OMNI CIRCULAR KEY AREA #1:
TIME AND EFFORT
STEVEN SPILLAN, ESQ.
SSPILLAN@BRUMAN.COM
MIKE BENDER, ESQ.
MBENDER@BRUMAN.COM
BRUSTEIN & MANASEVIT, PLLC
SPRING FORUM 2014
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AGENDA
 Current Time & Effort Rules
 Final Omni Circular
 What’s Next?
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OMB CIRCULARS TIME AND EFFORT RULE
 If federal funds are used for salaries, then time
distribution records are required.
 How staff demonstrate allocability
 If employee paid with federal funds, then must
show that the employee worked on that specific
federal program cost objective.
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WHO MUST PARTICIPATE?
 All employees paid with federal funds!!
 Some employees paid with non-federal
funds
 When salaries are used for match
purposes
 NOT contractors
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DOES “X” EMPLOYEE HAVE TO KEEP TIME
AND EFFORT RECORDS?
Is he an employee?
Yes
No
Is he paid with federal
funds?
No T&E Required
Yes
T&E Required
I don’t know
Ask HR
No
Is his salary used for match?
No
Yes
No T&E Required
T&E Required
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TIME AND EFFORT (CURRENT A-87 RULE)
Semi-Annual Certifications
Personnel Activity Report (PAR)
 If an employee works on a single
 If an employee works on multiple
cost objective:
 After the fact
 Account for the total activity
 Signed by employee or
supervisor
 Every six months (at least
twice a year)
cost objectives:
 After the fact
 Account for total activity
 Signed by employee
 Prepared at least monthly and
coincide with one or more pay
periods
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COST OBJECTIVES
 What is a cost objective?
 “Cost objective” means 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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TIME AND EFFORT GUIDANCE BY OCFO!!!
http://www2.ed.gov/policy/fund/guid/gposbul/time
-and-effort-reporting.html
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OCFO GUIDANCE
 It is possible to work on a single cost objective even if an
employee works on more than one Federal award or on a
Federal award and a non-Federal award.
 The key to determining whether it is a single cost objective
is whether the employee’s salary and wages can be
supported in full from each of the Federal awards on
which the employee is working or from the Federal award
alone if the employee’s salary is also paid with nonFederal funds.
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OCFO GUIDANCE EXAMPLES OF SINGLE
COST OBJECTIVES:
Title I, Part A funds and State compensatory education
funds
 An LEA supports a supplemental math teacher to serve low-
achieving students with 50 percent Title I, Part A funds and 50
percent State compensatory education funds.
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OCFO GUIDANCE EXAMPLES OF SINGLE
COST OBJECTIVES:
Title I, Part A funds and local funds
 An LEA supports an elementary school teacher with local funds but
pays her with Title I, Part A funds to provide after-school tutoring for
low-achieving students.
 Although the teacher could not be paid with Title I, Part A funds to
provide elementary education, the portion of her time spent on afterschool tutoring is easily separated from her teaching position by her
schedule.
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TIME AND EFFORT (CURRENT A-21 RULE)
Plan Confirmation
Budgeted allocations for
professional/professorial staff
 Updated to reflect any significant
changes in actual work




Multiple Confirmation
Records
 Variety of records kept in
combination at least monthly.

After-the-Fact Activity
Reports
Professional/Professorial staff keep
records every six months
All other employees keep monthly
records
Signed by employee, principal
investigator, or responsible official
using suitable means of verification
Must reflect activity applicable to
each sponsored agreement and to
each category needed to identify
F&A costs.
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TIME AND EFFORT (CURRENT A-122 RULE)
Personnel Activity Reports:
 After the fact
 Account for total activity
 Signed by employee or supervisor with first hand
knowledge
 Prepared at least monthly and coincide with one
or more pay periods
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OMNI CIRCULAR:TIME AND EFFORT
DOCUMENTATION 200.430
MOST FLEXIBLE AND MOST CHANGED
RULE
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TIME DISTRIBUTION RECORDS
“STANDARDS FOR DOCUMENTATION OF
PERSONNEL EXPENSES”
 Must be maintained for all employees whose
salaries are:
 Paid in whole or in part with federal funds
200.430 (i)(1)
 Used to meet a match/cost share
requirement 200.430(i)(4)
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COST OBJECTIVES
 What is a cost objective? 200.28 (slightly changed)
• Program, function, activity, award, organizational
subdivision, contract, or work unit for which cost
data are desired and for which provision is made
to accumulate and measure the cost of processes,
products, jobs, capital projects, etc.
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COST OBJECTIVES (CONT)
 Multiple Cost Objectives 200.430(i)(1)(vii):
 More than one Federal award.
 A Federal award and a non-Federal award.
 An indirect cost activity and a direct cost activity.
 Two or more indirect activities that are allocated
using different allocation bases.
 An unallowable activity and a direct or indirect cost
activity
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OCFO Clarifications Re: “single cost
objective”
STILL APPLICABLE EVEN WITH NEW
OMNI CIRCULAR CHANGES!
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OMB A-87
Draft- Super Circular
1. After the fact 1. Budget estimates do
not qualify (after the
fact)
2. Total activity 2. Distribution of charges
for work performed
3. At least
monthly,
coincide with
pay period
4. Signed by
employee
3. Period not to exceed
12 months, may be
integrated with payroll
OIG Comments
Add certification re
federal false claims
act;
Remove
"distribution of
charges" language;
Shorten 12 month
certification period;
4. Signed by employee or Verification by
supervisor
supervisor must
include review of
periodic reports;
5. If compliant, no source Require quarterly
documentation
budget revisions;
Retain A-87 PAR
standards.
Final- Omni Circular
1. Internal controls for
reasonable assurance
charges are accurate
2. Reasonably reflect total
activity (100%)
3. Encompass all activities
(fed and nonfed)
4. Support distribution
among specific activities
5. Official records
6. Established accounting
policies
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NEW: “STANDARDS FOR DOCUMENTATION
OF PERSONNEL EXPENSES” 200.430
 Charges for salaries must be based on records that accurately
reflect the work performed
1. Must be supported by a system of internal controls which
provides reasonable assurance charges are accurate, allowable
and properly allocated
2. Be incorporated into official records
3. Reasonably reflect total activity for which employee is
compensated
 Not to exceed 100%
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NEW: “STANDARDS FOR DOCUMENTATION
OF PERSONNEL EXPENSES” 200.430 (CONT)
4. Encompass all activities (federal and non-federal)
5. Comply with established accounting polices and practices
6. Support distribution among specific activities or cost
objectives
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NEW: “STANDARDS FOR DOCUMENTATION
OF PERSONNEL EXPENSES” 200.430 (CONT)
Compare “reasonably reflect” to current law:
Philadelphia $123 million
Detroit $51 million
Orleans Parish $26 million
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COFAR COMMENTS ON NEW RULE:
By focusing more on internal controls, the rule
“mitigates the risk that a non-Federal entity… will
focus on prescribed procedures... which alone may be
ineffective in assuring full accountability.”
 Uncovering weaknesses in internal controls or
instances of fraud is goal. Not audit findings.
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NEW: “STANDARDS FOR DOCUMENTATION
OF PERSONNEL EXPENSES” 200.430 (CONT)
 Budget estimates alone do not qualify as support for
charges to Federal awards 200.430(i)(1)(viii)
 Percentages may be used for distribution of total
activities 200.430(i)(1)(ix)
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NEW: “STANDARDS FOR DOCUMENTATION
OF PERSONNEL EXPENSES” 200.430 (CONT)
 Grantees encouraged to adopt “substitute systems” if
approved by cognizant agency for indirect cost
200.430(i)(5)
 Acceptable to allocate sampled employees’
supervisors, clerical and support staffs, based on
results of sampled employees
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NEW: “STANDARDS FOR DOCUMENTATION
OF PERSONNEL EXPENSES” 200.430 (CONT)
 If records meet the standards: the non-federal entity
will NOT be required to provide additional
support or documentation for the work performed
(200.430(i)(2))
 BUT, if “records” of grantee do not meet new
standards, ED may require PARs (200.430(i)(8))
 PARs are not defined!!
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WHAT’S NEXT?
 Changes/clarifications in 2014 Compliance Supplement
(April 2014*)
 Federal Agencies have until Dec. 26, 2014 to finalize
conforming regulations (draft due June 26, 2014)
 Agencies must get OMB approval if they want to
promulgate more restrictive rules
 OMB approval is NOT required if agency simply
“clarifies” OMB rules
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EFFECTIVE DATE
 Administrative requirements and cost principles will
apply to new awards and to additional funding (funding
increments) to existing awards made after Dec 26, 2014.
 Existing Federal awards will continue to be governed by
the terms and conditions of the Federal award.
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AGENCY REGULATIONS
 Two theories on agency regulations:
 Agencies will simply adopt corresponding omni
circular language
 Agencies will draft own regulations, with possible
changes or interpretations
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SO WHAT DOES ALL THIS MEAN??
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Disclaimer
This presentation is intended solely to provide
general information and does not constitute
legal advice. Attendance at the presentation or
later review of these printed materials does not
create an attorney-client relationship with
Brustein & Manasevit, PLLC. You should not
take any action based upon any information in
this presentation without first consulting legal
counsel familiar with your particular
circumstances.
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