Effort Reporting (Policy No. 200.0)
October 6, 2014
Version # / Revision Date:
Office of the Vice President for Research and Office of Sponsored Projects
Office of the Vice President for Research
The Office of Management and Budgets’ (OMB) Uniform Guidance: Cost Principles, Audit, and Administrative Requirements for Federal Awards includes regulatory requirements for the planning, confirmation, and certification of effort associated with Federal organized research projects and other activities. Effort directly charged to sponsored projects and any mandatory cost shared effort (i.e. committed effort that is not directly charged to the award) must be identified in the University’s effort distribution/reporting system.
The principles that govern how the University must document time and effort on federal awards are in OMB Uniform Guidance. The Uniform Guidance requires each grantee to maintain a system of distributing salary charges to federal awards that results in a reasonable allocation of salary charges to each award. The salary distribution system also must include a periodic review to confirm the reasonableness of salary charges to the federal projects.
The University employs an After-the-Fact effort reporting system that provides the principal means for certifying that the salaries charged or contributed to sponsored projects are reasonable and consistent with the portion of total professional activity committed to the projects.
The following categories of University employees are certified on University generated reports:
1. All faculty, graduate students, and administrative and professional employees paid on sponsored projects (Frequency - Semi-annually)
2. Non-exempt support staff, undergraduate students, and limited duration employees paid on sponsored projects (Frequency - Monthly)
Brown University’s Position on Implementing – Effort Reporting Policy
The University receives significant funding for sponsored projects from federal and state governments, private foundations, organizations, and industry. There must be accurate effort planning and confirmation when these funds are expended for salaries and wages.
Effort certification is required by Federal regulations (Office of Management and Budget’s Uniform Guidance) for all compensation costs charged to federal sponsored awards. In order to be compliant with these regulations, the University is required to have a system in place for certifying the allocation of salaries and wages associated with sponsored projects.
Purpose of Policy
The purpose of effort reporting is to provide a reasonable basis for distributing salary charges among direct activities (e.g. sponsored projects and non sponsored activities such as instruction and administration). OMB Uniform Guidance requires that the University document the distribution of activity to each individual sponsored project, including any cost shared effort (i.e. committed effort that is not directly charged to the award).
Method of Reporting
At the beginning of each fiscal year and/or budget year salaries and wages are planned and distributed to various activities based on an individual’s expected effort (i.e. effort commitment proposed in sponsored project budget). Effort distributions should be reasonable estimates of activities, recognizing that research, instruction, and clinical activity are often inextricably intertwined and estimates will be necessary in most cases.
This effort distribution is normally accomplished by the cost center manager, in consultation with the Principal Investigator. The effort distribution must be adjusted in a timely fashion for significant changes in effort when they become known. If you have any questions please call OSP.
The effort planning and confirmation system must only reflect the activity (research, teaching, administration, and any other activity) for which the investigator or employee is compensated by the University. External activities such as consulting or non-university (professional) committees are not to be included.
We are required to record effort as a percentage of total activities (i.e. teaching, research, administrative, including chairmanships and committee work based on job at Brown University and compensated by Brown University, etc.) not as hours worked. Therefore, all of an employee’s compensated activities must be reported in percentages of 100% regardless of the appointment FTE.
Effort certification and labor distributions are not the same thing.
Labor distributions (based on compensation) represent an initial estimate of how effort is expended and serve as a convenient document in support of activities on which the individual worked.
The effort certification process is a method for confirming charges made to sponsored awards. This is done by reviewing, updating and preparing salary reallocations, if necessary, making appropriate changes to the effort reports, and certifying time and effort certification reports.
Individuals are not always paid from individual sources in direct proportion to the amount of activity provided to support that sponsor or account. If actual effort on grant is greater than salary charged, and it is mandatory cost sharing, that cost shared effort must be captured on the Workday Effort Reporting system via the use of designated funds.
Department administrators develop an effort plan for each individual at the beginning of each fiscal year or grant budget period. Departments are responsible for periodically reviewing effort distribution for appropriateness and accuracy of effort expended on all projects. It is recommended that the review be done monthly or no less frequently than quarterly.
- OMB Uniform Guidance requires adjustments to salary allocations in response to significant changes in work activity.
- Failure to adjust salary allocations in a timely manner will result in errors to salary charges to grants, leading to over/under recovery of salaries.
Modify the WorkDay System for any prospective changes. Submit a Payroll Accounting Adjustment (PAA) for any retroactive changes in effort. Contact the Effort Certification Manager (OSP). If already certified, your existing effort report will need to be canceled and a new effort certification report generated and recertified in order to capture the PAA. Once an Effort Report has been certified in WD, no further adjustments to that individual’s distribution of effort are allowed unless approved by the OSP.
- Changes to previously certified effort erode the credibility of the certifier as well as the entire effort certification process.
Changes to a certified effort form are not allowed except in limited circumstances, which require the following:
- Sufficient documentation that supports allowability and allocability, and why the effort was originally certified incorrectly, and
- Approval of the Director of Sponsored Projects or designee.
Reallocations are considered cost transfers and must be in compliance with the University’s Cost Transfer Policy.
Who is Required to Complete Effort Certification Reports
Individual effort reports are required for all faculty, graduate students, and administrative and professional employees, undergraduate students, non-exempt and limited duration employees paid on sponsored projects.
An effort report for all faculty, graduate students, and administrative and professional employees is requiredto be completed for the semi-annual (January 1 – June 30) and (July 1- December 31) in which a portion of their salary is charged to a sponsored project.
An effort report for undergraduate students, non-exempt and limited duration employees, who have all or a portion of their salary charged to a sponsored project is required to be completed on a monthly basis (by pay period)
The effort report must represent, in percentages totaling 100%, a reasonable estimate of an employee’s University compensated effort for the period.
Verification & Sign-Off
All nonexempt, undergraduate, exempt workers and faculty are required to certify their own effort except in limited circumstances that need to be documented and approved by OSP. Principal Investigators are required to certify effort for graduate students.
NIH Salary CAP
Certain sponsors impose a limit or “cap” on the annual rate of salary reimbursement. Nevertheless, investigators must still devote the full committed effort as proposed and awarded without regard to the salary reimbursement limitation.
NIH Salary Cap Web Site: http://grants.nih.gov/grants/policy/salcap_summary.htm
Effort reports for individuals earning in excess of the capped amount must reflect the difference between the cap and the actual salary. For additional information see the specific guidelines developed and published by OSP for calculating and reporting that effort.
Mandatory Cost Sharing
Mandatory Cost Sharing must be reported. Where some or all effort an individual expends on a specific sponsored research project is not funded by the project sponsor but is mandated by the sponsor or where the individual has clearly committed to uncompensated effort to the project in the application, that effort must be reported as unfunded activity (cost sharing). Mandatory cost sharing is tracked via the WD Effort Reporting system and captured through the use of designated funds.
Report Distribution/Follow-Up/Filing & Archiving
OSP is responsible for the electronic distribution, collection and retention of all effort reports. Individually reported data will be made available by OSP only to authorized auditors.
Effort Certification Reports are to be certified by the Principle Investigator or worker within 30 days of being generated by the Office of Sponsored Projects.
The University understands there may be exceptional circumstances that will warrant an extension.
If an extension is needed the reason for the extension must be documented and approved by the Director of OSP in advance of deadline.
Excessive disregard for the policies could lead to disallowed costs on sponsored projects that would need to be absorbed by the department.
First Delinquent Notification:
The first business day following the due date, the first delinquent notification process begins unless an approved extension is on file.
A delinquency memo will be attached in an email, from the Effort Certification Manager to the Department Chair, with a copy to the Effort Certification Partner to remind them that the ECRs are overdue and request the ECRs be completed within 5 business days.
Second Delinquent Notification:
If 5 business days have passed since the first delinquent notification was sent and the delinquent ECRs have not been returned and there has been no approved extension request on file, a second delinquent notification will be sent to the department chair/director.
Third Delinquent Notification:
If 10 business days have passed since the second delinquent notification was sent and the delinquent ECRs have not been returned and there has been no approved extension request on file, a third delinquency notification will be sent.
FILING OF EFFORT CERTIFICATION REPORTS
All ECRs are kept online within the WD Effort Reporting System.
Cost Sharing: A portion of total sponsored project/program costs not funded by the sponsor. Cost sharing is further classified as either mandatory or voluntary:
Mandatory Cost Sharing of Effort
Required by the sponsor
Identified or quantified in proposal
Condition of receiving the award
Represent binding commitments that must be captured and documented
Note: Sponsor “encouraged” cost sharing is not required as a condition of receiving an award and does not constitute mandatory cost sharing.
Voluntary Cost Sharing of Effort – further classified as either committed or uncommitted:
Not required by the sponsor
Identified or quantified in proposal
Condition of receiving the award
Represent binding commitments that must be captured and documented
Voluntary Uncommitted Cost Sharing of Effort
- Not funded by the sponsor
- Not committed in the proposal or in any other communications to the sponsor
Effort: The proportion of time spent on activities related to a Principal Investigator's or employee's dutie s, for which university compensation is received. Total effort must always equal 100%. External activities such as consulting are not included.
Effort Certification: The process by which the employee asserts in writing the correctness of employee % of effort.
Proposed Effort: The amount of effort (in %) in any sponsored project application, regardless of whether salary support is requested.
Awarded/Committed Effort: The amount of effort (in %) promised by the University in the proposal or the awarded effort (in %) included in award documentation.
Labor Distribution: An allocation of one's efforts to specific general ledger accounts. The general ledger documents effort in the university's books and records. Note: Labor distribution requires a conversion of time (i.e., effort) to dollars (i.e., compensation).
Roles and Responsibilities
The major responsibilities each party has in connection with the University’s Effort Reporting Policy are as follows:
Effort Certification Partner
1. Responsible for reviewing, changing (if necessary) and submitting electronic effort certification reports.
2. Establish effective processes and controls to ensure compliance with this policy.
3. Ensure accurate planning and confirmation of effort, including cost sharing.
4. Assume to oversee the effort planning and confirmation process.
5. Ensure payroll is in line with certified effort by completing salary reallocations; updating WD with a worker’s costing information, and documenting cost sharing.
Principal Investigator and Workers
1. Ensure appropriateness and accuracy of effort expended on sponsored projects.
2. Provide updates to effort distributions, as changes become known.
3. Review, send back (if necessary), and certify effort reports.
Office of Sponsored Projects
1. Develop and implement effort reporting policies, procedures, and training in accordance with the regulations set forth in OMB Uniform Guidance.
2. Develop and deliver appropriate effort reporting training sessions.
3. Electronically generate/distribute effort certification reports for all employees identified as expending effort on sponsored projects.
4. Reconcile costed changes made to effort certification reports to Payroll (adjustments).
5. Monitor the effort planning and confirmation process to ensure compliance with the University’s Effort Reporting Policy.
6. Review effort reports to ensure reports are reviewed and accurately completed and returned to OSP on a timely basis.
7. Report questionable practices and recurring problems to the Associate VP for Research and the Director of Internal Audit.
8. Work with external auditors as they monitor the University’s compliance with effort reporting regulations.
1. Independently evaluate compliance with effort reporting requirements.
Proposal Stage- Policy and Procedure
Award Stage – Policy and Procedure
Effort Certification Reports & Cost Share
Effort Certification Administrator
Version 1 - New procedure – 9/30/14
The official version of this information will only be maintained in an on -line web format. Any and all printed copies of this material are dated as of the print date. Please make certain to review the material on-line prior to placing reliance on a dated printed version.
Appendix A – Salary CAP
NIH and certain other sponsors limit the salary that can be charged on awards. In cases where salary exceeds the cap, the salary charged to the sponsored project must be prorated with respect to the cap. The effort report must be modified to reflect actual effort. If you have any questions please contact OSP or BMRA.
a. If the cap were $175,700 annually and the individual spends 50% effort on the project during the Spring, the maximum salary that can be charged to the project during the semester is $43,925 (50%x175,7 00/2).
b. Cap cost sharing must be reflected on the effort report. When the salary is greater than the cap, effort will be greater than the pay distribution on the effort report for that award.
i. Assume cap is $175,700, salary is $195,000, committed effort is 47%, and actual effort is 50%.
ii. Salary to be paid from award = 42%; the effort report will only show the 42% effort charged to the award.
iii. Cost shared salary = 5%; this effort needs to be documented and certified.
For additional information please visit the NIH salary cap website
To determine the maximum amount of salary that can be charged under the NIH cap see the Salary Cap Worksheet