effort reporting –rising above the challenge. omb circular a-21 cost principles for educational...
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Effort Reporting –Rising Above the Challenge
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
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?
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
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?
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?
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
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)
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
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
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?
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
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
Estimate of weekly hours spent on sponsored project % of effort = on
Total hours in an average work week Sponsored
Project
Example… (cont’d)
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%
18%
13%
69%
Percentage
Sponsored Proj ASponsored Proj BInstituition Com-mitment
Effort Example… (cont’d)
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
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%
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
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:
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
www.whitehouse.gov/omb/circulars_default
www.tennesseeanytime.org/laws/laws.html
www.gpoaccess.gov/cfr/
www.tbr.edu
Websites
Celebrating Success As A Team