SBA Process Update - June 7, 2017
The University of Alberta’s Canadian and US Federal research grants were recently audited and I want to thank everyone for their assistance and support. Unfortunately, the audits raised serious concerns about Salary and Benefit Adjustments (SBA) [previously known as HR Redistributions] and how they are being used at the UofA.
The SBA process is used when a salary expenditure needs to be moved from one source of funds to another. The auditors have noted that SBAs are often being used for salary expenditures incurred in previous periods, sometimes as long as two years prior. Auditors have also noted instances where the redistributed salary expenditures were not eligible in projects because we could not provide sufficient appropriate evidence for the transaction. The result is that financial statements and claims sent to our sponsors are materially misstated and not compliant with their guidelines. This is a very serious issue and requires immediate attention by the UofA.
To ensure that our financial statements and claims are correctly stated for research projects, we are restricting the use of SBAs to salary expenditures paid within the current fiscal year (e.g. April 1, 2017 to March 31, 2018 is the current fiscal year). Adjustments to expenditures incurred in previous fiscal years will not be available within the SBA process. We have also worked with Human Resource Services (HRS) to ensure that the procedures and forms
used for SBAs are compliant with sponsor requirements and contain adequate supporting documentation.
In general, SBAs should be avoided as much as possible and we strongly recommend that salary expenditures be charged to the correct research project when paid. The proposed changes to the SBA process will be implemented by July 31, 2017. The following strategies should be considered as they all reduce the need for SBA’s in research projects:
Ensure salaries are charged to the correct speed code/project when paid based on the projects that employees are working on at the time.
Proactively update Pay Action Forms as research team members begin work on different projects. When an SBA is deemed necessary, ensure salary distributions going forward are updated at the same time. Information on how salary distributions can be updated with eForms can be found in the eForms for Distribution Only Changes procedure.
Allocate salaries to multiple projects using the Pay Action Forms/eForms when necessary based on the time and effort expended on each project. Pay Action Forms/eForms allow salaries to be distributed to multiple projects by either percentages or fixed dollar amounts.
Regular reviews of project financial statements (Researcher Home page, Financial Overview, eTRAC, etc.) to ensure the correct personnel are being paid out of the appropriate research project.
Request a “release of funds” for research projects that require ethics certifications (allows spending on the portion of research activities that do not require ethics certifications). This will often reduce the need to charge salary expenditures elsewhere while waiting for ethics certifications to be completed.
If adjustments are necessary, we strongly encourage that the SBA be completed within three months after the salary expenditure is incurred. For those rare situations where a correction of salary expenditures incurred in a prior fiscal year is necessary and appropriate, RSO is developing a process with HRS and Financial Services by which such corrections can be requested and it will be in place by July 31, 2017. However, it should be noted that such corrections will only be authorized if they are in compliance with sponsor and audit guidelines.
The UofA’s ability to continue receiving and holding Tri-Agency and US federal awards is dependent upon our ability to comply with our sponsors’ guidelines and your immediate attention to these recommendations is greatly appreciated.
Michael Walesiak, CPA, CA
Associate Director, Finance
Research Services Office, University of Alberta
Phone: (780) 492-1642