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Navigating Effort Reporting, Cost Sharing, and SubRecipient Monitoring in Federal Grants

This presentation by Velma Stamp, Director of Grants and Contracts Accounting at the Medical University of South Carolina, addresses critical issues in effort reporting, cost sharing, and subrecipient monitoring under increasing scrutiny. Key topics include validation of salary charges, common challenges like PI commitment over 100% and NIH salary caps, compliance risks, and strategies for effective monitoring. The session provides practical recommendations and insights to ensure compliance, minimize risks, and enhance the management of federal grants.

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Navigating Effort Reporting, Cost Sharing, and SubRecipient Monitoring in Federal Grants

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Presentation Transcript

  1. Hot Topics Update • Effort Reporting • Cost Sharing • SubRecipient Monitoring Presented by Velma Stamp, Director, Grants and Contracts Accounting University Purchasing Medical University of South Carolina

  2. The Hottest Issue: Effort Reporting Under Increased Awareness & Scrutiny Why? • The Process is Used to Validate Salary Charges • Salary is the Most Significant Line Item of an Award

  3. Common Challenges Related to Effort Reporting • PI Commitment Greater than 100% of Effort • Nine vs. Twelve Month Appointments • Faculty not Meeting K-Award Effort Commitments of 75% • Re-budgeting Without Sponsor Approval • Committed Cost-Sharing not Reported

  4. Common Challenges Related to Effort Reporting • NIH Salary Cap • Effort Certified by Individual not Familiar with Faculty Activities • Cost Transfer Significance • Cost transfers not Incorporated into Certification or Made after Certification • All Activities not Considered

  5. Common Challenges Related to Effort Reporting • Lack of Accurate & Timely Effort Reporting • Incomplete Effort Distributions • Fixed Price Awards • University Responsibilities • Travel • Institutional Base Salary (IBS) Not Clearly Defined or Consistently Applied

  6. What Are the Risks of Non-Compliance with Effort Reporting?

  7. Risks • Cost disallowances • Negative headlines in the press • Loss of credibility with Sponsors • Audit findings • F&A Cost Rate reductions • Potential for false claims suits

  8. What Can We Do to Facilitate Compliance of an Area Where Risk is Inherent?

  9. Recommendation • Establish Realistic Due Dates • Provide Training for Certifiers & Coordinators • Review Effort Reports • To assess the Number of Changes Noted from Payroll Distribution • Review NOGA’s • To Identify Greater than 100% Committed Effort

  10. Recommendation • Communicate with Investigators regarding Process of Effort Certification • Ensure Certification & Charging of Committed Cost-Sharing noted in Proposals • Ensure Fixed Price Accounts & University Responsibilities

  11. 2nd Hot Issue: Cost Sharing • Are Real Dollars • Costs Must be Allowable • Usually Self Imposed Burden

  12. Definition of Cost Sharing • Cost Sharing is that Portion of a Project or Program Costs not Covered by the Sponsor

  13. Cost Sharing Could Result From: • Cost Overruns • Salary Cap Excess • Voluntary Committed Costs • Zero Effort

  14. Cost Sharing: Impact on Institution • Financial Impact • Redirects Resources • Administrative Impact • Binding Obligation must be monitored, documented & reported • Compliance • Increased Audit Risk

  15. Cost Share: Minimizing the Risks • Maintain Adequate Written Policies & Procedures • Identify Cost Sharing in the Accounting System • Cost Share Only When Mandated • Review Proposals Carefully to Eliminate Cost Share Commitments

  16. Final Hot Issue: SubRecipient Monitoring What is SubRecipient Monitoring? • The Process that You Use to Provide Oversight of Awards You Make to Other Entities using Federal Dollars • Requirements are Mandated by Federal Regulations

  17. Federal Requirements • Prime Grantees Must: • Monitor SubRecipients by Site Visits • Review SubRecipient Audits • Require Records & Financial Statements to be Available to Independent Auditors

  18. SubRecipient Monitoring: Minimizing the Risks • Develop Written Policies & Procedures in Accordance with A-133 Circular • Establish Process for Approving Invoices • Review Invoices for Allowability of Costs • Perform Desk Audits for Selected Entities • Develop a Written Monitoring Plan Process • Perform Risk Assessment Prior to Awarding

  19. Initiatives That Are Underway • FDP has a Pilot Study Entitled: “Payroll Certification -An Alternative to Effort Reporting” • OMB’s Grants Reform- • Represents a Major Overhaul of the Circulars • COGR Submitted a 100+ Page Response • All Area’s Discussed Will Be Impacted

  20. Questions?

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