CONTRACTS AND GRANTS OFFICE

PERSONNEL ACTIVITY REPORTING SYSTEM

The University is required by OMB Circular A-21 to maintain a personnel reporting system for all employees paid either directly or as a cost share on Federal projects. In order to meet the specific requirements of the OMB, the system must:

• Be incorporated into the official records of the University;
• Reasonably reflect the distribution of effort for which the employee is compensated;
• Encompass both sponsored and all other effort on an integrated basis.

The Contracts and Grants Office is responsible for the development and maintenance of a system to capture personnel information to satisfy Federal regulations. The project director or department head is responsible for certifying employee time is allocated properly and for defending personnel charges questioned during audits. Staff in the Contracts and Grants Office is available to answer questions related to activity reports and meet with departmental personnel as needed to assist in their completion.

Activity reports are generated quarterly by the SAP HR system for salary employees. The beginning and ending dates of reporting periods coincide with payroll dates.

The SAP generated form includes four sections:

• Employee Information: Identifies the employee name, personnel number, department and pay periods.
• Direct Charges: Cost center/internal order numbers are preprinted with percentage of pay charged to each account. If the percentage charged to an internal order does not correspond with the employee's effort, space is provided to enter the correct percentage. Corrections require a UM Personnel Form 3 to adjust charges between accounts. This form should be submitted through appropriate channels at the same time the activity report is returned to the Contracts and Grants Office.
• Cost Sharing: Space is provided to enter internal order numbers and percentages of employee time devoted to projects as cost sharing. It is important to document cost sharing at the time of certifying direct charges. The addition of cost sharing after employee time has been certified is questionable from an audit standpoint.
• Certification: The report may be signed by the project director or department head. The certification covers not only the correct allocation of charges, but also the proper payment of cost sharing from non-federal sources.

Assuming the employee is set up to be paid properly by the department, the project director is only required to report cost sharing (if applicable), sign and return the activity report. Reports should be returned to the Contracts and Grants Office at 318 Martindale within a reasonable time, typically within 30 days after the end of the pay period covered. Delinquent reports may affect the University's cash flow, since information on the report is sometimes needed to submit requests for payment. Therefore, failure to return activity reports on a timely basis will result in project accounts being locked, pending receipt of the reports.

Documentation of cost sharing when a monthly employee is not paid directly from a federal account requires the submission of a manual form by the project director. Refer to the Personnel Activity Report for Cost Sharing below to download a copy of this form. This report should be submitted quarterly to correspond with the payroll dates.

This form has three sections to be completed:

• Employee Information: Enter the employee name, personnel number, department and pay periods.
• Cost Sharing: Enter project internal order numbers and percentages of time devoted to the project as cost sharing.
• Certification: The report may be signed by the project director or department head. The certification covers the proper payment of cost sharing from non-federal sources.

The timing of cost sharing reports is the same as reports for salary employees paid direct from federal accounts. Failure to report cost sharing on a timely basis will result in accounts being locked as stated above.

Every effort should be made by project directors and department heads to ensure employees are paid correctly from federal funds. While it may be possible to justify adjustments after effort has been certified on an activity report, frequent retroactive adjustments indicate a lack of internal control by the project director's department and the University. The following types of charging practices are almost certain to result in audit disallowances and refunds to the sponsor:

• Charging a grant with the anticipation of processing a retroactive adjustment to charge another grant when the new grant award is received.
• Retroactive adjustments toward the end of a grant period to use remaining grant funds.

Please refer to Guidelines for Expense Transfers for more information. When an adjustment is required to salary distributions previously certified, refer to the Revised Personnel Activity Report below to download a copy of the report form. This report should cover the same pay dates as the original activity report.

The form has four sections for completion:

• Employee Information: Identify the employee name, personnel number, department and pay periods.
• Direct Charges: Enter cost center/internal order numbers, previously reported percentages and correct percentages. A UM Personnel Form 3 is required to adjust charges between accounts. The form should be submitted through the appropriate channels at the same time the revised activity report is returned to the Contracts and Grants Office.
• Cost Sharing: Enter cost center/internal order numbers, previously reported percentages and correct percentages.
• Certification: The report may be signed by the project director or department head. The certification covers not only the correction allocation of charges, but also the proper payment of cost sharing from non-federal sources.

Attach a complete justification to the activity report explaining why the correct amounts were not originally reported. The Contracts and Grants Office is required by OMB Circular A-133 to report questionable transfers during our annual audit, and the project director's justification may be included as part of the report to the auditor.

The pay document generated and maintained in the department serves as the activity report for hourly employees. This document should:

• Indicate the hours worked per day;
• Be signed by the employee and project director/department head;
• Be maintained in the department as the official University record of time worked by the employee.

Effective January 1, 2000, each department will retain in their files a copy of the pay document for review by auditors from the University, the State Department of Audit and the Federal Government. The departmental copy becomes the official record of the University. All departments must follow this retention requirement. Any wage payments disallowed due to missing pay documents will be the responsibility of the employee's department.

When hourly employees are budgeted as cost sharing, the same procedures should be followed as SALARY EMPLOYEES BUDGETED AS COST SHARING - NOT PAID FROM FEDERAL PROJECTS. The pay document may not be used to document cost sharing, since it is retained in the department for the purpose of documenting direct charge time only. The Personnel Activity Report for Cost Sharing should be submitted quarterly as described above.

A UM Personnel Form 3 is required to adjust charges between accounts. A complete explanation and justification for the adjustment should be included in the personnel form and maintained by the department for review during an audit.

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