Effort Reporting Fundamentals

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Effort Reporting Fundamentals

• Bob Hartley, Comptrollers Office
• Trish Lowney, OSP
• Jan 31, Feb 1, Feb 2, 2007

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Learning Objectives

• What is effort reporting
• Why is it necessary
• What will be changing at SU
• How can you get prepared

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Context

• Personnel costs 60 of sponsored expenditures
• A-133 audits (strategy the Govt uses to ensure
  its funds are appropriately and fairly used) have
  never found problems with personnel costs
• Agency Inspectors General felt this was not
  reasonable
• Started their own investigators.

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Health Human Services Audits

• Dept of Justice effort-settlements under False
  Claims Act
• Northwestern - 5.5M
• Johns Hopkins - 2.6M
• Harvard - 2.4M
• Cornell - 4.4M
• Mayo Clinic - 6.5M
• Univ Alabama, Birmingham - 3.4 M
• Etc etc

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NSF Audits of Effort Reporting

• On-going
• University of Pennsylvania
• Cal Tech
• Vanderbilt
• .

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What is effort reporting?

• Strategy to confirm that effort promised on a
  sponsored award has actually been delivered.
• Effort certified is reasonable reflection of
  actual work performed in the context of all
  institutional responsibilities (i.e. proportion
  of 100 effort).

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Definitions

• Effort. Activities related to the employees
  responsibilities or duties for which compensation
  is received from the University.
• Effort is not linked to hours worked but is a
  proportion of total hours worked.
• Institutional duties might include teaching,
  research, service, administration

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Definitions

• Committed Effort. Proportion of effort explicitly
  devoted to a sponsored activity.
• 100 effort is the total effort expended by an
  employee in the performance of institutional
  duties.
• All effort (activities) must total 100, even
  though the appointment may be less than 1 FTE.

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Definitions

• Effort distribution. The allocation of ones time
  to various activities. Distribution likely will
  vary within and across departments..
• 25 Project A
• 25 Project B
• 40 Teaching
• 10 Service
• Admin
• 100 effort

Sponsored Activities 50

Institutional activities 50 Includes grant
writing, which is not allowed as a direct cost.
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Example Effort Distribution
5
28.5
15
28.5
40
3.6
10.7
28.5
40
Considerations Overcommitted? Sponsored
Approval Required?
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Definitions

• Effort certification. Documentation by individual
  or someone with suitable means of verification
  (direct knowledge) that effort reported is a
  reasonable reflection of work performed.
• Associated costs charged represent actual costs.

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Why is it necessary?

• Condition of receiving federal funding
• Federal regulations
• Office of Management and Budget (OMB) Circular
  A-21
• http//www.whitehouse.gov/omb/circulars/a021/a21_2
  004.html
• j. 10. Compensation for personal services.
• Other regulations OMB A-110, A-133, etc
• Feds want to know
• They got what was promised
• They got what they paid for
• They didnt get harmed

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Where when is effort committed?

• When applications or proposals are submitted
• Budget and budget narrative
• PI will devote 25 academic year and 100 summer
  effort to the project. Only summer effort will
  be charged to the grant. Cost-sharing
• Project coordinator will devote 50 effort
  throughout the calendar year
• 1 summer-month support is requested

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Written promise becomes condition of award.

• UNLESS explicitly modified and documented during
  agreement negotiations.
• NOTE all federal grant proposals now
  requesting effort person months.
• State in budget narrative that effort will be
  distributed over academic year or summer

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The Regulations require that

• Adhere to all applicable federal regulations
• and
• An institution adhere to its own policies

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For personnel compensation on awards, the Regs
require that

• Effort, both Sponsored Institutional,
  associated with work are to be confirmed by the
  employee
• In some cases effort may be confirmed by
  responsible person with suitable means of
  verification that the work was performed
• Faculty will certify their own effort

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For personnel compensation on awards, the Regs
require that

• Costs charged represent actual costs
• Charges to a sponsored award or institutional
  account associated with effort reported were
  fairly made, accurate and recorded in a timely
  manner

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Effort reporting

• Based on payroll records and other subsidiary
  records
• Distinguish Sponsored activities from
  Institutional activities
• Reasonably reflect all activities for which
  employee is compensated Effort Distribution
• Encompass both sponsored and all other activities
  on an integrated basis (incidental work need not
  be included.) 100 effort

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The Regulations require that

• Direct charges to sponsored agreements may
  originally be based on estimates. However, costs
  charged must be actual costs.
• When estimates are used, significant changes in
  the corresponding work activity must be
  identified and entered into the payroll
  distribution system.
• Short term (1 or 2 months) fluctuation between
  workload categories need not be considered as
  long as the distribution of salaries and wage is
  reasonable over the longer term, such as academic
  period
• Independent internal evaluation is possible (and
  is conducted) to ensure effectiveness and
  compliance

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Regulations require

• A defined methods to assure that requirements
  fulfilled
• SUs method Plan Confirmation

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Plan Confirmation

• A strategy that includes
• An effort plan (e.g. budgeted, planned or
  assigned work activity) updated to reflect any
  significant changes in work distribution
• Effort certification, a statement signed at least
  annually by the employee, PI or a responsible
  official using suitable means of verification.
• Statement Work was performed and that the
  salaries and wages charged are reasonable in
  relation to work performed.

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Whats coming to SU?

• New process for effort certification
• Faculty and other exempt employees must certify
  their own effort
• Per regulations, frequency of certification will
  vary with employee status (exempt/non-exempt)
• Procedures are under development
• Phase 1 paper
• Phase 2 electronic

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Phase 1

• Paper effort certification by exempt employees
  for semester and summer effort, starting with
  Fall 06.
• What about non-exempt staff ? reliance on time
  sheets acceptable.
• PI or other individual with suitable knowledge
  must be signing time sheets. Time sheets should
  include statement I certify that hours reported
  reflect actual work performed for project
  charged. For students working on more than one
  sponsored project, separate time sheets should
  be filed
• Phase 1 will continue until Phase 2 implemented

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Phase 1 Proposed Implementation plan

• Payroll Distribute effort certification reports
  to budget managers Target Feb 28
• Budget managers distribute to PIs exempt staff
  in their area
• PI/faculty review
• If acceptable as is sign/certify, return to
  budget mngr
• If change needed report change on form,
  sign/certify, budget mngr
• Budget manager ? submit PAR
• Contract Accounting adjust charges
• All certifications to be returned by March 31
  (target)

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Immediate preparation

• The PI with budget manager should review ALL
  sponsored award documents
• What effort was committed in award(s)?
• Budget and/or budget narrative, OSP file copy
  budget (person-months)
• Contact OSP for assistance
• Is effort for all sponsored projects reflected in
  payroll system?
• If not add as institutional cost-sharing (AY
  only)
• What is being charged to the grant Payroll data
• Translate back to percent Percent Effort
  Charged
• PI/Faculty reflects is effort reasonable in
  context of all duties?
• Committed Effort actual effort compensation,
  all okay
• Committed Effort ? actual effort compensation,
  action necessary

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Immediate Fixes

• If what was worked is greater than committed
  effort
• Voluntary uncommitted cost-sharing is not
  required to be documented.
• Issue - are institutional commitments being met?
  Risk of over commitment?
• If what was worked is less than committed effort
• Adjust charges via PAR
• Effort worked is 25 less than what was
  committed, sponsor approval likely required
  contact OSP (e.g. 40 ? 30)
• If all obligations may exceed 100
• Contact OSP
• PARs will likely be needed.

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Other Issues under Review

• Point Feds pay only for allowable costs,
  activities directly benefit sponsored award.
• Employees who are 100 on Sponsored
• Review duties and responsibilities (Leadership vs
  technical)
• Discuss with supervisor if institutional
  activities identified in past semester (i.e.
  grant writing)
• 100 summer effort
• Institutional duties not allowable
• Reflection how does this activity/task advance
  the goals/objectives of the sponsored project?
• No faculty vacation
• Summer - NIH salary cap

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Phase 2 Electronic Concept for Plan
Confirmation

• Faculty, exempt staff Explicit plan signed by
  PI, Chair, Dean
• January each year
• Reflect pct of institutional effort available for
  sponsored programs
• Any change (e.g. new award)? certified by
  individual
• If threshold for sponsored programs exceeded,
  need new plan signed by PI, Chair, Dean
• Scheduled certifications will occur following
  each semester
• Reflection this is what I did, this is what I
  will do moving forward

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Summary Effort reporting

• Deliver what was promised
• Documentation
• Direct knowledge
• Reasonable reflection of effort worked
• Actual costs charged

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Questions Suggestions

• Please share comments, thoughts suggestions to
• Bob Hartley rfhartle_at_syr.edu
• Trish Lowney plowney_at_syr.edu
• Please contact us if youd like a small group
  session