New Federal Time Accounting Guidance

Transcription

1 New Federal Time Accounting Guidance CCSESA CBO Conference February 2013 Presented by Peggy O Guin, CPA California Department of Education School Fiscal Services Division Topics & Scope Changes to time accounting requirements allowed by USDE s September 7, 2012 guidance Substitute Systems in general Currently approved substitute system Newly approved substitute system CDE s implementation guidance 2 1

2 Topics & Scope, continued Time accounting requirements that have not changed Personnel Activity Reports (PARs) Or equivalent documentation Legal loopholes and exceptions to rules Ways to make time accounting a little easier 3 Substitute Systems in General General rule: OMB Circular A-87 requires time accounting for salaries and wages charged to federal programs Employees who work on a single cost objective must do at least a semi-annual certification (more on Cost Objectives later) Employees who work on multiple cost objectives must do a detailed Personnel Activity Report (PAR) or equivalent documentation 4 2

3 Substitute Systems in General Exception to the rule: OMB Circular A-87 allows for "Substitute Systems in place of PARs OMB A-87, Attachment B, Section 8 (h) (6) (in handout) Subject to feds approval Examples: Random moment sampling, case counts, or other quantifiable measures of employee effort 5 CDE s s Currently Approved System CDE has had an approved substitute system since 1998 Described in California School Accounting Manual (CSAM) Procedure 905 Uses sampling methods that meet statistical sampling standards Designed to simplify recordkeeping for LEAs Optional; LEAs choose whether to use 6 3

4 CDE s s Currently Approved System Features of current system (CSAM p ): Alternative to monthly PARS First year: Employees do PARs every 4 th month (3 times per year note sampling concept) These PARS are used to true up charges for previous months & to estimate charges for upcoming months If PARS show deviation from budgeted charges greater than 10%, LEA adjusts charges quarterly If PARS show deviation from budgeted charges of less than 10%, LEA may adjust charges annually 7 CDE s s Currently Approved System Features of current system: Important rules (CSAM p ): All aspects of the system must be implemented in accordance with the guidelines All employees who would otherwise complete PARs must participate in the substitute system Employees who work on a single cost objective must not participate because their data would distort the aggregate results For current system, no further approval required from CDE for LEAs to implement 8 4

5 Newly Approved System Features of new system: Authorized by USDE in Sept 7, 2012 letter Part of USDE s effort to lessen the burden of time-and-effort reporting (while still achieving its objective) For employees who work in multiple cost objectives, on a predetermined or fixed schedule, who would otherwise do a PAR 9 Newly Approved System Features of new system, continued: Instead of monthly PARs, employee could do semi-annual certification using predetermined written schedule as support 10 5

6 Newly Approved System Features of new system, continued: Written schedule must: Indicate the specific activity or cost objective for each segment of the schedule Account for total hours for which employee is paid Be certified at least semi-annually & signed by employee AND supervisory official having first-hand knowledge Revisions to established schedule that continue for a prolonged period must be documented & certified Significant deviations from established schedule require that employee revert to a PAR for that period 11 Newly Approved System Features of new system, continued: New system is retroactive for LEAs to July 1, 2012 (!) Requires CDE to have a role in establishing: CDE must obtain a management certification from LEAs who want to use the system CDE must define significant deviation from an employee's established schedule that would warrant an individual reverting to a personnel activity report USDE s letter in handout (Attachment A) 12 6

7 Newly Approved System CDE s implementation guidance: CDE thought hard about how to implement Our goal: To achieve simplification for LEAs, while meeting monitoring & auditing needs for CDE Our consideration took some twists & turns Including a few 2 steps back We benefitted much from categorical program directors feedback 13 Newly Approved System CDE s implementation guidance: We are adding the management certification to the Consolidated Application Our rationale: Con App is a logical context to collect a certification that relates to multiple programs There is precedent for including LEA certifications in the Con App Although the requirement is silent as to how often CDE is expected to collect the management certification, using the Con App forces LEAs to provide it annually due diligence for CDE, & addresses concern about LEA staff turnover Timing is good - LEAs make election at the beginning of the 14 fiscal year in which they will use the substitute system 7

8 Newly Approved System The Con App will look something like this: a) If an LEA checks "Yes" to a statement saying, "We want authorization to use the new substitute system," then b) The LEA checks "Yes" to the statement, "I certify that only eligible employees will participate in the substitute system" c) The LEA then checks "Yes" to the statement, "I certify that the system used to document employee work schedules includes sufficient controls to ensure that the schedules are accurate" 15 Newly Approved System The Con App will look something like this: d) The LEA then checks "Yes" to the statement, "I certify that the following is a full disclosure of any known deficiencies with the system or known challenges with implementing the substitute system," and inputs their description of whatever deficiencies or challenges they foresee e) The description field is required, meaning the LEA must provide a description of some kind 16 8

9 Newly Approved System The Con App will look something like this: Every LEA will see the Substitute system for time accounting option But only LEAs who want to use the system have to select it 17 Newly Approved System CDE s implementation guidance, continued: Definition of significant deviation from established schedule that would warrant an individual reverting to a PAR for the period: An unplanned, unforeseen, infrequent, deviation of less than 5% of the established schedule is not a significant deviation The 5% measure applies daily, not monthly or annually Note that if a deviation tends to happen pretty frequently, probably it cannot be characterized as unforeseen 18 9

10 Newly Approved System Some questions and answers: Q: Will this replace the currently approved substitute system? A: No, we will keep the existing system. However, since the current system requires that ALL employees who would otherwise do a PAR must participate, effectively the LEA may use the current system or the new system but not both. The reason for the all of nothing nature of the current system is that the sample size must meet statistical sampling standards The fewer employees using the sampling method, the less representative the sample becomes 19 Newly Approved System Some questions and answers: Q: Can an employee whose fixed schedule changes mid-year, for example at the start of a new semester, use the new system? A: Yes. As long as the written schedule is fixed in advance, and budgetary charges are adjusted to reflect schedule changes, the employee can use the system. Note that a periodic certification must be done at least semi-annually but it could be done more often, each trimester for example. Keeping in mind that periodic certifications must 20 coincide with one or more pay periods. 10

11 Newly Approved System Some questions and answers: Q: In which version of the Con App will this appear each year? A: In the spring release, effective for the upcoming fiscal year. Example: The spring 2013 release will contain certification and approval for One-time for : Since the new guidance was effective retro to July 1, 2012, the spring 2013 release will also contain a retro certification and approval for Newly Approved System Some questions and answers: Q: How is this being disseminated to LEAs? A: CDE brought proposed guidance to categorical program directors in January for feedback. We are now communicating the finalized guidance to LEA business groups. Look for updates to CSAM Procedure 905, and probably a CDE letter

12 Newly Approved System Some questions and answers: Q: How is approval granted? A: Current system: No further approval is needed when LEA implements exactly as described in CSAM Procedure 905. New system: Approval is automatically granted when LEA provides required certifications in the Con App (Con App will contain a statement to this effect). 23 Newly Approved System Some questions and answers: Q: In a large LEA whose offices are very spread out, how does CDE determine who has the authority to provide the management certification? A: CDE assumes that whomever assigns Con App user roles at the LEA level is entrusted to assign access only to persons with the appropriate authority (including delegated authority). CDE will rely on this same assumption for the management certification

13 Newly Approved System Some questions and answers: Q: For an employee s fixed schedule to serve as support for a semi-annual certification, what level of detail must it contain? A: It must show the specific cost objectives on which the employee works. Bad example: Employee works in the classroom from 8:00 to 3:30 every day. Better example: Employee provides Special Education instruction from 8:00 to 12:00, and provides Title I services to targeted assistance pupils from 1:00 to 3:30 every day. Best example: See Attachment A, page Newly Approved System Next Steps: Look for new Con App functionality in spring 2013 It may not look EXACTLY as described today we begin the design phase shortly Look for updated CSAM Procedure 905; we are drafting revisions now Training, training, training for procedures to work well, people must understand them well 26 13

14 Time Accounting: Requirements That Have Not Changed The basic fact of life (like death and taxes): Employee compensation costs are allowable charges to federal programs But only to the extent that they are supported as provided in OMB Circular A-87, Attachment B, Item 8.h (in handout) 27 Time Accounting: Requirements That Have Not Changed Guiding principle: The number of cost objectives on which an employee works is the determining factor for how federal time documentation requirements can be satisfied Employees who work on a single cost objective may prepare a periodic certification (at least semiannually) Employees who work on multiple cost objectives must prepare a monthly personnel activity report Or equivalent documentation Or use a substitute system, as discussed previously 28 14

15 Time Accounting: Requirements That Have Not Changed The cost objective is the key to it all In practical terms, a cost objective is a set of work activities allowable under the terms and conditions of a particular funding source Multiple funding sources may address a common objective The most significant factor is not the number of funding sources supporting the salary, but rather the activity being performed 29 Time Accounting: Requirements That Have Not Changed The Single Cost Objective A set of work activities may be considered a single cost objective when both the services being performed, and the populations being served, are allowable under any of the funding sources supporting the cost objective Said another way: Costs allocable to that cost objective must be allowable under any of the programs that fund the activities 30 15

16 Time Accounting: Requirements That Have Not Changed Example of a Single Cost Objective: A drug prevention counselor or a special education instructional aide, funded by a mix of federal and/or state awards, where the services provided and the populations served are eligible and allowable under any of the awards USDE s letter contains additional examples Note that USDE s clarification of cost 31 objective represents no change to CSAM Time Accounting: Requirements That Have Not Changed The Multiple Cost Objective When an employee works on more than one award and the activities performed may not be considered a single cost objective, the employee is considered to work on multiple cost objectives 32 16

17 Time Accounting: Requirements That Have Not Changed Example of a Multiple Cost Objective: An employee provides similar services all day, but his position is supported by multiple federal awards that have different rules as to the eligibility of participants or allowable costs 33 Time Accounting: Requirements That Have Not Changed To recap what hasn t changed: Some form of time accounting is always required for personnel charged to federal awards Single cost objective: Periodic certification Multiple cost objectives: Personnel Activity Report or equivalent documentation Equivalent documentation must meet the requirements in OMB A-87 Attachment B Item 8.h 34 17

18 Legal Loopholes and Exceptions to Rules Consolidation of NCLB Administrative Funds: The perfectly legal loophole! NCLB allows LEAs to consolidate funds from various NCLB programs for administrative of one or more NCLB programs LEAs that consolidate administrative costs have considerable discretion in how those costs get distributed back to individual programs Consolidated funds may be used for administration of any program included in the consolidation Described in CSAM Legal Loopholes and Exceptions to Rules Consolidation of NCLB Administrative Funds, continued The legal loophole: LEAs do not have to distribute pooled costs back to individual programs in proportion to benefit received by each program Nor in the same ratio that each program contributed to the pool 36 18

19 Legal Loopholes and Exceptions to Rules Example: LEA consolidates Title I and Title IV funds for program administration Total consolidated administration costs: $100,000 Relative benefit from administration costs: Title I program $75,000 Title IV program $25,000 Contribution for administration costs: Title I program $90,000 Title IV program $10, Legal Loopholes and Exceptions to Rules Consolidation of NCLB Administrative Funds: The time-saving strategy! Consolidated administrative funds are treated as one cost objective LEAs are not required to maintain records of administration costs by individual program No personnel activity reports to document time spent for administration of each program Only semiannual certifications are required 38 19

20 Legal Loopholes and Exceptions to Rules Schoolwide Programs: An eligible LEA may use NCLB Title I funds in combination with some or all of its other federal, state, and local general-purpose funds to upgrade the entire educational program in a school Title I, Part A, Subpart 1, Section 1114 The schoolwide program is a single cost objective Employees who work only in that cost objective need only do a semi-annual certification Described in CSAM Procedure 905, page Legal Loopholes and Exceptions to Rules Schoolwide Programs, continued: Additional exception to time accounting requirements for employees who work 100% on a Schoolwide Program (SWP) at a school that has consolidated ALL its funds and programs in its SWP: No time accounting is required whatsoever (!!) Awesome - But do any LEAs really consolidate 100% of their federal, state, and local funds?? See cautionary note in CSAM, p

21 In Summary New substitute system for time accounting is allowed retroactive to July 1, 2012 Substitute systems might bring some relief Legal loopholes and exceptions might bring some relief, too But time accounting remains a fact of life in our world! 41 Questions before we adjourn? 42 21