Jacyln Gavino, Partners Healthcare

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Region I RADG Meeting April 1, 2009
NCURA Chest
EFFORT REPORTING Audit Findings and Options for
Safeguarding Your Department Institution
Audit Chance
Jacyln Gavino, Partners Healthcare Alan Long,
Harvard Faculty of Arts Sciences Michael
Vernick, Hogan Hartson Susan Zipkin, Brigham
Womens Hospital
Reference Parker Brothers Monopoly
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Federal Requirements and Policy Options for
Universities By Alan Long Assistant Dean,
Faculty of Arts Sciences, Harvard University
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Why do we need effort reporting?

• We dont, but
• The government does have a right to make sure
  that its funds are being spent responsibly and
  productively.
• Its a huge audit item nowadays, so maybe we do.

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What should it be called?

• Effort reporting?
• Salary certification?
• Payroll distribution?
• Effort certification?

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How should you do effort certification?

• Read OMB A-21, butA-21 is (intentionally?)
  vague

There is no single best method for documenting
the distribution of charges for personal
services.
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Two Important Requirements

• The payroll distribution system read effort
  certification system must encompass both
  sponsored and all other activities on an
  integrated basis.
• The method must recognize the principle of
  after-the-fact confirmationso that costs
  distributed represent actual costs.

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Examples of Acceptable Methods

• Examples from A-21
• Plan Confirmation
• After-the-fact Activity Records
• Multiple Confirmation Records
• Make up a system that works for you, and test it
  with your auditors.
• By person?
• By grant?

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Effort Reporting and Academic Freedom

• A-21 in an academic setting, teaching,
  research, service, and administration are often
  inextricably intermingled. A precise assessment
  of factors that contribute to costs is not always
  feasible, nor is it expected.

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Effort Reporting and Academic Freedom

• AKL To preserve the academic freedom inherent
  to any institution of higher learning, dont ask
  people to certify more than you need to report.

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Who should sign effort certifications?

• Per A-21, responsible persons with suitable
  means of verification that the work was
  performed.
• The PI?
• The employee?

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When should you do your effort certifications?

• How frequently?
• Monthly?
• Annually?
• Other?
• How long after the period being certified?
• 30 days?
• 90 days?
• Longer?

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Monthly Certification Pros Cons

• Pros
• Ties nicely with monthly financial planning
  conversations with PIs
• Fewer problems with late cost transfers
• Fewer problems with re-certification
• Cons
• More work for administrators faculty
• More paper consumed

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In Summary

• Each institution must design its own policy and
  procedures there is no right way
• Make them as simple as possible so they are easy
  to implement and execute

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Federal Requirements and Policy Options for
Hospitals, Non-Profits, and Government By Jacyln
Gavino Manager, Effort Reporting, Partners
Healthcare
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General Requirements
Effort reporting serves as assurance that work
has been performed, sponsor commitments were met,
and salary was appropriate
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Regulation Comparison
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Regulation Comparison
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Regulation Comparison
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Regulation Comparison
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Guidance, System, Training Considerations

• Classified Payroll
• Clinical Trials
• Compliance Monitoring
• Cost Charging
• Cost Sharing
• Cost Transfers
• De Minimis Effort
• Dual Appointments
• Departing Staff
• Effort Certification
• Effort Recertification
• Escalation
• Fund Changes Midperiod
• Fund Monitoring
• Fund Setup

• Institutional Base Salary
• K Awards
• Memorandum of Understanding
• No Cost Extension
• Other Support Page
• Proposal Writing Activities
• Record Retention
• Salary Over the Cap
• Short Term Fluctuations in Effort
• Significant Changes in Work Activity
• Sponsor Reports (e.g. AHA)
• Summer Salaries
• Training Options
• VA Appointments
• 100 Sponsored Funding

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Methods of Certification By Jacyln
Gavino Manager, Effort Reporting, Partners
Healthcare
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Timesheets or Effort Reports

• Paper based or electronic
• Helpful if sponsor commitments, payroll
  distribution, and effort distributions are
  displayed

Image http//www.health.state.ny.us/diseases/aids
/funding/docs/time_and_effort_reporting.pdf
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Error Check
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le.jpg
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Image http//www.progardenbiz.com/Images/Departme
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Vendor Evaluation Checklist

• Company background
• Functionality and customization options
• Live demonstration
• User friendliness
• Technology
• Implementation process
• Product support
• Reference checks
• Timeline pricing

Image http//media.hoover.org/images/ednext_20072
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End Users Lessons Learned

• Obtain upper management buy-in and support

• Involve representatives from the research
  community
• Win over your biggest critics
• Fully document functional requirements to avoid
  scope and cost creep
• Always keep end users in mind
• Prioritize must haves and nice to have
• Develop supporting policies
• Develop training plan with multiple venues

• Pilot system with several case scenarios
• Phase transition and provide resources for
  support
• Provide adequate communication
• Provide continuing education

Image http//duckman.pettho.com/characters/scroog
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Effort Reporting Compliance Begins in the
Department Best Practices and Helpful
Hints By Susan Zipkin Director, Radiology
Research Finance, Brigham Womens Hospital
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The Basics

• salary ? effort

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The Basics

• NIH CAP
• Other sponsor caps
• PIs at less than 100 effort

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The Basics

• In order to be successful at effort reporting you
  must
• Be organized
• Have good systems in place
• Communicate with your PIs
• Reconcile your accounts monthly

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The Basics

• Meet regularly with your PIs
• Use tools for planning
• Develop SOPs
• Have a system to track and verify changes have
  made it through the system
• Follow up with PI

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The Basics

• Bring effort reports to you meetings to get
  signed
• Arrange to stop in to have effort reports signed
  for other PIs nearby where you are having your
  meeting
• This will allow you to get more effort reports in
  a timely manner

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The Basics

• Have the actual employee sign the effort report
  whenever possible

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COMMUNICATION!

• Always meet to discuss a new award
• Ask questions!
• Who will have effort on the award?
• Where will effort be reduced?
• Will anyone need prior approval to reduce?

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REVIEW PIs Salary/ Effort on GRANTS ON A MONTHLY
BASIS

• Send a quick email to PI after he/she has time to
  review the monthly report
• Do any adjustments need to be made?
• Are salaries charged appropriately?

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REVIEW PIs Salary/ Effort on GRANTS ON A MONTHLY
BASIS

• Ask PI if he/she anticipates any changes in
  salary distribution in the next month?
• Send an email summarizing any changes that you
  have discussed
• Use this for back up on you salary distribution
  changes

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CONDUCT A MORE COMPREHENSIVE QUARTERLY REVIEW
WITH PI

• Is the grant ending?
• Do you need to request a no-cost extension?
• Can you maintain current level of effort?...If
  not, prior approval must be obtained from Grant
  Specialist

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CONDUCT A MORE COMPREHENSIVE QUARTERLY REVIEW
WITH PI

• BE PROACTIVE..Review status of planned and
  pending grants
• Plan aheadwhere effort may need to be reduced,
  is it a 25 or greater reduction?

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CONDUCT A MORE COMPREHENSIVE QUARTERLY REVIEW
WITH PI

• Stay well ahead of the 90 day allowance to
  process youre your salary distribution changes.
• Make pretend you only have 60 days
• This will significantly reduce over 90 salary
  cost transfers

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Utilize the Technology

• Web based systems
• If your institution does not have a good
  web-based tracking system, create your own
  systems to keep track.
• Excel is a great tool for maintaining info on
  grants and effort.

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Use the tools!

• We maintain a spreadsheet for each PI showing
  each month of the fiscal year how much effort is
  on each grant.
• Our spreadsheet always has the most up to date
  information on the PIs effort distribution.
• We attach these reports directly to the effort
  report.

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PLAN ANNUAL SALARY SUPPORT FOR EACH PI
FY09
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Allocate Clinical TrialsSalary and Effort
Questions on Clinical Trials?
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SOPs

• Develop Standard of Procedure for making changes
  to effort.
• Include a checklist to attach to all salary
  distribution changes to reflect any changes in
  effort.

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Items to include on Checklist

• Is the change over 90 days?
• If yes, attach justification
• Has an effort report been filed covering the
  period affected by the change?
• If yes attach a revised report
• Does the change reflect a reduction of 25 or
  greater by key personnel?
• If yes, attach approval from sponsor

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Items to include on Checklist

• A list of all the accounts affected by the change
• Allow for a check off as the projections for each
  of the accounts are updated to reflect this
  change.

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Follow UP

• Develop a system to verify that the changes have
  been processed as requested
• Monthly review of actual vs. projections
• Follow up with any variances as they occur

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KEEP ACCURATE AND COMPLETE RECORDS

• Develop a system to track effort reports have
  been returned. Keep a copy on file in the
  department.
• Copies can be used for reference when a PI
  requests a retro active distribution change, you
  will need to verify prior effort certifications,
  and determine if the change is appropriate,
  and/or in need of recertification.
• Follow up on any outstanding certifications.

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Susan ZipkinDirector, Research FinanceRadiology
DepartmentBrigham and Womens Hospital617-525-87
34szipkin_at_partners.org
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Effort Reporting-Related Enforcement By Michael
Vernick Partner, Federal Research Practice,
Hogan Hartson
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Overview

• DOJ False Claims Act settlements
• Yale
• Saint Louis University
• NSF effort reporting audits
• Compliance considerations

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Renewed Emphasis on Enforcement
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Recent Settlements
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Recent Settlements
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NSF Effort Reporting Audits

• Several audit reports issued in 2008
• Others currently in progress
• Issues identified include
• Late certification
• Unsigned effort reports
• Institutional base salary
• Direct charging administrative activities
• Cost sharing
• Variances between actual and reported effort
• Some challenges related to managing the auditors
• Some harsh language in the reports but generally
  limited financial repercussions

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Compliance Challenges

• Paying for non-sponsored activity
• Institutional focus on maximizing salary support
• Economic incentives facing PIs
• Providing and supporting an adequate
  administrative infrastructure
• Antiquated or otherwise weak financial systems
• Financial reporting is delayed or inadequate
• Not enough central management/monitoring
• Administrators lack training and/or authority

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Managing Effort Reporting-Related Compliance
Issues

• Some challenges require senior leaderships
  involvement
• E.g., financial and other forms of support
• But there are also several areas where attention
  and focus from the sponsored research community
  can pay significant dividends
• How do we define IBS?
• What is total professional effort?
• How do we ensure that employees assign reasonable
  percentages of effort to sponsored activity?
• Do we have the operational elements of effort
  reporting under control?
• Do we have any special compliance issues

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Questions?