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Effort Reporting –Rising Above the Challenge

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Page 1: Effort Reporting –Rising Above the Challenge.  OMB Circular A-21 Cost Principles for Educational Institutions  OMB Circular A-110 Uniform Administrative

Effort Reporting –Rising Above the Challenge

Page 2: Effort Reporting –Rising Above the Challenge.  OMB Circular A-21 Cost Principles for Educational Institutions  OMB Circular A-110 Uniform Administrative

OMB Circular A-21 Cost Principles for Educational Institutions

OMB Circular A-110 Uniform Administrative Requirements for Grants

& Agreements with Institutions of Higher Education, Hospitals and

Other Non-Profit Organizations

Tennessee Code Annotate

Sponsor Terms and Conditions

TBR Policies and Guidance

Institutional Policies and Procedures/Practices

Sponsored Programs Policies and Procedures

A Guide to Managing Federal Grants

Legal Guidance

Page 3: Effort Reporting –Rising Above the Challenge.  OMB Circular A-21 Cost Principles for Educational Institutions  OMB Circular A-110 Uniform Administrative

The proportion of time spent on any activity and

expressed as a percentage of the total

professional activity for which an individual is

compensated.

Restated:

Effort is how someone spent or expended their time.

What is Effort?

Page 4: Effort Reporting –Rising Above the Challenge.  OMB Circular A-21 Cost Principles for Educational Institutions  OMB Circular A-110 Uniform Administrative

When writing a proposal, the amount of time expressed in dollar amounts or percentages (effort) has to be tracked and verified throughout the life of the award whether salary is charged directly, indirect or not at all to the grant.

$50,000 salary- request $10,000 =20% effort commitment.

$69,000 salary- commits 20% = $13,800 allowable charge to the grant

Proposal Creation & Effort Reporting

Page 5: Effort Reporting –Rising Above the Challenge.  OMB Circular A-21 Cost Principles for Educational Institutions  OMB Circular A-110 Uniform Administrative

Council of Government Regulation (COGR) definition of effort reporting

“Effort reporting is the mechanism used to confirm that salaries and wages charged to each sponsored agreement are reasonable in relation to the actual work performed. Certification of an effort report must reasonably reflect the activities for which the employee is compensated by the institution.”

What is Effort Reporting?

Page 6: Effort Reporting –Rising Above the Challenge.  OMB Circular A-21 Cost Principles for Educational Institutions  OMB Circular A-110 Uniform Administrative

Anyone charged to a federal award must certify

that the salary paid or the commitment

proposed is reasonable in relation to the effort

(activity) devoted to the award.

This includes individuals shown as match to

federal awards and those with unpaid

commitments.

Who Must Report Effort?

Page 7: Effort Reporting –Rising Above the Challenge.  OMB Circular A-21 Cost Principles for Educational Institutions  OMB Circular A-110 Uniform Administrative

NOT based on 37.5 hour work week

Based on the total amount of time needed to perform the activities for which one is compensated by the institution including:

- Sponsored project activities

- Non-sponsored project activitiesoAdministration (including duties as chair, dean,

etc)

How is Faculty Effort Determined

Page 8: Effort Reporting –Rising Above the Challenge.  OMB Circular A-21 Cost Principles for Educational Institutions  OMB Circular A-110 Uniform Administrative

IBS is annual compensation paid by the college for an employee’s appointment.

The institution must establish what is included in the base salary of each employee.

JSCC IBS for faculty includes: instruction, office hours, advising, committee service, curriculum development, faculty development, public service and research

Institutional Base Salary (IBS)

Page 9: Effort Reporting –Rising Above the Challenge.  OMB Circular A-21 Cost Principles for Educational Institutions  OMB Circular A-110 Uniform Administrative

If you work 60 hours a week, 30 hours

represents 50% effort

If a lab assistant works 20 hours a week, the

20 hours represents 100% effort

For Example

Page 10: Effort Reporting –Rising Above the Challenge.  OMB Circular A-21 Cost Principles for Educational Institutions  OMB Circular A-110 Uniform Administrative

In a typical week Professor Y estimates that she works 54.5 hours.

Effort Example… (cont’d)

Sponsored Project A(Federal)

10

Sponsored Project B(Foundation)

7

Instruction/office 30

Committee and Other admin

7.5

Total 54.5

Page 11: Effort Reporting –Rising Above the Challenge.  OMB Circular A-21 Cost Principles for Educational Institutions  OMB Circular A-110 Uniform Administrative

Circular A-21 requires that institutions

receiving federal awards maintain

procedures documenting the distribution of

activity, and associated payroll charges, to

each sponsored agreement.

Why Must Effort Be Certified?

Page 12: Effort Reporting –Rising Above the Challenge.  OMB Circular A-21 Cost Principles for Educational Institutions  OMB Circular A-110 Uniform Administrative

Signed effort reports are considered legal documents in

which an individual attests to the accuracy of the effort

spent on sponsored projects

Erroneously certifying effort reports can be viewed as fraud

We are obliged by federal regulations to exercise good

stewardship of those funds

1.) Effort is a part of that stewardship

2.) Personnel costs are the majority of research costs

False Claims Act, 31 U.S.C., sections 3729 & 3721

Why Should We Care

Page 13: Effort Reporting –Rising Above the Challenge.  OMB Circular A-21 Cost Principles for Educational Institutions  OMB Circular A-110 Uniform Administrative

Difference between effort reporting and

payroll distribution….

• Effort reporting is how you spent your time

• Payroll distribution is how you are paid

• Effort drives the payroll distribution

• Payroll distribution does not drive the effort

certification

Effort Reporting vs. Payroll Distribution

Page 14: Effort Reporting –Rising Above the Challenge.  OMB Circular A-21 Cost Principles for Educational Institutions  OMB Circular A-110 Uniform Administrative

Estimate of weekly hours spent on sponsored project % of effort = on

Total hours in an average work week Sponsored

Project

Example… (cont’d)

Page 15: Effort Reporting –Rising Above the Challenge.  OMB Circular A-21 Cost Principles for Educational Institutions  OMB Circular A-110 Uniform Administrative

When Professor Y certifies her effort, it should be reasonably estimated as follows:

Effort Example

Sponsored Project A(federal)

10 18%

Sponsored Project B(foundation)

7 13%

Instruction/office 30 55%

Committee and other admin

7.5 14%

Total 54.5 100%

Page 16: Effort Reporting –Rising Above the Challenge.  OMB Circular A-21 Cost Principles for Educational Institutions  OMB Circular A-110 Uniform Administrative

18%

13%

69%

Percentage

Sponsored Proj ASponsored Proj BInstituition Com-mitment

Effort Example… (cont’d)

Page 17: Effort Reporting –Rising Above the Challenge.  OMB Circular A-21 Cost Principles for Educational Institutions  OMB Circular A-110 Uniform Administrative

Note: It is on rare occasions that University’s and

College’s charge extra compensation, above IBS, to

federal awards. Such cases should occur only when:

◦ Work crosses departmental lines or

◦ Involves a separate or remote operation and

◦ Work is in addition to regular department load and

◦ Specifically provided for in the agreement and approved in

writing by sponsoring agencyCircular A-21 section J(10) d

Effort Reporting and Extra Compensation

Page 18: Effort Reporting –Rising Above the Challenge.  OMB Circular A-21 Cost Principles for Educational Institutions  OMB Circular A-110 Uniform Administrative

Professor Y submits another proposal The new project will be require 5 hours,

every weekend, for 15 week.

Effort Example

Sponsored Project A(federal)

215 26%

Sponsored Project B(foundation)

109 13%

Sponsored Project C(federal) Extra Comp

75 9%

Instruction/office/other 432 52%

Total 831 100%

Page 19: Effort Reporting –Rising Above the Challenge.  OMB Circular A-21 Cost Principles for Educational Institutions  OMB Circular A-110 Uniform Administrative

All 3 criteria must apply for a cost to be charged directly to a federal project:

• The cost must be allowable under both the provisions of A-21 AND under the terms of a specific project

• The cost must be allocable, meaning it can be associated to a project with a high degree of accuracy

• The cost must be reasonable, meaning it reflects what a “prudent person” would pay in like circumstances

Cost Allowability

Page 20: Effort Reporting –Rising Above the Challenge.  OMB Circular A-21 Cost Principles for Educational Institutions  OMB Circular A-110 Uniform Administrative

Salaries and wages charged inappropriately to sponsored

projects

Employees not being properly trained

Reports not certified in timely manner

Missing or incomplete documentation that serves as “suitable

means for verification” of effort

Weakness in the reporting system

Effort certified by individuals with insufficient knowledge of the

work performed

Effort Reporting Common Finding:

Page 21: Effort Reporting –Rising Above the Challenge.  OMB Circular A-21 Cost Principles for Educational Institutions  OMB Circular A-110 Uniform Administrative

Northwestern University- $5.5 million

South Florida - $4.1 million

University of California - $2.1 million

John Hopkins University – $2.6 million

University of Connecticut - $2.5 million

Audit Disallowance Cases

Page 22: Effort Reporting –Rising Above the Challenge.  OMB Circular A-21 Cost Principles for Educational Institutions  OMB Circular A-110 Uniform Administrative

www.whitehouse.gov/omb/circulars_default

www.tennesseeanytime.org/laws/laws.html

www.gpoaccess.gov/cfr/

www.tbr.edu

Websites

Page 23: Effort Reporting –Rising Above the Challenge.  OMB Circular A-21 Cost Principles for Educational Institutions  OMB Circular A-110 Uniform Administrative

Celebrating Success As A Team