekeeping: Content Financial Management System (FMS) Federal Timekeeping Requirements

9. 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

10. Characteristics of goodpolicies and procedures • 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

11. Characteristics of goodpolicies and procedures • 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

12. 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

13. 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

14. 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

15. Timekeeping: Single Federal Award or Cost Objective For 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

16. Timekeeping: Single Federal Award or Cost Objective • The 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

17. Timekeeping: Single Federal Award or Cost Objective • The certifications are records of actual work performed and not prepared in advance of the time period covered or based on budget estimates.

18. Timekeeping: Multiple Activities or Cost Objectives For employees working on multiple activities OR cost objectives: • The district has Personnel Activity reports (PARs) • The PARs are prepared at least monthly

19. 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

20. Timekeeping: Multiple Activities or Cost Objectives • The PARs must reflect an after-the-fact distribution of the actual activity of each employee

21. 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.

22. Timekeeping: Implementation Decision Making Tools: • Decision Making Rubric • Decision Making Graphic

23. Timekeeping: Decision Making Rubric

24. Timekeeping: Decision Making Graphic

25. Example – Semi Annual Certification 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.

26. Example A

27. Example – Semi Annual Certification 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.

28. Example – Semi Annual Certification • 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

29. Example B

30. Example - PAR 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).

31. Example C

32. Example - PAR 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

33. Example D

34. 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

35. 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

36. Timekeeping: Budget Revisions • Budget estimates or other distribution percentages are revised at least quarterly, if necessary, to reflect changed circumstances

37. Timekeeping: Sample Certifications and Reports • Semi-annual certifications • Personnel activity reports

38. Place to attach link to sample forms

39. 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

40. 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

41. Timekeeping: Other Resources • The Michigan School Auditing Manual

42. Timekeeping: Other Information • Contacts • MDE: Office of Audits MDE program offices • ISD:

43. Committee Membership

44. 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

45. Timekeeping Subcommittee • Stephanie Murray – ISD Chair Traverse Bay Area Intermediate School District (231) 922-6417; SMURRAY@tbaisd.org • Margaret Madigan, MDE Co-Chair MDE – Office of Field Services (517) 373-4588; madiganm@michigan.gov • Kathy Weller – MDE Co-Chair MDE – Office of Audits (517) 335-6858; wellerk@michigan.gov

46. Timekeeping Subcommittee • David Gray MDE - Office of Field Services (517) 373-0161; grayd@michigan.gov • Pat Meaux MDE – Office of Field Services (517) 373-4212; meauxp@michigan.gov • Harvey Vermeesch Lapeer County ISD (810) 664-1124; hvermeesch@lcisd.k12.mi.us