Effort reporting is a federal requirement. Accordingly, the government requires that institutions receiving federal funds for sponsored agreements maintain an effort certification process that complies with the requirements set forth in the Uniform Guidance and OMB Circular A-21. As a recipient of significant external funding, the University must assure Federal and other sponsors that the assignment of time and associated salary and fringe benefit costs to the projects they sponsor is fair, consistent, and timely.
Effort Reporting Federal Requirements
Uniform Guidance and OMB Circular A-21 require that the University have a system in place for confirming that salaries and wages associated with federally sponsored agreements. The Guidance stipulates that the certification reports should reasonably reflect effort allocated to the activities for which the employee is compensated, and that they are to be verified by the employee, the principal investigator, or responsible official using suitable means of verification that the work was performed.
To comply with federal requirements and the terms and conditions of the sponsored agreements, the University of Houston-Downtown requires certification of the percentage of time (i.e., effort) that each employee devotes to sponsored projects. The University's effort reporting system assures external sponsors that their funds are appropriately expended in that the portion of an individual's salary charged to a funded project is no greater than the portion of the individual's effort spent on that project. The system also provides confirmation that the University is in compliance with requirements related to meeting commitments of effort proposed and included in funded agreements. Principal Investigators (PIs) and other faculty and staff paid from sponsored projects must confirm, after-the-fact, that salaries charged to sponsored projects are consistent with the effort that was contributed.
Financial penalties, expenditure disallowances, and harm to the University's reputation could result from failure to provide accurate effort certifications or failure to comply with the University's effort reporting requirements.
Who Needs to Know the Requirements and Procedures?
Employees who are compensated in whole or in part by sponsored research funds, have made a commitment of uncompensated effort (cost share) to sponsored projects, or are involved with the administration of sponsored agreements are expected to abide strictly by the provisions of these procedures. This includes central and departmental sponsored project administrators, deans, chairs, principal investigators, and other sponsored research personnel. Each faculty member must be aware of his/her level of committed effort to sponsored projects, their ability to meet those commitments in light of any other University obligations they may have, and to communicate any significant changes in level of sponsored projects effort to his/her respective business office. All individuals involved in the effort certification process should be aware of the requirements and the importance of complying with them as funding disallowances and financial penalties can be imposed on the University for inaccurate, incomplete, or untimely effort reporting.
Explanation of University Compensated Effort
The effort verification process must account for all activity for which the University compensates the individual. This is referred to as the Institutional Base Salary (IBS). IBS includes all effort expended on research, teaching, administration, clinical activity, business development, and any other activity for which an individual receives compensation of salary, wages, supplementary salaries, and overloads (but not bonuses) from the University. It does not include effort for which the employee receives compensation directly from another entity (e.g., outside consulting work). University compensated effort must be reasonable, allowable, and allocable to the sponsored research in order to be properly charged and certified to the sponsored program. For example, it is generally inappropriate to charge or certify costs to a sponsored agreement for time spent preparing a proposal for an unrelated or competing award because such costs might not be allocable to the sponsored agreement.
|Example of Effort Reporting|
|Example of Institutional Base Salary||Amount||Effort||New Effort With Chair||New Effort with additional Teaching|
|Dr. X earns 90,000 in his nine month appointment and dedicates half of his time to Research||45,000||50%||40%||38%|
|Dr. X earns 90,000 in his nine month appointment and dedicates half of his time to Teaching||45,000||50%||40%||38%|
|Current Institutional Base Salary||90,000|
|If Dr. X will be Dept. chair stipend and receives $20,000 over 9 months||20,000||20%||16%|
|New IBS will increase||110,000|
|Dr. X asked to teach for the fall and will receive an additional 10,000 for the effort||10,000||8%|
|New IBS will increase||120,000|