The OIG Panel Session at the June 2018 COGR meeting addressed key issues surrounding compensation compliance under the Uniform Guidance (UG), with a particular focus on the experiences and findings from the Federal Demonstration Partnership (FDP) Payroll Certification Pilots. High-ranking OIG officials from the NSF and HHS discussed the ongoing challenges Institutions of Higher Education (IHEs) face in documenting compensation costs, especially given the historic burdens associated with effort reporting in academic environments where activities such as research, teaching, and service are inextricably linked. The panel noted the shift under the UG, which allows for alternative approaches to the traditional effort reporting paradigm, thereby providing IHEs with increased flexibility, while emphasizing the continuing importance of robust internal controls and well-documented systems to support federal compliance.
The session further explored the practicalities of audit processes, including the roles and expectations of auditors, variances in regulatory interpretations, and the necessity for clear documentation and audit trails to assure the appropriateness of charges to federal awards. The panelists highlighted that auditors operate independently and in alignment with published guidance, with compensation audits prioritized based on risk assessments—often informed by data analytics. Both HHS and NSF OIG affirmed support for alternative documentation methodologies, provided they are underpinned by strong internal controls. Throughout the discussion, there was recognition of the need for effective training, transparent processes, and open communication to facilitate compliance, ensure efficiency, and foster positive audit engagements. The panel concluded that successful compensation compliance hinges on a mutual understanding of requirements among all stakeholders, continuity in documentation, and an ongoing commitment to balancing efficiency with integrity in managing federal research funds.
