Hot Topics Update

1. Hot Topics Update • Effort Reporting • Cost Sharing • SubRecipient Monitoring Presented by Velma Stamp, Director, Grants and Contracts Accounting University Purchasing Medical University of South Carolina

2. The Hottest Issue: Effort Reporting Under Increased Awareness & Scrutiny Why? • The Process is Used to Validate Salary Charges • Salary is the Most Significant Line Item of an Award

3. Common Challenges Related to Effort Reporting • PI Commitment Greater than 100% of Effort • Nine vs. Twelve Month Appointments • Faculty not Meeting K-Award Effort Commitments of 75% • Re-budgeting Without Sponsor Approval • Committed Cost-Sharing not Reported

4. Common Challenges Related to Effort Reporting • NIH Salary Cap • Effort Certified by Individual not Familiar with Faculty Activities • Cost Transfer Significance • Cost transfers not Incorporated into Certification or Made after Certification • All Activities not Considered

5. Common Challenges Related to Effort Reporting • Lack of Accurate & Timely Effort Reporting • Incomplete Effort Distributions • Fixed Price Awards • University Responsibilities • Travel • Institutional Base Salary (IBS) Not Clearly Defined or Consistently Applied

6. What Are the Risks of Non-Compliance with Effort Reporting?

7. Risks • Cost disallowances • Negative headlines in the press • Loss of credibility with Sponsors • Audit findings • F&A Cost Rate reductions • Potential for false claims suits

8. What Can We Do to Facilitate Compliance of an Area Where Risk is Inherent?

9. Recommendation • Establish Realistic Due Dates • Provide Training for Certifiers & Coordinators • Review Effort Reports • To assess the Number of Changes Noted from Payroll Distribution • Review NOGA’s • To Identify Greater than 100% Committed Effort

10. Recommendation • Communicate with Investigators regarding Process of Effort Certification • Ensure Certification & Charging of Committed Cost-Sharing noted in Proposals • Ensure Fixed Price Accounts & University Responsibilities

11. 2nd Hot Issue: Cost Sharing • Are Real Dollars • Costs Must be Allowable • Usually Self Imposed Burden

12. Definition of Cost Sharing • Cost Sharing is that Portion of a Project or Program Costs not Covered by the Sponsor

13. Cost Sharing Could Result From: • Cost Overruns • Salary Cap Excess • Voluntary Committed Costs • Zero Effort

14. Cost Sharing: Impact on Institution • Financial Impact • Redirects Resources • Administrative Impact • Binding Obligation must be monitored, documented & reported • Compliance • Increased Audit Risk

15. Cost Share: Minimizing the Risks • Maintain Adequate Written Policies & Procedures • Identify Cost Sharing in the Accounting System • Cost Share Only When Mandated • Review Proposals Carefully to Eliminate Cost Share Commitments

16. Final Hot Issue: SubRecipient Monitoring What is SubRecipient Monitoring? • The Process that You Use to Provide Oversight of Awards You Make to Other Entities using Federal Dollars • Requirements are Mandated by Federal Regulations

17. Federal Requirements • Prime Grantees Must: • Monitor SubRecipients by Site Visits • Review SubRecipient Audits • Require Records & Financial Statements to be Available to Independent Auditors

18. SubRecipient Monitoring: Minimizing the Risks • Develop Written Policies & Procedures in Accordance with A-133 Circular • Establish Process for Approving Invoices • Review Invoices for Allowability of Costs • Perform Desk Audits for Selected Entities • Develop a Written Monitoring Plan Process • Perform Risk Assessment Prior to Awarding

19. Initiatives That Are Underway • FDP has a Pilot Study Entitled: “Payroll Certification -An Alternative to Effort Reporting” • OMB’s Grants Reform- • Represents a Major Overhaul of the Circulars • COGR Submitted a 100+ Page Response • All Area’s Discussed Will Be Impacted

20. Questions?