EnforcementofFederalGrantAccounting-Higher.docVIP

NACUA Fall Workshop November 15-17, 2006 Legal Issues in Higher Education Sponsored Research, Compliance and Technology Transfer 07B. Enforcement of Federal Grant Accounting: The Financial and Administrative Perspective David Kennedy, Director of Cost Policy dkennedy@cogr.edu Council on Governmental Relations (COGR) Washington, DC The recent False Claims Act (FCA) cases and findings by various Offices of Inspectors General (OIG), as discussed in Bob Kenney’s paper, have focused on a number of common issues. This section provides a technical discussion of the common issues, and addresses several other topics that have the potential to create audit and financial risk for an institution. A. Effort Reporting Effort reporting is the mechanism to confirm that the salaries and wages charged to each sponsored agreement are reasonable in relation to the actual work performed, and has been the focal point of many of recent FCA cases and OIG audit findings. Certification of an effort report must reasonably reflect the activity for which the employee is compensated by the institution. Cost sharing commitments must also be confirmed, either through the effort report, or through some other reporting mechanism. (Note: some institutions do not use the term “effort reporting,” however, these institutions are still required to do the same confirmations. Effort reporting is used as the standard term throughout this section). Office of Management and Budget (OMB) Circular A-21 contain the federal regulations concerning effort reporting. The regulations do not prescribe a standard method for providing the required assurances, but they do identify specific criteria for an acceptable method and provide examples of acceptable methods (e.g. Plan Confirmation, After-the-fact Activity Records and Multiple Confirmation Records). Accounting and oversight requirements specific to payroll distribution systems (which support effort reporting systems) are documented in Circular A-21 under G