NEW ELECTRONIC TIME REPORTING SYSTEM AND EFFORT REPORTING AND OTHER COMPENSATION
Payroll Services developed the electronic time reporting system (TRS) in late calendar 2003 and tested it in some University departments. Since January 2004, the system has become available to the entire University. As a result, more and more departments have benefited from doing their time report forms electronically. With the large number of time reports that are processed, this will be a substantial benefit to the University as a whole. Currently only payroll types 4 and 5 and type 1 for overtime are being processed by the TRS. As further enhancements are developed more payroll types will be added. Eventually all time report transactions for all payroll types could be processed by the TRS.
The TRS has effectively split the processing of time reports from the processing of effort certification. This has created one additional benefit for TRS users for accelerated time reporting at the holidays. In order to meet payroll deadlines for our holidays, we must report estimated hours worked for time report filers. Effort certification, on the other hand, requires that work be certified after the work has been performed. Estimates are not allowed. As a result, special time report processing procedures were developed to account for this. With the separation of the two processes, the special procedures are no longer necessary for TRS users because effort reports can now be certified after the TRS input and after the work is performed. However, non-TRS users still need to follow these procedures - see our web site under Time Report Forms.
While the above benefits are substantial, TRS users should be aware that usingthe TRS does not change or eliminate any of the requirements for Federal Effort Certificationfor those accounts that require effort certification. Alsothe TRS does not change or eliminate the requirements to properly document and approve charges for other compensationon grants and contracts.
EFFORT CERTIFICATION
The reason we have effort certification is that the Federal government wants a clear statement certifying that the work represented by the salary or wage was actually done. (FYI, in OMB Circular A-21, the regulation that requires effort certification, it is referred to as after-the-fact confirmation, confirmation of activity or just confirmation but never by the term everyone uses - effort certification.)
Effort certification is required forALLsalaries and wages on direct and pass-through Federal awards (4-2XXXX accounts). Effort certification is also required on most State of New Jersey (SNJ) direct and pass-through awards because the SNJ generally applies Federal rules to its awards. Very infrequently there are some other sponsors that require effort certification. Cost sharing accounts that support an award that requires effort certification will also require effort certification.
All accounts that require effort certification are given an effort certification attribute in the general ledger when they are set up by the DGCA. You can find out if any account you administer requires effort certification by going into the On-line Financial Information System (OFIS) for the account, then selecting Account Information (AI) and then looking on page two under PAR CODE. If the indicator is Y for yes or C for cost sharing then the account requires effort certification. Alternatively, you can ask your NGO Accountant.
Effort certification is documented in two ways at Rutgers. For full time appointments, effort certification is documented through the semi-annual greenPersonnelActivityCertification (PACE) Reports. That approach is not affected by the TRS. For all others, effort certification is documented via the time report form. Prior to the TRS, the actual time report form acted as both the payroll document and the effort certification document. With the advent of the TRS, the elements of effort certification have not changed, however, the form in which the department documents these may change.
One method to maintain the effort certification information below is to continue using the current paper time report form for both effort reporting and the input into the TRS. Another method is to incorporate the information with the documentation used to support the input into the TRS. A third alternative is to do something similar to what the Federal Work Study Program does. To see the third alternative go to and click on Federal Work Study Program and then click on FWSP Requirements for Departments Using Automated Payroll System. What you do should be guided by the number of accounts and individuals that need effort certification versus those that don't and what is most appropriate for your department, center or institute. Regardless of method used all of the below information must be maintained or incorporated into the documentation.
Below are the essential elements of effort certification that have to be maintained by the department for each individual in addition to the TRS input. Each bi-weekly payroll charge requiring effort certification is subject to internal and external audit. Please keep in mind that effort certification is one of the first things checked in a normal audit and any sponsor disallowances due to an improper or incomplete effort report is solely the responsibility of the department.
1. Individual Identification Information
First & Last Name
Social Security Number
Department Name
RIAS Org Code
Payroll Location Code
2. Payroll Information
Payroll Type
Regular Payroll Rate per hour or per day for non-hourly employees
Actual hours by specific calendar day(s) or calendar day(s) worked for non-hourly employees -This must reasonably reflect the activity for which the employee is paid.
Amount Paid
3. Account(s) Charged
Account number(s)
Explanation of charges - Why was the account charged? What specifically was this person hired to do and how does it benefit this award?
4. Certification
Certification Statement - Must include the following: "I confirm that the above distribution of salaries and wages directly charged to Sponsored Agreements/Programs is appropriate and reasonable in relationship to the work performed."
Certification Signature - This must be the individual getting paid or someone with direct knowledge or a suitable means of verifying that the work was performed. A subordinate of the individual getting paid canNOT certify the effort. Also a business or administrative person without the technical knowledge of the project and direct knowledge of the actual hours worked canNOT certify the effort.
Certification Date - This must be after the work is performed.
OTHER COMPENSATION
Other compensation rules apply to all grant and contract accounts not just those subject to effort certification.Currently, relatively few time reports for other compensation are processed by the TRS, however, that may change. Other compensation is to pay individuals working outside the scope or period of their regular appointment. Thus a clear explanation for the payment is needed. The explanation should answer the question an auditor would ask, namely, "What specifically was the person hired to do and how does it benefit the award?" Short phrases like "Extra Pay" and "Summer Lab Work" are insufficient. There is also a special procedure that should be adhered to for Faculty Other Compensation. Both of these topics can be viewed on our web site by clicking on "Topics & References" then either "Other Pay Documentation" or "Faculty Extra Compensation and Other Pay." Once on the latter web page, for the actual Faculty Other Compensation procedure click on the link at the bottom of the article.
AUDITS
Since the TRS does not allow prescreening of the time reports to insure the above requirements are adhered to, the DGCA PACE Unit will conduct after-the-fact statistical audits to measure and insure compliance. The PACE Unit conducted a non-statistical audit in late 2004 and discovered many departments had failed to maintain the appropriate records for effort certification. We ask your cooperation in adhering to the Effort Certification and Other Compensation rules and requirements because the NGO Grant Accountant is not reviewing your documents before the individual is paid.
Issued 5/13/05