Effort Certification
Your Presenters:
Maggie Griscavage, University of Alaska
Fairbanks
Allison Weber, Los Angeles Biomedical
Research Institute
Michelle Dondanville, University of Alaska
Fairbanks
THE FEDERAL REQUIREMENT OF
ACCOUNTING FOR YOUR WORK ON
THEIR DIME!
The legal stuff…
(A-21) 2CFR220, J.10.c.(2)(a)-(f)
(b) These reports will reflect an after-the-fact reporting of the
percentage distribution of activity of employees. Charges may be made initially on the basis of estimates made before the services are performed, provided that such charges are promptly adjusted if significant differences are indicated by activity records.
(c) Reports will reasonably reflect the activities for which employees are compensated by the institution. To confirm that the distribution of activity represents a reasonable estimate of the work performed by the employee during the period, the
reports will be signed by the employee, principal investigator, or responsible official(s) using suitable means of verification that the work was performed.
What it really means:
•
The reporting and confirmation of your time spent
conducting any university activity that typically is
expressed as a percentage of the total
institutional compensated based time
(Institutional Based Salary (IBS))
OR
•
If you work on a sponsored project, you must
certify you spent the percentage you said you
would.
Definition
Effort:
Work or the proportion
of time spent on any
activity and expressed
as a percentage of
University time.
It does not equate to a
40 hour week, or a fixed
number of hours – it’s a
“%” of your base salary.
Activities included in effort tracking
• Externally sponsored research – including special lectures
on the project, appropriate seminars, consulting with graduates, attending meetings pertinent to the project.
• Departmental/University research – uncompensated
participation in study sections, peer review of
manuscripts, unfunded effort on externally sponsored research.
• Instruction/university supported academic effort –
presentations to students, mentoring, participation in resident training.
• Administrative effort – duties such as departmental chair,
When the effort is not for the institution.
• Example, an investigator does consulting for another
institution that will be paid directly to the researcher by the other institution (i.e. not through a subaward to our
institution). There is general confusion on when and how researchers should consult, so it does not surprise me that effort reporting confusion is also involved.
•
What is Effort?
• Effort vs. payroll charges • Proposed vs. actual effort
•
Who can Certify?
• Effort reports will be signed (certified) by the employee,
principal investigator, or responsible official(s) using suitable means of verification that the work was
performed. (J.10.c.(2)(c))
When a researcher takes on "incidental"
responsibilities
• . Example: someone with a research faculty appointment
who generally only does research agrees to teach a class as an adjunct. As you know, J.10.a. says "Incidental work (that in excess of normal for the individual), for which
supplemental compensation is paid by an institution under institutional policy, need not be included in the payroll
distribution systems described below, provided such work and compensation are separately identified and
documented in the financial management system of the institution."
Effort Certification
• Required by A-21/2CFR220 (Section J.10)(actually does
not mention “effort reporting”)
• Certifies that salaries and wages charged to sponsored
agreements are reasonable in relation to the work performed.
• Certifies that expended effort meets the commitments
made in the project proposal, even if the person was not paid from project funds.
Types of Effort Reporting
• Plan Confirmation
Salaries distributed based on budgeted, planned or assigned activity.
• After-the-Fact Activity Records
Salaries distributed are supported by activity reports (payroll records).
• Multiple Confirmation Records
Salary distribution supported by records which verify separately direct and F&A activities.
Quick Quiz…
TRUE OR FALSE??
Administrative employees can
always be charged to federal
sponsored programs.
What is the reasonable estimate of effort?
•
Sponsors recognize that the activities
constituting effort are often difficult to
separate. Effort certification must often rely
on a reasonable estimate of effort, and when
estimating, a degree of tolerance (e.g., up to
10% = +/‐ 5%) is appropriate.
Definition
Certify:
Assert, in writing, the
correctness of
employee percent of
effort either by utilizing a
time sheet or a separate
effort certification
An ‘allowable’ amount of effort
• An “allowable” cost is one that is eligible for
reimbursement by the federal government.
Contrast with:
• PERMISSIBLE BY INSTITUTION: A cost is permitted by institution, as outlined in its various administrative procedures.
• ALLOWABLE BY AGENCY: A cost is permitted by the
terms of the sponsoring agency.
• An "unallowable" cost is one that is not eligible for reimbursement by the federal government.
An ‘allowable’ amount of cost
•
An allowable cost must be:
• Reasonable: A prudent business person would have
charged this amount.
• Allocable: It can be assigned to the activity on some
reasonable basis.
• Consistently Treated: Like costs must be treated the
same in like circumstances, as either direct or F&A costs.
• Conform to Terms: In A-21/2CFR220 or the Sponsored
Agreement.
•
Cost must meet all four standards to be
Is it allocable to my grant?
•
A cost can be allocable as a direct or an indirect
cost
•
A cost is allocable as a direct cost if the goods or
services provided are assignable in accordance
with the relative benefits received….
• It is incurred solely to advance the work under the
sponsored agreement
• It benefits both the work under the sponsored
agreement and other work of the institution in proportions that can be approximated
So, what’s a good amount to charge?
• A cost is reasonable if …
The nature of the good or service and the amount involved reflect the action of a prudent person.
• Considerations in determining reasonableness:
• Necessary for the performance of the sponsored
agreement;
• Determined by arm’s length bargaining of a prudent
person;
• In accordance with the sponsored agreement terms and
conditions;
• Consistent with established institutional policies and
Why certify?
•
Well… because the
regulations require it, ….
•
“the reports will be
signed by the employee,
principal investigator, or
responsible official(s)
using suitable means of
verification that the work
What if I don’t??
Severe penalties
and funding
disallowances could
result from
inaccurate (False
Claims), incomplete,
or untimely effort
reporting
Personal Services Reporting…
•
Some of the particular problems identified:
• Inadequate cost transfer documentation
• Cost Transfers after the grants were closed
• Time promised in proposal did not match actual effort
• Allegations of charging over expenditures to other grants • Improperly transferred expenses between grants
• Accounting System unable to monitor and manage
charges
• Allegations that grant funds were used to pay salaries of • employees not associated with research grant
Personal Services Reporting
• Audit findings• Notable Settlements at Other Institutions Effort (Personal Services) Reporting and Administrative
Expenses Charged as Direct Costs
• -Johns Hopkins University - $2.6 million
• -Harvard University - $3.3 million
• -U of Alabama-Birmingham - $3.4 million
• - University of South Florida - $6.4 million
• -Yale University - $7.6 million
• -Florida International University - $11.5 million
• -NYU Medical Center - $15.5 million
• - University of Minnesota - $32 million
From: Robert Bingham-Roy, Director of Business Operations, Georgia Board of Regents Sponsored Operations, Georgia Institute of Technology
Kay Gilstrap, Grants & Contracts Officer III, College of Arts and Sciences, Georgia State University - NCURA Region III - 1-4 May, 2011
Quick Quiz….
True or False?
Salary expense on a federally
funded award is an unsupported
cost and considered unallowable
until documented by an effort
certification form.
Who can sign the certification?
•
An employee, principal investigator or other
responsible official with first-hand knowledge of
an employee’s effort, or
•
A responsible official who used a suitable and
documented means of verifying the effort (phone
call, email from employee, progress report…)
Appropriate Support for Certification
•
For a faculty member, there may be a variety of
sources that report on activity or document the
expectations of his or her appointment and may
include the following:
•
Lab notebooks
•
Progress reports
•
Email from employee with confirmation of effort
expended, sent directly to approver
Certifying the effort
•
Signer must understand what
they are signing
•
Signer should be very aware of
the individual’s work performed
and have evidence to-hand
•
Personnel not closely involved
or not in a review position
Certifying signature
•
Any employee getting paid from federal funds, or
match to federal funds, must review and certify
their total effort on all federal projects for each
effort reporting period.
•
Effort promised on your sponsored project must
be accounted for and certified to.
OK, so what am I really certifying?
•
Proposed effort – that which is committed to in
the proposal budget.
•
Committed effort – that which has to be tracked
and documented (do not exceed 100% effort on
federal programs).
•
If you got paid 50% of your paycheck from a
project during the pay period, then you are
certifying to having actually worked 50% of your
time on it during that two week period.
My project has cost sharing….??
•
Cost sharing is the difference between the effort
expended on a project and the effort that is paid
for by the sponsor.
•
Mandatory or voluntary cost share – both still
have to be certified.
•
Effort committed (expended) but
Example 1
•
PI has agreed to spend
• 60% of his time (effort)
performing research related activities,
• 30% of his time providing
instruction through
teaching or advisement of students and
• 10% of his time providing
service to the public or the institution.
•
The total workload
Example 2
•
Budget justification may say 30% of the academic
year and 1.5 summer months. How much effort is
that for this faculty member?
30% of 9 months is 3 months
3 months is 24%
1.5 summer months is 12%
Ok, so when do I certify?
•
2CFR220 says:
“For professorial and professional staff, the reports will
be prepared each academic term, but no less
frequently than every six months. For other
employees, unless alternate arrangements are agreed
to, the reports will be prepared no less frequently than
monthly and will coincide with one or more pay
periods.”
•
Whether hourly or salaried, you will need to certify as
But – I’m not on campus…
•
If you have internet access, you
can still certify biweekly.
•
If you still use paper timesheets,
you can certify when you get
back on campus.
•
If you are really remote, and do
not have internet access, you
have 30 days from when you get
back to fill out paper timesheets
to certify your effort.
Do not
pre-certify
!
Quick Quiz…
QUESTION:
The department has an
admin performing
various functions on
various grants. Which
expense allocation is
the best choice?
Either is
Correct
.
1.
Split and charge salary to
all appropriate grants
based on the individual’s
log of activities by grant for
the month.
2.
Charge the salary to the
departmental fund since
detailed monthly records
do not exist to support any
other form of allocation.
Recent OMB proposed updates…
• Federal Register/Vol. 77, No 39, Feb 28, 2012 • B. Reforms to Cost Principles, Section 3
• Exploring alternatives to time-and-effort reporting requirements for salaries and wages:
“Consideration of the ideas described in existing pilots or
development of new pilots to accountably document the allowability and allocability of salaries and wages charged to Federal awards as direct costs.”
Summary
•
The university must have documented effort
certification on record for every commitment to a
sponsored project.
•
That effort must have been certified either by the
individual expending the effort or a responsible
employee closest to the effort
•
Cannot commit more than 100% on sponsored
projects (95% is more realistic)
Michelle Dondanville
Program Coordinator, Center for Alaska Native Health Research
University of Alaska Fairbanks
Maggie Griscavage
Director, Office of Grants and Contracts Administration University of Alaska Fairbanks
Allison Weber
Director, Research Administration Office Los Angeles Biomedical Research Institute
