Oversight, Analysis & Reporting

 VP for Research

 Sponsored Projects  Administration

 Sponsored Financial Reporting

 UM Policy Library

 Purchasing Services

 Training Services

 Controller's Office

 UM Home

 GMUN

 FFN

 EGMS

 RSPP

 Data Warehouse

 Financial One Stop

Certified Approver Question & Answer Series

(EFS-related questions)

CA Question & Answer Series - Certified Approvers' roles moving forward

Question:  The role of the CA changing as sponsored EFS is unfolding. What training will be provided for CAs and when will it occur? Will there be a forum where we can ask questions and get clarifications on the changing policies?

Answer:  OAR has been working with the EFS team on a CA tutorial which should be released soon. We'll be certain everyone gets notified. In the interim, please visit the revised policies page for additional information.

CA Question & Answer Series - Maintaining paper copies in an electonic world

Question:   In the paperless world of EFS, what paper documentation of financial transactions are units recommended or required to maintain on file locally? Are there best practices for internal and external audit purposes?

Answer:  Anything that cannot be maintained and accessed electronically to provide validation for transactions will need to be maintained in paper files. This will be the case for CA approved transactions as well as audit purposes.

Certified Approver Question & Answer Series

(legacy systems-related questions)

Article of Interest: Beyond the A-133 Audit: Expanding the Focus

Auditors are increasingly reviewing the detail behind the institutional forms or signature requirements and requesting proof of award-specific approvals and procedures that show knowledge of and compliance with the grant terms and condition. Auditors are going beyond the normal, general financial system requirements and are wanting to validate in-depth understanding and compliance with award terms, on a transaction-by-transaction basis.

Read the complete article at this link: NCURA_Article

CA Question & Answer Series - Hints on answering the questions on a CPS

Question:  When processing a Contract for Professional Service in Forms Nirvana, how do I determine the answer to the following question relating to sponsored projects:

"If sponsored funds will be used to pay for this service, is the work to be performed a portion of the programmatic activities for the sponsored project?"

Answer:

Examples of when the question is answered No.

• Is the CPS made out to an individual? 
• Is the service being provided part of the vendors normal business ?
• Does the vendor provide these services or goods to many different customers?
• Does the vendor have a price list, catalog, operates in a competitive market?
• Is the service being provided a speaking fee, honorarium?
  
  

Examples of when the question is answered Yes.

• In the proposal they provided a separate budget, budget justification and agreed to comply with Sponsoring agencies terms and conditions. If so, answer yes.
• The vendor is responsible for programmatic decision making relating to their portion of the work.  If so, answer yes.
• Does the vendor need to comply with sponsor requirements (IRB, IACUC, rebudgeting, IP restrictions, etc..)  If so, answer yes.

    In these instances establishing a subcontract is the correct process for continuing with payment.

Question: On a multi-line document including sponsored expenses for more than one area, is it true that one CA can approve the entire document?

Answer: Yes, Financial Forms Nirvana will allow this action, HOWEVER, approval of an unallowable expense on a sponsored project is in violation of OMB Circular A-21. CA approval of transactions where the CA has insufficient knowledge of the project also violates U of M Approvals Policy 3.9 and the CA Roles & Responsibilities. When approving documents, Certified Approvers are "attesting" that the individual transactions are allowable on the project(s) and compliant with the relevant University policies and external sponsor regulations.

To ensure each transaction is allowable on the project and being approved appropriately, the following best practices guidelines are suggested. The immediate benefit of this best practice is assurance that charges are being correctly applied and approved.

1. Prepare document limiting the number of different AREAS to three (3). This is necessary as FFN has an upper limit of three (3) approvers. (This routing limitation is being addressed for the new financial system.)
2. In the FFN approver fields, enter the CAs for the appropriate AREAs so the document is routed appropriately. A list of CAs by AREA is found on the CA webpage (www.oar.umn.edu/CA/).
3. When approving, each CA should add a statement identifying the debit/credit lines being approved and, if needed, justification as outlined in the Document Justification job aid.

Question: If an employee is on travel status and traveling on sponsored funds, is a personal phone call home an allowable expense?

Answer: It depends first on allowability of travel by sponsor and then on the discretion of the department/college.

In order to answer the question, OAR, Audits, and SPA reviewed existing language in Federal and University policy.

For Federal projects, OMB Circular A-21, Section J48a states, "Travel costs are the expenses for transportation, lodging, subsistence, and related items incurred by employees who are in travel status on official business of the institution. Such costs may be charged ...in accordance with the institution's travel policy and practices consistently applied to all institutional travel activities".

University policy 3.8.3 states, “An individual traveling on University business should neither gain nor lose personal funds as a result of that travel. Employee reimbursements must … clearly indicate prudent use of public funds”. Telephone calls for University business are considered reimbursable and other calls are at the department’s discretion.

Important Note: University policy can be more restrictive (not less) than a sponsor. If a sponsor does not allow travel, University policy cannot be less restrictive by allowing such costs (phone calls, lodging, etc).

What is the proper documentation for travel costs? Expense justification explaining who is traveling, what is the purpose of the travel, where, when, why travel is necessary and how the travel benefits/relate to the CUFS account charged, must be included on the document.

Policy References:
Policy 3.8.3 -Traveling on University Business
http://www.fpd.finop.umn.edu/groups/ppd/documents/policy/Travel.cfm
Appendix I: Reimbursable/Non-reimbursable Expenses
http://www.fpd.finop.umn.edu/groups/ppd/documents/appendix/TravelAppI.cfm
OMB Circular A-21 http://www.whitehouse.gov/omb/circulars/a021/a021.html

Question: How much time must lapse before a former University of Minnesota employee can be paid as a contractor?

Answer: Karen Klein of HRMS responded to this question by stating, "There is no set number of months where a former employee could suddenly then be paid as a contractor." The question posed on the CFPS worksheet reviewed by payroll specifies the current calendar year. The reasoning for this is based upon the IRS 20 common law factors and the potential for an IRS audit. The IRS would view an individual who receives a W-2 and a 1099-M from the University in the same calendar (tax) year as a flag worthy of an audit.

The flow sheet on the CFPS-Purchasing a Professional Service website was designed to be a guideline for this process. It does not supercede the worksheet. It is not meant to suggest that anyone who has not worked as an employee at the University in the last 12 months should automatically be hired as a contractor or that anyone who has worked at the University in the last 12 months should automatically be placed on payroll. It is meant as a reminder that the individual’s employment history has bearing in the process.

Therefore both sources are accurate. While the employment history of the individual should be considered as the purchasing flow sheet instructs, the worksheet question should be answered as literally as it is posed. The box should be checked yes if the individual has worked at the University in the last calendar year. Whenever you have any questions in regard to the status of the individual, please contact payroll for further clarification. For more information, see the Guide to the Worksheet for Consulting and Professional Services at http://www1.umn.edu/ohr/payroll/CFPSworksheetguide.pdf

Question: From A-110, section 23, it is clear that universities may claim as Cost Sharing/Match any "Unrecovered Indirect Costs" resulting from cases in which federal sponsors award Indirect Cost Rates at less than the institution's federally negotiated rates, with prior sponsor approval. However, can institutions also apply this "Unrecovered Indirect Cost" rule to direct costs for Cost Share/Match from non-sponsored/institutional accounts?

Answer: The same indirect cost rate should be applied to both the government-funded portion of the project and the university-funded portion.

Most federal agencies that place restrictions on indirect cost recovery do not permit grantees to use the "unrecovered indirect costs" to meet cost sharing requirements. You should be extremely careful about documenting sponsor approval to do this. If you intend to use these types of costs to meet a cost share/matching commitment, you should reflect this in your proposal. A mini-budget showing the details of how the cost share/match will be met should be provided along with the verbal explanation.

Remember, the sponsor must specifically give approval to do this.

Look here http://www.oar.umn.edu/CA/Unrecovered_Indirect_Costs.cfm for three examples compiled by Steve Bradley and Chris Larson, SPA.

Question: Is approval/justification required on a Travel Reimbursement form (ETR/TP) even though this has already been documented and received previously on a CUFS TA form?

Can we not use the same process as we do with the PO/PV transactions where if approvals are received on the PO, no additional approvals are needed on the PV transaction?

Answer: No to the latter question. Yes, you are required to receive approval and provide justification both when arranging travel and at the time travel is reimbursed.

Why is travel treated different? IRS regulations require that "travel expenses must be supported by adequate contemporaneous documentation". Essentially, this means that travel expense documentation must be of the actual expenses incurred (not projected). If our procedures do not comply with the requirements, University travel reimbursements to employees do not qualify as a legitimate University business expenses for IRS purposes.

In summary, with both arranging and reimbursing our travel, it is necessary to have more stringent controls over our travel process.

Important policy references: Arranging Travel 3.8.3.1 and Travel Reimbursement 3.8.3.2

Question:   During our 10/3/01 meeting with Mark Bohnhorst, concern was expressed that HSAs were not receiving any approvals in Peoplesoft. This was seen as a significant risk because HSAs adjust effort/payroll, the largest expenditure on most sponsored projects. Should CAs be approving these transactions?

Answer:  The first part of the answer addressing this issue comes directly from the CA Approvals and Routing Grid:

"Approvals should follow procedures outlined in Training Services materials. All salary cost transfers attempting to post charges to sponsored accounts after Effort Certification are systematically forwarded to SPA, which approves only adjustments involving very extenuating circumstances that are fully documented and justified. For details please refer to Cost Transfer Policy."

That said, and after discussions with Training Services, Internal Audit Managers, and SPA/Effort, it was determined that adequate controls exist for HSA transactions. The high risk HSA transactions are receiving an approval by the most appropriate unit, the SPA/Effort unit. Adding approvals will slow this process down and potentially create a situation where we are in violation of our cost transfer policy. Therefore, it is not recommended that additional CA approvals be added.

The critical control point for departmental approvals on any sponsored project payroll transaction (adjustment or direct charge) is our effort certification statement signatures. Our effort statements should accurately reflect the payroll charged and NOT be signed if errors exist.

If a situation exists where the payroll individuals are making errors or are simply just new University employees, we recommend that additional monitoring be put in place to assure accuracy. This monitoring can be done though periodic review of existing payroll reports or review of work before data entry occurs. We hope that if errors continue, the individual is either given additional training or the entry is assigned elsewhere. Everyone agreed that these transactions are high priority and trust that the entry is being done by individuals that understand the importance of their responsibility.