2.00 Salary Certification Policy
Compensation costs (salary and employee benefits) are allowable for services of employees working on contract and grant funds and all other cost objects, provided they conform to the established policies of the institution and to the requirements of the federal government Uniform Guidance. The salary distribution system records these salary and wage costs, as they must be incorporated into the Institute's official records and reasonably reflect the activity for which the employee is compensated.
There are two web-based tools available through Atlas to assist the electronic management of salary distribution and certification throughout the Institute:
- eDACCA Salary Distribution Report System – enables administrators and principal investigators to electronically review and certify salary distribution by cost object.
- eSDS Salary Distribution System – enables administrators to make salary distribution changes for both weekly and semimonthly paid employees and students. eSDS replaced the legacy DINDI and SANDI reports and the eSANDI application.
It is Institute policy to have each Quarterly Salary Distribution Report (Quarterly DACCA) certified by an appropriate individual. This requirement applies to all cost objects, not just sponsored programs. The Principal Investigator/Cost Object Certifier in association with the head of the DLC or administrative office is ultimately responsible for making sure that all cost objects with payroll charges are certified in accordance with Institute policy. One of the conditions of the federal regulations is that after-the-fact confirmation of the costs must represent actual costs and must be confirmed by "responsible persons with suitable means of verification that the work was performed" per Uniform Guidance. MIT’s implementation of the A-21 requirement requires certification by “an individual with direct knowledge of the work performed.”
In MIT's official submission to the government and in the Institute's policy for payroll documentation, the requirement for such confirmation is to have the Quarterly Salary Distribution Report (the payroll report which documents salary distribution to cost objects) electronically certified in the payroll eDACCA system. Electronic certification must be performed by either:
(a) An individual with direct knowledge of the work performed (“eDACCA certifier”) – usually the cost object supervisor, or
(b) An individual who has received the DACCA or equivalent report signed by the eDACCA certifier (“eDACCA Administrator”).
If electronic certification is via a proxy electronic certifier, (“eDACCA Administrator”) the supporting documentation (signed DACCA or equivalent) must be retained in the department/laboratory/center and available for audit for the current fiscal year plus four additional fiscal years. Charges not supported by this documentation must be removed from contract and grant accounts. If electronic certification is by the eDACCA Certifier, no supporting documentation is required.
Ideally, the certifier is the person directly supervising the activity, who reads and understands the technical reports, and knows the corresponding cost objects as well as the individual’s effort on the projects. In general, for research projects and for WBS (sponsored) funds, this is the principal investigator (cost object supervisor). Administrative Officers are not normally acceptable certifiers of such cost objects.
In some cases, the principal investigator (PI) may choose to have his/her DACCAs routinely certified by a designated individual who has direct knowledge of the project effort – typically a research staff member, possibly of senior status. In these instances, the PI should sign a statement similar to the following, which the department’s HR Primary Authorizer should retain in department headquarters.
- “I authorize [name of designee] to certify DACCAs for the projects listed below [include project name and MIT cost object number] under my supervision, as the designated individual with direct knowledge of work performed.” [followed by name and signature of PI]
In cases when the PI is temporarily away from MIT and is unavailable to certify the quarterly DACCAs by the certification due date, it is recommended that a temporary designee be appointed, with a statement similar to the one below:
- “In my absence from [date] to [date], I authorize [name of designee] to certify DACCAs for the projects listed below [include project name and MIT cost object number] under my supervision, as the designated individual with direct knowledge of work performed.”[followed by name and signature of PI].
In addition, departments may authorize DLC administrators who are not the cost object supervisor to certify the DACCAs for cost objects for which they have direct, or reasonable, knowledge of the salary charges being made, such as:
- Department-controlled general funds
- Non-sponsored (non-WBS) funds
- UROP funds
- Professorships and fellowships
To make it easier to maintain Roles authorizations, DLC administrators may be given the authorization of eDACCA Certifier for their entire Profit Center with the understanding that they should only certify those cost objects for which they are permitted to use that authorization, in accordance with their job responsibilities. A list of the cost objects they are permitted to certify should be maintained locally in the department.
An employee or student’s salary should always be charged to the cost object(s) related to the project or activity he/she is working on, in the following order of preference:
- Active cost object
- Pending WBS cost object, set up by OSP – see below
- Payroll suspense cost object of the department or lab where the employee or student is working. Note that if an individual is working for a different DLC than the home department, it is up to the DLC to move the charges to the appropriate suspense depending on where the individual is actually working. SAP will use the suspense cost object of the HR Org Unit attached to the appointment.
Suspensed payroll charges must be transferred from the suspense cost object on a timely basis, defined as within 90 days after the end of the quarter in which the suspense postings were made.
For more information see Payroll Suspense Process.
When work may begin on a project (WBS element) depends on the terms and conditions of the research award and the sponsor/agency policy. A rule of thumb is that a Principal Investigator may incur pre-award costs up to 90 days prior to the effective date of the project. As negotiations progress toward the award, OSP may set up a WBS cost object in pending status to collect these expenses even though the award has not been received. Salaries and other expenses may be charged to a WBS in pending status but no bills to the sponsor will be generated until the WBS status is changed to active.
In no circumstance should charges in anticipation of a new award be incurred against an existing research cost object, federal or non-federal.
These costs are allowable if there is an award. Although it is rare, there are situations where pre-award costs have been authorized but the contract is never finalized. In these situations, the PI/department is responsible for the costs incurred if the award doesn’t come to fruition.
Authorizations for the eDACCA Salary Distribution Report System and eSDS Salary Distribution System are managed via the Roles Database and may be granted by the HR Primary Authorizer for the department. Each of these roles may be assigned with the ability to view percent of salary only, or both percent of salary and salary dollars distributed.
Roles may be assigned at varying levels in the SAP Profit Center hierarchy, from Profit Center Group at the highest level to a single cost object at the lowest. Assigning access at the cost object level is not recommended unless there is no other appropriate alternative, due to the overhead required to maintain Roles authorizations at the cost object level. The following roles are available:
eDACCA Certifier – an individual with direct knowledge of the work performed who is authorized to certify the DACCA without maintaining paper back up. The eDACCA Certifier can be authorized to access % only or % and dollars. Authorization granted at the following levels:
- Profit Center (rare)
- Profit Center/Cost Object Supervisor
- Cost Object
eDACCA Administrator – a DLC administrator who is authorized to electronically certify the Quarterly Salary Distribution Report by proxy and who is responsible for retaining supporting documentation signed by the certifier. The eDACCA Administrator can be authorized to access % only, or % and dollars. Authorization granted at the following levels:
- Profit Center Group
- Profit Center
- Profit Center/Cost Object Supervisor
- Cost Object
eSDS Administrator – is authorized to access and update salary distribution records. There are two roles for distribution maintenance – one for appointments in the HR Org Unit and one for transfers in. Both roles may be granted with the ability to see salary or not. Distribution authorizations for appointments in the HR Org Unit are granted for the entire HR org unit. Transfer-in distribution authorizations may be granted at the following levels:
- Profit Center Group
- Profit Center
DACCA Addressee – will receive centrally-printed monthly, preliminary quarterly, and final quarterly DACCAs for all cost objects in the profit center. Central printing and distribution of DACCA reports is limited to academic and research departments (i.e., departments not under the Executive Vice President.) This authorization may be granted at the following level:
- Profit Center (one recipient per profit center)
Recipients of centrally printed DACCAs may choose from the following options, on a profit center by profit center basis:
- Receive no centrally printed DACCAs
- 1 copy with percent only and 1 copy with both percent and amount
- 1 copy with percent only
- 1 copy with both percent and amount
DLCs cannot change this authorization in Roles themselves. If a department wishes to change the addressee or to stop receiving centrally printed DACCAs, their eDACCA Administrator should send an email request to email@example.com.
- Salary distribution changes for charges within the quarter may be made via the electronic salary distribution system (eSDS) without written justification for up to 90 days following the end of the quarter. Example: For Q1, July‐September, retroactive changes may be made until December 30 without written justification to charges posted back to July 1.
- After the 90‐day period, eSDS Administrators cannot make changes to the distribution via eSDS. Exceptions will require approval of the Director of the Office of Sponsored Programs (OSP) and/or the Controller, and if approved, will be processed by HR/Payroll.
- Requests for distribution changes more than 90 days after the end of the quarter must be submitted via a Late Distribution Change Request form.
- These time limits apply to all cost objects, not just sponsored projects.
- There is an exception for terminating federally funded sponsored projects, which require final reports within 90 days of project termination. The window for retroactive changes to terminating federal projects is until the end of the month following the month the project terminates.
- Certification must be indicated electronically in the electronic salary certification system (eDACCA), even if a department chooses to have the certifier sign paper copies of DACCAs.•
- Certification is expected 60 days after the quarterly DACCAs become available.
Monthly Closing Schedule
Note: It is important that departments perform a monthly financial review to verify distributions and make timely distribution corrections, to ensure good financial management, operation of internal controls, and reduction of overall effort required. Falling behind will result in a potentially onerous catch-up effort at the end of a quarter, when there is less time to make corrections.
- It is recommended that DACCAs be reviewed in the first month following the end of the quarter and certified if all charges are deemed correct before the eSDS deadline (generally by the 25th of the month). If charges are identified that are not correct, the distribution should be corrected in eSDS during the first month.
- It is expected that certification will be completed by 60 days (two months) after the end of the quarter. For all DACCAs not certified by the end of the first month, the DACCA should be reviewed again in the second month, to ensure that all needed changes were processed, and should be certified as final by the last day of the second month.
- We continue to strongly encourage the monthly review of salary expenses by DLC administrators as outlined in MIT’s Financial Review and Control (FRC) procedures.
The Office of the Vice President for Finance (VPF) is responsible for reviewing and making decisions on requests for distribution changes beyond the 90-day window after the end of a quarter. Retroactive salary changes impacting time periods more than six months past the end of the eSDS review period will be approved for transfer on an exception basis when VPF can determine that these costs are allowable.
Late Salary Distribution Change Process
After the period for DLCs to make electronic changes to payroll distribution has passed (i.e., beyond 90 days past the end of the quarter), the DLC decides that salary redistribution is required.
The DLC fills out the Late Change Request form via the web and submits it for review.
A late change reviewer then reviews the request on behalf of the VPF and either:
Forwards the form and a preliminary recommendation regarding approval to the VPF, or
Contacts the DLC for additional information and adjustment.
After the form is forwarded to the VPF Late Salary Team, a decision is made regarding the request and:
If approved, the request is forwarded to Payroll for processing with a copy to the requester as notification.
4.1.1 Payroll updates SAP accordingly per Payroll feed.
Or, if the request is not approved, notification of the declined request is sent to the DLC requester by the Late Salary Team and the status of the request will be reflected in the inbox.
- Learn more about policies concerning cost transfers at:
VPF Financial Accounting and Reporting (FAR) will send email reminders to community members at 55 days following the end of the quarter. Financial Accounting and Reporting will send an email to all Assistant Deans with a report of all uncertified DACCAs beginning on the first business day of the third month after the end of the quarter (day 61). The Assistant Deans will communicate this information to the DLC Heads and Administrative Officers in a timely way.
Follow-up reports by Financial Accounting and Reporting will be sent to the Assistant Deans each week of the third month until day 80.
On the 80th day, a notification will be sent to Assistant Deans, Department Heads and Administrative Officers warning those with uncertified DACCAs that there will be consequences if the salary costs remain uncertified on day 91. Reminders will be sent again on the 85th day and the 89th day. It is expected that the DLC Head and/or Administrative Officer will inform the principal investigator and/or account supervisor of the required action and the consequences if certification is not completed by 90 days.
The consequences are as follows:
- On day 91, the VPR will notify the Assistant Dean, AO and Department Head/Lab Director that the PI must certify the EDACCA within 10 days. In addition, the Department Head/Lab Director must write a letter to the VPR within the next 15 days indicating:
- The charges on the account have been verified as correct (effort and salary charge align with the effort on the project) and that the appropriate action has been taken to certify the EDACCAs for the cost object.
- An explanation for the reasons why these charges were not certified by the deadline (Date).
- A confirmation/assurance that PI is providing oversight to this research program and this won't recur.
- If this effort is unsuccessful, uncertified salary costs on sponsored cost objects (research or WBS), will become unallowable and will be permanently removed from the project on day 106. These costs once removed will not be allowed back on the project. The DLC will need to provide a discretionary cost object to transfer these costs to. If no cost object is provided, the costs will be transferred to the DLC Payroll Suspense cost object.
- Non-sponsored cost object (cost centers or internal orders) will be suspended on the 106th day and will remain suspended until the salaries have been certified.
There will be no changes to the quarterly DACCA after it is available. Late changes that are approved will be shown on the quarterly DACCA for the quarter in which the late change was entered. For example, a distribution change made in April (Q4) for the previous September (Q1) will be reflected on the Q4 DACCA for certification.
The following are examples of business processes to generate acceptable supporting documentation for proxy certification of Quarterly Salary Distribution reports (DACCAs). Each DLC is responsible for reviewing and certifying salary distribution on a quarterly basis. While each DLC may create their own process to meet this responsibility, the recommendation is to encourage certifiers to do electronic certification themselves to reduce the need for long-term retention of supporting documentation in the DLCs.
Option I – eDACCA Certifier Reviews Preliminary Quarterly DACCA
- The DLC administrator mails a paper copy of the Quarterly DACCA (for Q1 the DACCA generated on or around October 1st) to the eDACCA certifier (usually the cost object supervisor). The certifier, who has direct knowledge of those working on the project, indicates any changes in salary distribution for individuals, including any additions/deletions of individuals, signs and dates the paper DACCA and returns it to the DLC administrator.
- The DLC administrator makes the changes in the electronic Salary Distribution System (eSDS). During the period October 1 - December 31 for the first quarter DACCA, the DLC administrator electronically certifies the quarterly eDACCA as the proxy. The individual certifying the quarterly eDACCA is responsible for reviewing and confirming that changes reflected on the quarterly DACCA were made in eSDS prior to certification. The DLC administrator keeps on file the signed Quarterly DACCA on which the certifier/cost object supervisor has indicated changes.
Option 2 – eDACCA Certifier Reviews Monthly DACCA
- The DLC administrator mails a paper copy of the monthly DACCA to the eDACCA certifier/cost object supervisor. The certifier, who has direct knowledge of those working on the project, indicates any changes in salary distribution, including any additions/deletions of individuals, signs and dates the paper DACCA and returns it to the DLC administrator.
- The DLC administrator makes the changes in eSDS as these monthly DACCAs are received. During the period October 1 - December 31 for the first quarter DACCA, the DLC administrator electronically certifies the quarterly eDACCA as the proxy. The individual certifying the quarterly eDACCA is responsible for reviewing and confirming that changes reflected on the monthly DACCAs were made in eSDS prior to certification. The DLC administrator keeps on file the signed monthly DACCAs on which the certifier/cost object supervisor has indicated changes. The DLC administrator does not distribute either the quarterly DACCA to the certifier/cost object supervisor.
- The DLC administrator distributes monthly DACCAs for informational purposes to certifiers/cost object supervisors, but sends the quarterly DACCA for the cost object supervisor to annotate changes, sign and date.
NOTE: This is not a preferred option. We recommend that cost object supervisors receive DACCAs only once (either monthly or the quarterly version) to indicate changes, sign and date. The DLC administrator is then responsible for making and verifying these changes.
Email as Backup for Certification by Proxy
- There may be times when the certifier is not in close proximity to the proxy, either because one or both are off campus or because they are located in MIT buildings separated by distance, and approval to certify by proxy is urgently needed to meet quarterly certification guidelines. In these instances and on an exception basis, an email from the certifier to the proxy may be used as backup to support proxy certification. When the email is used as backup for this purpose, the following wording should be included in the email:
In regards to Q1 (or Q2, Q3, Q4) DACCA for cost object 1234567, I have reviewed the information contained in the DACCA. I certify the charges are correct, with any exceptions communicated to my DLC administrator, in accordance with the Institute's certification policies.
- Alternatively, the certifier can sign and date the DACCA and email a scanned electronic version of the signed DACCA to the proxy.
- Paper backup to support certification by proxy must be easily retrievable for audit purposes. It is recommended that documentation be retained in a centralized manner for all cost objects within the DLC rather than within individual cost object or supervisor files.
- Electronic backup to support proxy certification must also be easily retrievable for audit purposes. DLCs must either retain this documentation in electronic format in a centralized manner such as on a server that is regularly backed up, or retain printed versions of appropriate documentation with original signed DACCA files. Storage of email on individual computers alone is not adequate.