finance and administration
grants & contracts accounting

After-the-Fact Activity (Effort) Reporting

     

The Medical University of South Carolina

After-the-Fact Activity (Effort) Reporting Policies and Procedures
Revised 6/25/08


Table of Contents

Procedure NumberDescription
1.0Introduction
2.0Purpose And Scope
2.1After the Fact Reporting System
2.2Employees Covered
3.0Procedures
3.1Activity Reports
3.2Average Hours Per Workweek
3.3Exception to Appropriate Official Signature
3.4Significant Changes on an Activity Report
3.5Retroactive Changes on a Previously Certified Activity Report
4.0Internal Audit
5.0Guidelines For Department Effort Coordinator
6.0Timetable
7.0Category Definitions
8.0Definition of Terms
 Exhibit 1:Activity Report
Exhibit 2: Online Activity Report System Login page

1.0 Introduction

The Federal Government’s Office of Management and Budget (OMB) issued Circular A-21, on February 26, 1979 (subsequently revised), establishing principles for determining costs applicable to grants, contracts, and other agreements with educational institutions. All Federal agencies that sponsor research and development, training, and other work at educational institutions must apply the provisions of this Circular in determining the costs incurred for such work.

Circular A-21 deals extensively with the principles to be used in charging both direct and facilities and administrative (indirect) costs to grants, contracts, and other agreements. This analysis of the Circular, however, is limited to those provisions relating to compensation for personal services and, specifically, to the manner in which the Medical University of South Carolina complies with those provisions.

Compensation for personal services covers all amounts paid currently, or accrued by the University, for services of employees rendered during the period of performance under sponsored agreements. Such amounts include salaries, wages, and fringe benefits. Circular A-21 Section J .10. provides three methods for handling payroll distributions: a system of plan-confirmation, a system of after-the-fact activity records and a system of multiple confirmation records.

Circular A-21 Section J.10.b(2) sets forth criteria that a payroll distribution system must have to be acceptable which is prelude to selecting a method for handling payroll distributions.

1) The payroll distribution system must:

a)  be incorporated into the official records of the institution
b)  reasonably reflect the activity for which the employee is compensated by the institution, and
c)  encompass both sponsored and all other activities on an integrated basis, but may include the use of subsidiary records. (Compensation for incidental work described in Section J.10.a. need not be included.)

2) The method must recognize the principle of after-the-fact confirmation or determination so that costs distributed represent actual costs.

3) The payroll distribution system must allow confirmation of activity allocable to each sponsored agreement and each of the categories of activity needed to identify F&A cost and the functions to which they are allocable.

4) The payroll distribution system must reflect categories of activities expressed as a percentage distribution of total activities.

5) The direct and F&A charges may be made initially to sponsored agreements on the basis of estimates made before services are performed. When such estimates are used, significant changes in the corresponding work activity must be identified and entered into the payroll distribution system.

6) The system must provide for independent internal evaluations to ensure the system’s effectiveness and compliance with the above standards.

7) For systems which meet these standards, the institution will not be required to provide additional support or documentation for the effort actually performed.

2.0 Purpose and Scope

2.1 After-the-Fact Reporting System

The Medical University of South Carolina uses the After-the-Fact Reporting System as the basis for its distribution of salaries and wages for all faculty and staff. Under this system the distribution of salaries and wages is supported by activity reports. According to Circular A-21, MUSC’s after-the-fact reporting system must meet the following standards:

1) The activity reports must reflect the distribution of activity expended by employees covered by the system (compensation for incidental work as described in Circular A-21 section J.10.a need not be included).

2) These reports must reflect an after-the-fact reporting of the percentage distribution of activity of employees. Charges may be made initially on the basis of estimates made before the services are performed, provided that such charges are promptly adjusted if significant differences are indicated by activity records.

3) The reports must reasonably reflect the activities for which employees are compensated by the institution. To confirm that the distribution of activity represents a reasonable estimate of the work performed by the employee during the period, the reports must be signed by the employee or appropriate official using suitable means of verification that the work was performed.

4) The system must reflect activity applicable to each sponsored agreement and to each category needed to identify F&A costs and the functions to which they are allocable.

5) For professorial and professional staff, the reports must be completed quarterly. For other employees, the reports must be completed monthly and may coincide with one or more periods.

6) Where the institution uses time cards or other forms of after-the-fact payroll documents as original documentation for payroll and payroll charges, such documents shall qualify as records for this purpose, provided that they meet the above five requirements.

2.2 Employees Covered

The employees covered by the After-the-Fact Reporting System are all professorial and other employees which includes:

1) All University Faculty, except faculty with 100% effort in instruction.
2) All other University personnel who

a)    Cost share or charge activity directly either to one or more sponsored agreements
b)    Distribute their activities to more than one direct or indirect activity
c)    Split their effort between direct and indirect activities
d)    Have any or all of their effort charged to indirect research or indirect instruction

3) Affiliate Personnel - See Affiliate Policies and Procedures

3.0 Procedures

3.1 Activity Reports

An Activity Report (Exhibit 1) is provided to every employee covered under the After-the-Fact Reporting System quarterly throughout the fiscal year. This form will reflect the percentage of effort spent in total for each column (UDAK) for the respective pay periods. The Department Effort Coordinator will receive an e-mail from the Office of Grants and Contracts Accounting when the Quarterly Activity Reports are ready to view, modify and submit online. Each employee submits their reports online (Exhibit 2). The Department Effort Coordinator needs to make sure that all of the reports in their unit(s) have been submitted.   If adjustments to an employee’s actual effort have been made on the Activity Report it may activate a PEAR form to be processed through the department’s normal channels (see the "Significant Changes on an Activity Report" section below, Item 3.4).

A hardcopy of the Activity Report may be signed by a Dean, Chair, Director, Principal Investigator or Business Manager without the employee's signature (See "Exception to Appropriate Official Signature"), provided the appropriate official is prepared to certify that he/she has firsthand knowledge of all the employee's activities. If the appropriate official cannot certify that he/she has firsthand knowledge of all the employee's activities, then the employee must submit their own report. In some cases, an employee may be involved in a number of activities under different supervisors, and no single person other than the employee has firsthand knowledge of all his/her activities. In these cases, the form must be submitted by the employee. Only one signature is required if the person signing can certify all the employee's activities.

3.2 Average Hours per Workweek
The employee certification includes a field for the average hours worked per week. This information is necessary for Medicare requirements, therefore, those covered employees reflecting effort in either Incremental Teaching/Clinical Time, Clinical Instruction, Clinical Services, or Hospital Administration are required to provide this information.

3.3 Exception to Appropriate Official Signature

The appropriate official signature is not acceptable for those covered employees reflecting effort in either Incremental Teaching/Clinical Time, Clinical Instruction, Clinical Services, or Hospital Administration. The covered employee must submit the Activity Report to be in compliance with Medicare requirements.

3.4 Significant Changes on an Activity Report

Circular A-21 states that "charges may be made initially on the basis of estimates made before the services are performed, provided that such charges are promptly adjusted if significant differences are indicated on the Activity Reports". If a significant change on the Activity Report is necessary to reflect actual effort of an employee a new PEAR form must be completed. Although there is no precise definition for the term "significant," it has been construed as a general rule that a change applicable to a given project or activity of 5% or more of an employee’s total effort would warrant an adjustment. These adjustments should be implemented immediately after submitting the report.

3.5 Retroactive Changes on a Previously Certified Activity Report

A retroactive change in payroll distribution by a PEAR form affecting any previously certified time frame, must be subjected to the closest scrutiny. Such a change would indicate a contradiction of the certified effort and for that reason should be limited to the correction of errors. If a retroactive change should be made, it must be supported by a full explanation and must have approval by the Department Chair, Vice Chair or Business Manager or one level higher. The adjustment should be implemented within 90 days of the receipt of the  quarterly activity reports.

4.0 Internal Audit

The After-the-Fact Reporting System will provide for independent internal evaluation to ensure the system’s integrity and compliance with applicable standards. This independent evaluation will be performed by the Internal Audit Department of the Medical University of South Carolina.

Reviews by Internal Audit will meet the following standards:

1) Reviews will have the objectives of evaluating whether:

a) Certified Activity Reports are adequate, specific, and reasonable.
b) Changes are being promptly identified and reviewed by the department effort coordinator.
c) Prompt decisions on the significant changes are being made and documented by the appropriate official.

2) The review process will include interviews with a representative number of employees covered by the system. These interviews will determine whether:

a)    The employee is aware of his/her responsibilities to review and submit each Activity Report.
b)    The employee thoroughly understands the nature of a significant change.
c)    The employee is reporting significant changes in effort to his/her appropriate official.

3) Follow-up reviews will be made to determine that prompt action has been taken to correct any problems disclosed during the initial review.

4) Internal Audit will document and retain as a part of the official records of the Medical University of South Carolina, the following: the defined scope of the review, tests that have been performed and the results and recommended corrective actions. Internal Audit will report its findings on the After-the-Fact Reporting System in accordance with written institutional policies.

5.0 Guidelines For Department Effort Coordinator

Each department will appoint an individual to perform the duties of the Department Effort Coordinator. A training course on these duties will be administered by Grants and Contracts Accounting for all Department Effort Coordinators. The Department Effort Coordinator will act as the central distribution point between the department and Grants and Contracts Accounting. The responsibilities include informing all covered employees, via an e-mail distribution function in the system,  that the Activity Reports are available online for that quarter, ensuring that all reports in their unit(s) have been submitted to Grants and Contracts Accounting by the stipulated due dates and, if adjustments are necessary to the employee’s effort, notifying the appropriate individual in the department so that a PEAR form is processed through the departments normal channels. The departments are responsible for maintaining adequate documentation to substantiate any changes to a covered employee’s salary distribution that will hold up under internal and external audits.

6.0 Timetable

Quarterly Activity Reports Timetable

Approximate Distribution Date*

Approximate Due Date*

Approximate Delinquent Date*

October 1stNovember 29thDecember 30th
January 3rdMarch 4thApril 3rd
April 1stJune 30thJuly 30th
July 1stAugust 31stAugust 31st

* Exact Dates will be posted in the system and sent to the coordinators via e-mail.

7.0 Category Definitions

Sponsored and University Projects - All Organized Research, which is separately budgeted and funded internally (e.g., HSF awards or URC awards) or funded by agencies external to the institution, including sponsored research, research training, and sponsored instruction. In addition to the direct effort spent on a sponsored project, this would include time spent administering a sponsored research project, for example, writing the technical report. Includes grants and contracts projects, MUSC Foundation projects, and University Research Council projects.

Examples (not all-inclusive):

- Sponsored (Grant/Contract) activities (UDAK project number begins with 8 or 69).

- MUSC Foundation activities (UDAK reporting code begins with 51).

- University Research Council activities (UDAK reporting code begins 41).

- Does not include Department-Supported Research activities - Departmental Research activities are internally funded by non-sponsored/unrestricted funds and must be reported under the "Other University Activities" category.

Cost Sharing - Mandatory or voluntary effort expended on one account and paid for by another account (typically a non-sponsored account).

- Mandatory cost sharing is required by some sponsors and is stated (quantifiable) on the Notice of Grant Award (NGA) or in the grant proposal.

- Voluntary cost sharing represents additional effort expended on the project that is not required by the agency (not quantified in the proposal).

Examples (not all-inclusive):

- Activities funded by Cost Share Projects (nonsponsored/unrestricted funds with project description begins with "cost share").

- Activities which directly benefit Sponsored Activities but are funded by non-sponsored/unrestricted funds.

Incremental Teaching/Clinical Time - That portion of time which represents any additional time attending spent with patients providing services due to instruction involving teaching and training activities when degree candidates, interns, residents and fellows were present.  Also includes activities related to education of degree candidates, interns, residents and fellows outside of the clinical setting.

Examples (not all-inclusive):
- OR procedure: A case took 3 hours, but without the instructional component would have completed the case in 2 hours.  The 2 hour effort would be reported in Clinical Instruction, the 1 hour effort would be reported in Incremental Time.
-Includes clinical time spent with the patient that goes above the time which the attending could have provided the same service without housestaff present. 
- Lectures and conferences with housestaff as primary target.
- Administrative time specifically related to Graduate Medical Education (GME) programs.
- Lecture/conference preparation time if related primarily to housestaff.
- Housestaff evaluation and/or discipline.
- Housestaff recruitment, interviews, etc.

Clinical Instruction - Represents services for which direct patient care is rendered when degree candidates, interns, residents and fellows are present, but only the (time) effort that it would have taken the attending to provide the service if the previously mentioned housestaff and/or students were not present.

Examples (not all-inclusive):
- OR procedure: A case took 3 hours, but without the instructional component would have completed the case in 2 hours.  The 2 hour effort would be reported in Clinical Instruction, the 1 hour effort would be reported in Incremental Time.
- Supervision and instruction of housestaff in clinics.
- In-hospital rounds with housestaff as primary target.
- Includes clinical time spent with the patient.  However, the effort which goes above the time which the attending could have provided the same service without housestaff should be reported in Incremental Time.
- Does include clinical activities located at other non-MUSC hospitals with the exception of VA 8ths.

Clinical Services - Services for which direct patient care is rendered without degree candidates, interns, residents or fellows present and cannot be included in any other category on the effort report.

Examples (not all-inclusive):
- Does include clinical activities located at other non-MUSC hospitals with the exception of VA 8ths.

Hospital Administration - Consists of any administrative responsibility involving a hospital department. This includes hospital conferences, standing or special committees involving the medical or administrative operations of the hospital.

Examples (not all-inclusive):
- Management of a MUSC Medical Center hospital unit, ancillary department, or a hospital-based clinic.
- Activities related to performance as a medical director of a MUSC Medical Center department or hospital-based clinic.
- Serving on MUSC Medical Center hospital-based clinic meetings or committees (does not include committees related to housestaff instruction, which should be reported under the Clinical Instruction category).
- Does include hospital administration activities located at other non-MUSC hospitals with exception of VA 8ths.
- Teaching or instruction activities for Medical University hospital staff.

Classroom Instruction - Teaching & training of medical students in the classroom, does not include Housestaff or Sponsored Instruction funded by external sponsor grants.

Examples (not all-inclusive):
- Classroom and/or laboratory instruction of undergraduate and/or graduate students.

Other University Activities - All activities of an institution that are not specifically assigned to Sponsored & University Projects, Cost Share, Incremental Teaching/Clinical Time, Clinical Instruction, Clinical Services, Hospital Administration, and/or Classroom Instruction such as:

- Department-Supported Research - Research activities that are not sponsored, consequently not separately budgeted and accounted.  This would include research effort allowed by a department and funded through the department's general funds, such as seed money, start-up funds or interim funding.

- Departmental Administration - Administrative and supporting activities that benefit common or joint departmental activities in the deans' offices, academic departments, divisions and organized research units.  Includes effort for proposal development.  Some examples of employees included in this category are:  Chairs, Division Directors, Research Directors, Business Managers and Secretarial/Clerical staff.

- General Administration - Activities that benefit the general executive and administrative functions of the University and other activities of general character which do not relate solely to any major functions of the university (i.e., university-wide committees, such as Smart Stream Rollout Committee, or HeRMIT Commitee).

- Student Services - Activities that are established for the primary purpose of contributing to a student's emotional and physical well-being and to the intellectual, cultural and social development outside the context of the formal instruction program, i.e., student activities, cultural events, student newspapers, intramural activities, etc.

- Service/Recharge Centers - Effort devoted to any of the official University service or recharge centers, such as lab animal, university transportation, media services, print shop.

- Other - Other activities of an institution that are not specifically assigned to any other category, such as development, fund-raising, public relations, rare book collections and any activities or costs that are "unallowable" to sponsored agreements.

Examples (not all-inclusive):

- Department-supported research activities funded by non-sponsored/unrestricted funds.

- Research proposal development.

- Administrative activities related to department, college, and/or University committees.

- Administrative activities related to  department, college, and/or University activities which cannot be directly associated with a specific Sponsored/University research project, clinical/housestaff activities, or clinical services.

- Activities related to student services/committees (cultural events, student newspapers, intramural activities, etc.) which are outside of instruction-related programs.

- Activities related to any of the official MUSC service or recharge centers (contact GCA at 792-2850 for further information).

- Sabbatical leave.

8.0 Definition of Terms

Total Actual Labor Distribution - Represents how employee's time is distributed.

Approximate Payroll Distribution - Represents how the employee's salary was distributed in the HR/Payroll System for this quarter.

100% Effort means all work performed by the covered employee, including activities relating to any MUSC affiliate for which the employee is compensated. "Affiliates" does not include the V.A. Hospital.

                                                                                                                                                  

   

Activity (Effort) Reporting Working Group

Jeannine Mathews - Team Coordinator
Mike Bull
Judy Dubno
Kim Duncan
Velma Graham
Susan Mappus
Dillard Marshall
Sue Rittman
Linda Sears
Marie Townsend
Samuel Turne
Lynn Shull
Gail Stuart
David Welch


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