State education agencies are implementing a new record-keeping option introduced quietly last year by the U.S. Department of Education and intended to ease what many see as a burdensome—and potentially costly—bookkeeping complication associated with the department’s grants.
The new option allows many school district employees who work on multiple activities and are funded partly or wholly by Education Department grants to employ a simplified method of tracking their “time and effort” for grant accountability.
This first major change in time-and-effort reporting for states and districts in more than 20 years not only holds out the promise of reduced administrative costs, it may also reduce the single biggest source of negative federal audit findings.
Instead of keeping monthly time logs—termed “personnel-activity reports,” or PARs—that show how much time they spent on each program or activity, teachers and others with an unvarying roster of duties may simply certify on a semiannual basis that they adhered to their teaching plans or schedules.
In an unprecedented move, the Education Department’s announcement last September gave blanket permission to states to make the option available to their school districts. Usually, the department approves so-called “substitute systems” only on a state-by-state basis, and a limited number of states have experimented with them. By contrast, at least 16 states—including California, Florida, Illinois, Missouri, New Jersey, and Texas—have made the new substitute system available for their districts. Texas alone had approved their use in nearly 280 districts as of last week.
Ramp-Up Phase
Because the new system only became available after the start of the 2012 fiscal year, this is the first year the new time-and-effort tracking system is available. It is still in the ramp-up stage, and national data are sparse on how many districts are using it.
The U.S. Department of Education has offered districts some relief on the record-keeping front when it comes to accounting for how employees spend their time on grant-funded activities. But a rule proposed by the Office of Management and Budget would supersede it.
Education Department Flexibility
- Applies only to U.S. Department of Education grants
- Replaces monthly time logs personnel-activity reports for employees working regular schedules and on multiple grants.
- Requires employees and supervisors to sign semi-annual certification that teaching plan/schedule was adhered to.
Office of Management and Budget Proposal
- Would eliminate all personal-activity reports.
- Multifunded employee or supervisor would sign annual certification that the employee’s pay was funded in proportion to the work performed on each program.
SOURCES: U.S. Department of Education; Office of Management and Budget
In Missouri, a total of 23 districts have requested permission to use the system, said Andrea Beck, the chief financial officer for the state education department.
“This is new, so it will take a bit before it becomes an accepted way of doing business,” she said. “I do see it increasing as LEAs [local education agencies] talk to others that have adopted the system. Also, as more LEAs understand what the intent is, I believe more will request approval.”
The new system may help districts avoid audit problems. A 2009 report from the Education Department’s office of inspector general summarizing seven years of audits of state and district management of federal formula grants said that about $103 million in questioned costs were related to inadequate or missing time-and-effort records. Other findings together amounted to only $79 million.
Common Problem
The change in time-and-effort reporting is intended to address a common problem. If an employee works on multiple “cost objectives,” such as a federally funded reading program in the morning and a state-funded special education class in the afternoon, the individual must keep track in a monthly time log. Ultimately, the school district may only draw money from a particular grant in proportion to the time the person actually spent on an activity eligible under that grant.
The problem arises from the fact that the log is above and beyond the typical time sheet, and teachers in particular find it difficult to link their minutes and hours to particular cost objectives.
By and large, teachers spend their day on one activity: teaching. Yet they may be funded from many different programs, said Tiffany Winters, a partner with Brustein & Manasevit, a Washington-based law firm specializing in federal education programs.
“The teacher may recognize that some classrooms have Title I-eligible children and some classrooms don’t, but they are not used to reporting that they spent 30 percent of their time on the Title I program,” she said, referring to the federal grant program aiding underprivileged students. “It’s not instinctual.”
At the same time, teacher salaries are a major cost under Education Department grants, so reform efforts have focused on streamlining record-keeping for teaching staff.
The current effort was sparked by a February 2011 presidential memorandum that requires federal agencies to explore opportunities to yield the same or better program outcomes at a lower cost.
In last September’s email announcing the new initiative to chief state school officers, the Education Department explained that it would allow state departments of education to permit their districts to use alternative records—such as a teacher’s course schedule—to document the time and effort of an individual who works on multiple activities or cost objectives but does so on a predetermined schedule.
Rather than submit monthly time logs, employees could certify twice a year that they followed their planned schedules.
The change is based on a suggestion submitted by Jennifer Carrougher, the director of the Washington state education agency’s office of audit management and resolution, in response to a federal Education Department request for creative ideas to help it implement the presidential memorandum.
“What really inspired this proposal,” she said in an interview, “was the amount of time we spent during resolution of LEA audit findings only to conclude we were able to review alternative documentation that supported the charges, which was usually weekly classroom schedules for staff who had a fixed schedule and served the same population for an extended period of time, regardless of what funding sources were used for these services.”
Agency Proposal Eyed
But the more widespread adoption of the change by states and districts may be inhibited by expectations raised by proposed changes put forth by the White House Office of Management and Budget. The proposals, which were published in the Federal Register Feb. 1 for public comment, would—if unchanged in the final version—dramatically simplify record-keeping for all federal grants.
For more on changes now in the works from the Office of Management and Budget on how grantees’ track their employees’ labor, read, “Time-Tracking Proposal for Grantees Draws Pushback.”
“The most recent proposed changes have significant implications for time-and-effort reporting requirements and, if adopted, would result in an extensive amount of reduced accountability over salaries and benefits charged to federal programs,” Ms. Carrougher said. “For this reason, we aren’t encouraging districts to change their systems of time and effort when OMB is proposing to throw most of those requirements out with the new circular that may come out during this school year.”
In Washington state, Ms. Carrougher said, only 10 LEAs have adopted the new system. “If an LEA notifies us they are going to utilize the new flexibility, we are allowing it,” she said.
However, given the uncertainty of when the OMB proposals might go into effect—some experts predict that July 1, 2015, is a realistic date—as well as their ultimate form, the Education Department’s substitute system might offer flexibility on an interim basis for districts eager for immediate relief.
