Last Update: June 2008
Responsible University Officer:
- Vice President for Research
- Associate VP for Research Administration
- Updated: June 2008
- Primary Contact : David Hagen
Printed on: . Please go to http://policy.umn.edu for the most current version of the Policy or related document.
Faculty and staff who are paid on sponsored projects or companion cost share accounts must certify the accuracy of this time (i.e., effort) according to the procedures established by the University in compliance with federal regulations.
Certification is completed by using the Effort Certification Reporting Tool (ECRT) or the approved manual effort certification statement template. The certified statement will reasonably reflect all of the employee's professional effort during the reporting period. All faculty and non-faculty principal investigators (PIs) must certify their own effort. Non-faculty personnel, such as professional staff, senior fellows, and lab technicians, may certify their own effort or the PI or other responsible official(s) can certify the effort using suitable means of verification that the work was performed.
For faculty and non-faculty PIs:
- The effort statement must accurately reflect the time PIs spent preparing proposals and conducting other administrative work. Therefore they cannot certify 100% effort on sponsored projects unless they are on sabbatical from their teaching and other duties.
- PIs cannot certify 0% effort on a sponsored project for the entire grant period. They must certify at least 1% effort on an effort statement during any one of the effort periods to accurately reflect their leadership of the project. This does not apply to equipment and instrumentation grants, dissertation and training grants or other awards intended as "student augmentation," and limited purpose grants such as travel grants and conference support.
- Before principal investigators or key personnel reduce their effort by more than 25%, they must notify Sponsored Projects Administration to determine whether prior sponsor approval is required.
PIs have the responsibility to ensure that the effort of individuals working on their sponsored projects are certified in compliance with this policy. If an employee's effort is not certified on a particular project, the PIs department must remove salary and fringe benefit charges from all sponsored projects on which the individual is paid. (Federal auditors argue that if a fraction of a person's effort is unknown, then it is impossible to determine the entirety of that effort). The department must move these charges to the project's non-sponsored default account and it cannot be counted toward cost sharing commitment (charges that are unallowable on the sponsored account are unallowable as cost sharing).
REASON FOR POLICY
Effort reporting is a federal requirement. As a condition to receive federal
funding, institutions must maintain an accurate system for reporting the percentage
of time (i.e., effort) that employees devote to federally sponsored projects
(see OMB Circular A-21, Cost Principles for Educational Institutions - Compensation
for Personal Services). The University has chosen to apply this standard to
The University's effort reporting system assures these external sponsors that
funds are properly expended for the salaries and wages of those individuals
working on the projects they sponsor. It provides the principal means for certifying
that the salaries and wages charged to sponsored projects are consistent with
the effort contributed. All employees involved in certifying effort must understand
that severe penalties and funding disallowances could result from inaccurate,
incomplete, or untimely effort reporting.
Finally, sponsors and auditors must also be able to verify that funds allocated
for cost sharing have been provided. The effort reporting system is the mechanism
the University uses to document cost-shared salary expenses.
- Committed Cost Sharing
- Mandatory or voluntary cost sharing that is pledged in the proposal budget, budget justification, or stated in award documents.
- Uncommitted Cost Sharing
- Voluntary cost sharing funds not pledged in the proposal and subsequently not stated on award documents. This type of cost sharing is above that agreed to as part of the award. This is commonly referred to as voluntary uncommitted cost sharing and for faculty and senior researchers, does not have to be documented or reported.
- Mandatory Cost Sharing
- Sponsor-driven, i.e., cost sharing that is required by the sponsor as a condition for proposal submission.
- Voluntary Cost Sharing
- Investigator-driven, i.e., cost sharing funds are not required by the sponsor as a condition for proposal submission.
- Cost Sharing
- The terms "cost sharing," "matching," and "in-kind" refer to that portion of the total project costs not borne by the sponsor. The University generally refers to cost sharing as labor costs.
- Effort is generally defined as the proportion of time spent on any activity and expressed as a percentage of the total professional activity for which an individual is compensated by Institutional Base Salary. Total effort for an employee must equal 100% (+ or - 1% due to rounding).
An individual's total time compensated by Institutional Base Salary serves as the basis for determining their total effort. In other words, if an individual who is being compensated for a 100% appointment works 60 hours in a week, then 30 hours would represent 50% of their professional effort. If the same individual only works 40 hours in a week, then 20 hours represents 50% of their professional effort. If an individual who is being compensated for a 50% appointment works 30 hours in a week, 30 hours would represent 100% of their professional effort. If the same individual only works 20 hours in a week, then 20 hours represents 100% of their effort. If a graduate student is employed for a total of 10 hours per week, then 5 hours represents 50% of their effort.
- Effort Coordinator:
- Effort reporting administrators at the department level who facilitate the distribution and submission of Effort Statements.
- Historical Salary Adjustment (HSA):
- An adjusting or correcting internal accounting transaction to transfer salary and fringe charges from past pay periods from one account to another.
- Institutional Base Salary:
- The base annual compensation set by the University for an employee. It includes salary increments, augmentations and paid overtime. It does not include non-service payroll items such as awards and overload payments, nor does it include compensation for patient care activities provided through the University of Minnesota Physician (UMP) practice plan that are paid through the University's common paymaster.
- Non-Service Payroll:
- All non-activity based payroll items which appear in gross earnings for eligible employees and are not to be included when certifying effort. Non-service payroll includes employee benefit accounts, trainee job class codes, overload payments, bonus payments, balance sheet labor clearing accounts and unused vacation payouts.
- Notice of Grant Award (NOGA):
- A document that provides information regarding the award's important terms and conditions. It should be referred to by PIs and departments to provide guidance in managing the project.
- Overload Payments:
- Compensation to academic personnel (Faculty and Professional Academic) for work that exceeds the normal scope of their appointments, e.g., extension instruction classes, continuing education.
- Preaward Costs:
- Costs incurred prior to the effective date of an award or a budget period.
- Retroactive Pay:
- Pay received for work performed in prior pay periods.
- Senior Researcher:
- Principal investigator without faculty rank.
- Sponsored Project:
- An externally funded activity that is governed by specific terms and conditions. Sponsored projects must be separately budgeted and accounted for subject to terms of the sponsoring organization. Sponsored projects may include grants, contracts (including fixed price agreements), and cooperative agreements for research, training, and other public service activities.
- Work Study:
- A Financial Aid program in which the state or federal government pays a percentage of a student's wages.
- Principal Investigator:
- Ensure the appropriateness and accuracy of all effort expended on the sponsored project and compliance with Effort Policy. Expend effort on project. Certify direct-charged and committed cost-shared effort up to the effort level committed. On federal projects, obtain prior approval if absent for more than three consecutive months, or effort is reduced more than 25% from the budgeted awarded plan.
- Researcher Employees
- Certify effort on a timely basis. Communicate issues or errors to department effort coordinator / payroll accountant.
- Unit Administrator:
- If committed cost sharing information is not listed or listed incorrectly on the NOGA, forward the information to the SPA grant administrator.
- Effort Coordinator:
- Ensure process is managed so that all parties have adequate time to complete certification and effort statements are completed within given timeframe. Facilitate the department effort certification process. Notify SPA Effort Unit when cost sharing changes on those grants where SPA entered original cost sharing. For other cost sharing arrangements, adjust cost sharing using the ECRT system. Submit accurate and timely effort statements. Attend required formal training.
- Department Head:
- Establish effective processes and controls that will ensure compliance. Assign an Administrator and/or Effort Coordinator to oversee the certification of effort. Provide local oversight and take action when notified of delinquent effort reports.
- Grant Administrators, Sponsored Projects Administration:
- During award setup, confirm that committed cost sharing is documented on the NOGA and that cost sharing account is established when cost sharing is required as a condition of the award.
- Effort Unit, Sponsored Projects Administration:
- Develop and implement effort reporting policies and procedures. Assist with development of educational programs for all employees involved in the effort certification process. Ensure that the effort system produces accurate effort statements in a timely manner. Monitor system to ensure compliance. Monitor the effort process for timely submission and report findings to departments.
There are no appendices associated with this policy.
FREQUENTLY ASKED QUESTIONS
- Certifier & PI Tutorial
- Certifier Job Aid
- PI Job Aid
- ECRT Training Manual for Effort Coordinators
- Training & Organizational Development
- Federal Office of Management and Budget - Circular A-21 - Cost Principles for Educational Institutions
- Federal Office of Management & Budget - Memorandum - Clarification of OMB A-21 Treatment of Voluntary Uncommitted Cost Sharing and Tuition Remission Costs (January 5, 2001)
- June 2008 - Made changes to reflect EFS implementation.
- February 2004 - Revised policy and procedures to reflect use of new Effort Certification and Reporting Tool (ECRT).
- October 2003 - Added link to 9 Over 12 Payroll Adjustment Worksheet. Added clarification for certifying effort and charging travel costs.
- July 2002 - Clarified departmental staff responsibility for notifying SPA Effort Unit of changes to committed cost share information. Reinforced faculty/staff requirement for certifying direct-charged and committed cost shared effort up to the total effort level commitment. Clarified certification requirements for Unpaid Effort. Reinforced PI responsibility to obtain sponsor prior approval to any change to committed cost sharing during projects.
- July 2001 - Added definitions for committed and uncommitted cost sharing, and mandatory and voluntary cost sharing. Changed prior requirement for quarterly PI 1% minimum effort reporting to mandate that such effort can be provided at any time within the year (i.e., academic year, summer months, or both), effective 1/5/2001. Effective 1/5/2001, eliminated requirement that faculty, or principal investigators without faculty rank, certify voluntary uncommitted cost sharing.
- December 2000 - Updated to reflect the use of the "Historical Salary Adjustment" rather than the discontinued "Type 38 Payroll Journal Voucher".
- September 2000 - Deleted reference to obsolete Sponsored Projected Employee Verification Statement. Clarified who is authorized to make changes to the statement.
- June 1999 - Clarified Policy Statement, Reason and Updated Related Information, Special Situations, Definitions, Responsibilities sections and all procedures. Added new procedure: Generating Departmental Effort Statements. Eliminated references to ORTTA within policy because of reorganization.
- July 1997 - clarified the definition of "effort" for exempt and nonexempt employees; stated the requirement for Principal Investigators to certify effort; included the requirement for the certifier to initial changes made to the effort column prior to certification; clarified who can certify effort statements.
- May 1996.
- September 1995
- Effort Reporting Policies and Procedures - Executive Summary.