UNIVERSITY OF UTAH GUIDELINES FOR THE PERSONAL ACTIVITY REPORT SYSTEM (PAR)
I.WHAT IS A-21?
Federal Office of Management and Budget Circular A-21 “Cost Principles for Educational Institutions” establishes principles for determining costs applicable to grants and contracts with educational institutions. The circular also prescribes required documentation of costs, both direct and indirect (facilities and administration) (F&A), which constitute allowable charges against federal grants and contracts. The federal government will not reimburse the University for undocumented expenses, even though they were actually incurred on federal projects.
II.WHAT IS REQUIRED OF THE UNIVERSITY?
Circular A-21 contains rules and procedures for the substantiation and documentation of direct and indirect (F&A) payroll costs charged to federal grants and contracts. To comply with the requirements, the University has established a Personal Activity Report (PAR) system which consists of after-the-fact effort reports for all exempt employees who expend effort on sponsored projects for which reimbursement is claimed from the grantor and, in addition, exempt employees in a department associated with grants and contracts. Each calendar quarter the PAR must be completed to show:
- 100 percent of the effort expended in fulfilling the obligations of the employees University appointment and,
- The percentage distribution of payroll charges to each federal agreement.
A report form (listing the major direct cost categories) organized sponsored agreements, other institutional activities, and appropriated accounts) will be prepared for each individual required to report. The report will also list the employee’s total payroll distribution in dollars and percentages. The employee will be asked to review the percentage payroll distribution to federal projects, make necessary adjustments, if any, and then certify the report. If the percentage of distribution is changed then appropriate earnings plus related benefits, taxes and indirect (F&A) costs will be adjusted. The PAR must be signed by the employee, or in his absence, a responsible official with firsthand knowledge of the work performed.
III.HOW THE PAR INFORMATION WILL BE USED
The information obtained from the PAR forms will be used to substantiate and document effort under federal contracts and grants. Failure to substantiate charges and confirm actual effort after the fact and/or to explain discrepancies will normally cause the federal auditors to disallow costs reported on federal projects.
IV.PAR FORM AND INSTRUCTIONS
The PAR form and instructions, which are to be used to accomplish this federal effort reporting requirement, are included as a part of these guidelines.
PAR forms must be completed for:
- All exempt personnel who perform effort on sponsored agreements (fund 5000), and
- All faculty and exempt employees of academic departments who perform effort on funds 1001 and 6100 in the following ORG ID’s (see appendix 1).
Academic departments that have minor dollar amounts paid from sponsored agreements will be excluded from the survey. Minor will mean that sponsored agreements account for less than 5 percent of the total departmental budget. All individuals who do not meet the qualifications as specified in (1) and (2) above are excluded. Frequency of reporting for included individuals all faculty, graduate assistants, and employees designated as professional, administrative, who are classified as exempt under the Fair Labor Standards Act will complete a PAR for each calendar quarter. Nonexempt salaried employees, secretaries, clerks, typists, etc., who are paid through the University time and attendance reporting system, will be certified on the time and attendance reporting system by a responsible official with firsthand knowledge of the work performed.
VII.OVERVIEW OF PROCEDURES
Campus procedures for operation of the PAR system will include the following steps:
- At the end of each reporting period, PAR forms will be generated for each employee required to report.
- The PARs will be transmitted to the appropriate department and completed in accordance with the instructions.
- The completed PARs should be reviewed by a knowledgeable person within the department to ensure that there are no misunderstandings or gross inaccuracies. Obvious errors or discrepancies between the effort and payroll distributions should be corrected on the PAR form. The changes made to the PAR will affect the dollars charged to the chartfields. The PAR should be signed by the employee or the responsible official with firsthand knowledge of all the work performed by the employee.
- After review, the completed PARs will be sent, by the due date, to Cost Accounting & Analysis, 201 S. Presidents Circle (Park Building), Room 406.
- Cost Accounting & Analysis will reallocate changes of efforts plus benefits, taxes, and indirect (F&A) costs associated with adjusted effort.
- A copy of the PAR form will be retained by the academic department for possible review by federal auditors.
- Periodic internal reviews will be made by accounting personnel to assure that the effort reporting system is operating properly. The scope and results of these reviews will be summarized in a written report and sent to the appropriate University officials for necessary corrective actions.
VIII.COMPLETING THE REPORT
The PAR has a pre-printed certification. Each item in the report is discussed below. If assistance or additional information is needed, contact Cost Accounting & Analysis at extension 1-3743.
IX.INFORMATION AND INSTRUCTIONS FOR COMPLETING QUARTERLY PAR
For purposes of complying with OMB Circular A-21, the PAR should be completed by all exempt employees who charge effort to, or expend effort on sponsored agreements and exempt employees in departments associated with grants and contracts.
- Period ended refers to last pay period in the calendar year quarter. For example, in the fiscal year, the quarters would end as follows:
- September 30
- December 31
- March 31
- June 30
The information on this report will be for all earned activity from the payroll system for that quarter.
- Employee name, employee ID number, department name, department address, department number, and sequence number will be pre-printed by computer. The sequence number will refer to the order in which the reports were issued to the department. This will later be used by Cost Accounting & Analysis to identify any missing reports.
- Chartfield Distribution: all of the information contained in this section will be pre-printed by the computer except for the last column – “Show corrected percent (if it differs).” The employee will complete this column only if the actual effort differs from the pre-printed “Dollars” and “Percent of Total.”
- Chartfield/Account: Chartfields and account from which the employee is paid.
- Job Code: Employee classification set-up by Human Resources.
- Record Number: Identifies Personal Action Record generating pay and distribution.
- Begin / End Date: Begin and end date of the chartfields from which the employee is paid.
- Chartfield Name: Chartfield name established in accounting office.
- Dollars: Amount of pay received during a particular quarter.
- Example: For the quarter July 1 through September 30, this amount will correspond to the amount shown on the employee’s check stub except for employees who receive their academic salary on an annual basis (nine-over twelve payments). For faculty members, the amount listed will always be the percent of academic salary earned based upon the academic year.
- Percent of Total: The amount of dollars paid from this chartfield as a percentage of the total dollars paid for the quarter.
- Show Corrected Percent (if it differs): To be completed by employee if actual percentage of efforts differs from the budgeted amount paid to the employee, as shown in the “Percent of Total” column.
- Example: If the percent of total is 30 percent on a particular account and the employee believes that it should be 40 percent, enter 40 percent in the last column. “Show corrected percent (if differs”). Percent of effort in this column must add up to 100 percent of an individual’s effort.
- Organized Sponsored Agreements: Projects in fund 5000 (50000000-59999999). The project numbers refer to University restricted accounts which are generally funded from federal, state, and private sources. The primary purpose of these accounts is for research, training activities and public service.
- Other Institutional Activities: All chartfields other than those included under organized sponsored agreements and appropriated accounts.
- Appropriated Accounts: Chartfields from fund 1001 and 6100 in the previously listed OrgID’ under Selection Criteria (see appendix A). This includes effort spent on instruction, departmental administration, general administration, voluntary cost sharing, and recharge centers.
The PAR form is to be signed by the employee or a responsible official with firsthand knowledge of all the work performed by the employee. It is highly recommended that the employee sign his/her own PAR report, thus alleviating any future audit problems. A responsible official may be a department chairperson, account executive, or supervisor, depending on the circumstances involved. Federal auditors will probably interview “responsible officials” to determine whether or not they have “firsthand knowledge of all the work performed.” Accordingly, responsible officials are likely to be held responsible for any disallowances which may occur if firsthand knowledge cannot be demonstrated. “Responsible officials” should not sign PAR forms for employees working at off-site locations unless the employees’ activities are carefully documented.