FDP PAYROLL CERTIFICATION PILOT
UPDATE
NACCA CONFERENCE
October 15, 2015
PAYROLL CERTIFICATION PILOT UPDATE
PILOT GOALS
• Improve oversight over direct salary/wage charges to
federal awards by simplifying the salary certification
process for federal awards
• Enable universities to focus resources toward the
efficient and effective oversight of federal awards.
The goals aligned with the FDP Mission and focus of
Phase V, which is to improve the productivity of research
without compromising its stewardship through pilots
that enable the PI to spend more time on research.
PAYROLL CERTIFICATION PILOT UPDATE
EFFORT REPORTING VS. PAYROLL CERTIFICATION
Description
Effort Reports
Payroll Certification Pilot
Certification focus
Individuals
Grant/Contract (award)
Certification Cycle
Academic semesters or
semi/annual fiscal periods
End of each award budget year
(every 12 mos.) and at the end
of the award
Approver
Individual or PI
PI
Confirmation focus
Individual’s percentage of
effort is reasonable based on
overall effort
All salaries/wages directly
charged to the award are
reasonable based on work
performed
Type of funds
All sponsored funds
Federal funds
PAYROLL CERTIFICATION PILOT UPDATE
EFFORT REPORTING VS. PAYROLL CERTIFICATION
(approx)
Individual project Payroll
Certification Reports
George Mason Univ.
2,700 / yr
700 / yr
Michigan Tech Univ.
6,700 / yr
700 / yr
Univ. of CA - Irvine
10,500 / yr
1,400 / yr
Univ. of CA - Riverside
5,058 / yr.
752 / yr
University
Individual Effort Reports
(approx)
PAYROLL CERTIFICATION PILOT UPDATE
ACHIEVEMENTS AT PILOT INSTITUTIONS
• Improved PI oversight of direct salary/wage charges
to federal awards because the review is aligned with
the award annual financial reporting and budget
cycles.
• Enhanced efficiency by certifying all direct
salary/wages charged to an award instead of
certifying individual employee charges.
– Significant reduction in certification volume
– Significant improvement in timely certifications
– Simplified process reduces administrative burdensome for PIs,
departments and central offices
PAYROLL CERTIFICATION PILOT UPDATE
AUDIT UPDATE
• UC Irvine:
– Report issued December 2014
– DHHS IG did not express an opinion regarding the payroll
certification process
• UC Riverside: DHHS IG draft report pending
• Tentative Date for issuance – Fall 2015
• George Mason: NSF IG Final Report Issued – Aug 2015
• Michigan Tech: NSF IG Final Report Issued – Sep 2015
PAYROLL CERTIFICATION PILOT UPDATE
NSF IG FINDING - GMU:
1) Enforce its written policies for the pilot payroll certification system. Areas
needing enforcement include:
a)
b)
c)
Ensuring that annual SPPERs are completed and returned in a timely manner.
Ensuring that costs associated with late SPPERs are transferred to non-sponsored
accounts.
Ensuring that bimonthly reconciliations are completed and returned in a timely
manner
GMU RESPONSE:
• The late reports referenced in the report were related to pilot implementation
issues that were corrected once identified
• Payroll certification report distribution delayed during university closings
(winter break), times of heavy workload, competing priorities and staff leave
PAYROLL CERTIFICATION PILOT UPDATE
NSF IG FINDING - GMU:
2) Enhance internal controls over information technology
GMU RESPONSE:
• New CIO hired in December 2013 with an organizational restructuring in
February 2015
• Information Technology Governance Group formed to review IT projects and
priorities with the IT Security Office closely involved in the process
• A two-factor authentication project is underway. It has been implemented for
Systems Engineers and will be expanded to all Internet Native Banner users.
• All other findings have been addressed or are in process of being addressed
and risk assessments are current
PAYROLL CERTIFICATION PILOT UPDATE
NSF IG CONCLUSION – GMU AUDIT:
•
Meets requirements of OMB Circular A-21
•
Issues identified “not as a result of inadequate design of pilot system controls”
•
Strong internal controls are important to ensure payroll charges are adequately supported
•
Having direct visibility to full payroll allocation “could be an important control”
•
Less frequent certification requires diligence in communicating and adhering to control procedures
GMU CONCLUSION:
•
We do not feel that late certification is an issue; the programming and procedural implementation issues
impacting report distribution for a small number of projects have been addressed
•
No findings or errors with funding change forms
•
No substantive unallowable costs identified
•
Unclear what caused the suggestion that full payroll allocations available to PIs would be useful to
ensure accuracy
•
Resources will continue to focus on the payroll distribution process and bimonthly reconciliation
•
IT security has been and will continue to be an area of importance and focus for George Mason
•
Payroll Certification has helped us to reduce administrative burden with improved oversight
•
George Mason plans to continue using Payroll Certification
PAYROLL CERTIFICATION PILOT
NEXT STEPS FOR GMU
• Audit Resolution for GMU Audit
– NSF will proceed with normal/routine audit resolution process
• ONR will issue GMU notice of completion
– The pilot successfully demonstrated its goals
– No significant audit issues with concept
– Payroll certification method is acceptable under 2 CFR
200
PAYROLL CERTIFICATION PILOT
NEXT STEPS FOR FDP
• GMU Audit provides both FDP member and nonFDP institutions helpful insight on
implementation at your institution
• Payroll Certification is permitted under 2 CFR 200
– Approval from the cognizant agency is NOT required
– Guidance on internal controls should be considered
in your implementation
PAYROLL CERTIFICATION PILOT
NEXT STEPS FOR FDP
• 2 Remaining Audits will be reviewed by FDP upon
receipt
– Michigan Technological University
– University of California, Riverside
Sept 2015
Fall 2015?
• Capstone Report
– Will present “overall results”
– Summarize “issues identified at all four universities”
– FDP will review the Capstone report upon receipt
PROCUREMENT WORKING GROUP
Consolidated data based on three year average
Data is based on the average numbers for FY 12, FY13, and FY14
•
•
•
•
•
•
•
Range
# of transactions
$ of transactions
$0-2,999
$3,000-4,999
$5,000-9,999
$10,000-14,999
$15,000-24,999
$25,000-49,999
$50,000-74,999
$75,000-99,999
$100,000-149,999
$150,000+
52.40%
45.25%
1.05%
0.36%
0.33%
0.28%
0.10%
0.06%
0.06%
0.12%
14.01%
12.73%
4.68%
3.02%
4.44%
6.58%
3.96%
3.11%
4.18%
43.30%
Number of Participants: 55
Cumulative Federal Awards for Participants - $13,212,291,665
Number of transactions associated with the perc. - 22,285,684
Procurement dollars associated with the perc. - $30,326,755,937
Procurement FTE - 872.1
Estimated Increase in procurement FTE due to UG - 164.35
Percent increase in FTE - 18.8%
PROCUREMENT WORKING GROUP