CGA Guidelines for Documentation Requirements for Salary Cost Redistributions to Restricted RC Accounts
This document has been created to assist departments with the documentation guidelines Contract & Grant Administration (CGA) will be looking for while reviewing salary distribution changes increasing salaries on restricted RC accounts (federal and state of Michigan grant accounts & federal AgBioResearch & MSUE accounts). This process includes SAP Cost Redistributions, Conversion Retroactive Change forms, and Summer Pay Changes.
A "current" salary change is one that is received by Human Resources or Payroll within 60 days of the effective date of the proposed change. Salary changes that are "current" do not require CGA approval and will be processed without CGA review or additional documentation.
A "late" salary change is one that is received by CGA in excess of 60 days from the effective date of the proposed change.
CGA considers the following to be low-risk "late" salary changes and will approve without additional documentation or with minimum additional documentation when:
- The effective date of the salary change is less than or equal to 90 days, and the change does not conflict with a previously certified Effort Report. However, if for example, a form is received by CGA on 2/1/xx that is effective back to 11/1/xx (90 days) and the 12/31/xx effort report has been completed, and that effort report does not support the requested change, then the requested change will be denied unless documentation as described in the higher-risk section below is provided.
- For accounts that were setup after their effective date (late accounts), and the requested change is received by CGA within 60 days of standard account setup (initial standard setup or after removal from advanced or hardship status), and the requested change is supported by the effort report (if available).
Note: When you become aware of an employee who is beginning to work on a project that has not been awarded, it is best to request a hardship or advance account so expenses can be charged to the correct account. This will eliminate the need to process "late" salary changes on restricted accounts.
CGA considers the following to be medium-risk "late" salary changes and will approve with minimum additional documentation when:
- While completing the Effort Report, a salary change is necessary to "true-up" the initial estimate of the pay that was planned on the project to what was actually performed. This change is usually a minor adjustment (+ or - 10% of the pay percent shown on the effort report, i.e. 50% shown "trued-up" to 55%) to true-up the payroll to the actual effort certified on the Effort Report. In addition, this change must also be:
- Done within 30 days of receiving the Effort Report notification.
- Be supported by a properly certified Effort Report.
- In these cases, in the notes section of the requested change should include a note similar to the following "This change is necessary to reflect actual effort performed, and is the result of reviewing the Effort Report."
CGA will consider all other requests to be higher-risk "late" salary changes, and will consider approval when the requested change is:
- Accompanied by a completed Cost Transfer Form.
- Supported by additional documentation, if necessary. As the actual risk increases, additional documentation may be requested, such as a copy of the person's calendar with activities that benefitted the project highlighted, progress reports, meeting agendas and minutes, e-mail exchanges, etc.
- Supported by an Effort Report, when applicable.
- If the requested change is not supported by a previously completed Effort Report (proposed revised payroll would exceed the effort percentage reported on the Effort Report), this indicates a lack of understanding of how to correctly complete the Effort Report. Approval will be considered after the above documentation has been reviewed, and the person completes a Effort Report refresher course and recertifies the Effort Report, and the department chairperson is made aware of the financial risk to the department if the salary form is processed.
Questions regarding cost transfers can be directed to the Audit and Compliance Group at firstname.lastname@example.org. Questions regarding Effort Reporting can be directed to Meghan Cartwright at email@example.com.