ED Issues New Flexibility Guidance on Time-and-Effort Reporting

September 12, 2012 | By Thompson Education | Post a Comment

(This guest blog was written by the staff of Brustein & Manasevit, PLLC and ran in Thompson’s education blog Title 1-derland.) At the annual meeting of the Association of Education Federal Financial Administrators (AEFFA) last October in Charleston, Kay Rigling from the Office of General Counsel stated that U.S. Department of Education (ED) would publish a blog post on “Granting Administrative Flexibility for Better Measures of Success” and would seek recommendations on reducing burden on the time and effort requirements under OMB Circular A-87.  Rigling stated that ED was well aware of all the audit exposure generated from the A-87 rules.  So, last Friday, ED’s Office of the Chief Financial Officer (OCFO) issued guidance, retroactive to July 1, 2012, that makes substantive changes to the application of A-87 to the federal education arena.

In our view, the most significant change deals with the confusion over the meaning of “cost objective.”  We have found that on numerous occasions some of the programmatic units at ED sustained audit findings where an employee worked on one function or activity, but was paid from multiple funding sources, such as federal and nonfederal, and failed to maintain monthly personnel activity reports (PARs).  According to this guidance, the grantee would only need to execute semi-annual certifications.  The key to determining if the employee is working on a single cost objective is whether the employee’s salary could be supported in full from each of the federal funding sources on which the employee is working, or from a single federal funding source if the salary is paid from both that source and nonfederal funds.  This is very welcome relief, and will hopefully mean uniform enforcement at ED.

This guidance for the first time also authorizes states to permit local educational agencies (LEAs) to adopt a substitute system for time and effort reporting.  This new flexibility would permit an employee working on multiple cost objectives to execute a semi-annual certification (signed by both the employee AND the supervisor) instead of a monthly PAR if:

  • The employee works on a schedule that includes multiple cost objectives; and
  • The work on those multiple cost objectives is “predetermined” (e.g. a teacher’s lesson plan); and
  • The employee is not permitted to work on different cost objectives at the exact same time on their schedule; and
  • The documentation of the employee’s schedule (which is used in lieu of the PAR) meets the five separate elements set forth in the guidance.

Although the guidance would relieve the need for monthly PARs, many LEAs may not opt for the change because of the five required elements that attach to the employee’s schedule.

The firm will be providing significantly more guidance on these changes at our Fall Forum.



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