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Effort Reporting System Overview
ORSPA/FISCAL OVERSIGHT
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IntroductionAll Arizona State Employees whose duties include the review or certification of sponsored effort should have a good working knowledge of effort reporting and annually review the training information on located at:
http://researchadmin.asu.edu/effort_training
For assistance or information contact the Fiscal Oversight/Office of Research and Sponsored Projects Administration (ORSPA) at:
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Topics Introduction to Effort Report Certification
Importance of the Effort Report Certification
Understanding Committed Effort
Effort Certification Examples
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Objectives Introduction to Effort Reporting and CertificationReview Training Information Define Effort and Effort Report CertificationUnderstand the Difference Between Payroll
Distribution and Compensated EffortThe Responsibilities of Faculty and Staff
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Purpose The primary purpose of effort certification is to ensure that the salaries and wages
charged to, or contributed to, sponsored projects are reasonable and consistent with the portion of total professional activity committed to the projects.
Section J.10 of OMB Circular A-21 (Cost Principles for Educational Institutions) provides the framework for acceptable methods of documenting the activities that employees spend time on for sponsored projects. The University’s effort certification system provides the principal means for accomplishing effort certification.
Salaries and wages typically comprise approximately 2/3 of the direct costs charged to sponsored projects. Funding for Sponsored Project comes from Federal and State agencies, private foundations, organizations, and industry sponsors. These funds enables Arizona State University to conduct research, give public service, and obtain training for projects.
Auditable Documentation must be readily available and this documentation must provide information that the University has meet its commitment to Sponsors.
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Did you Know? A12’s and Exempt employees are required to certify effort reports generated by the certification system.
PI’s must certify effort for a Grad Appointees working on their sponsored projects. The time cards for waged employees satisfy the federal requirements as the Supervisors must sign off on their work.
The PI remains ultimately responsible for the accuracy of certified effort reports for work on their project, even if the authorized individuals who have direct knowledge of work performed certify the effort report.
Proxies must have direct knowledge of the work performed by the employee for which they are certifying. Department Effort Administrators cannot certify the same report that they review and release. To reduce
any The effort reporting (ER) certification system provides a means for the University to distribute paperless
effort reports via the web. The effort certification system data is derived from PeopleSoft, Advantage, Coeus and commitments entered into the ER system. The system will capture all normal appointment information.
Care must be taken to ensure that manual transactions and documentation such as salary transfers or cost share information, are correctly represented in the ER certification system.
DEA’s do not “certify” the effort report. They only review and release the report for certification. Annualized Salary is different from the annual salary. The ER system calculates the annualized salary by
adding all active position number and calculating the total amount possible income at full FTE.
Training Objectives
After completing this training, you will be able to:
Define effort and effort certification Understand the importance of completing effort certification Define the categories of effort reporting Understand what committed effort is To have a good working knowledge of the effort certification system Address the most common effort situations
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Defining Effort and Certification
Effort is the amount of time spent on any activity expressed as a percentage of total institutional activities for which an individual is compensated by the University and includes:
Sponsored Projects (i.e. contracts and grants) Teaching/Instruction including student academic supervision Non-Sponsored research Administration including proposal preparation
(Proposal development for new projects should not be expensed to a grant unless written into the award the expense posted to.)
Other institutional activities
It is extremely important to understand that Effort is not calculated on a 40 hour workweek or any other standard workweek
Total effort must equal 100%
Supplemental payments are not included in the effort report and are not reported. They are payments for work outside of their Institutional base salary (IBS). Information on Earnings Codes that are allowed can be found on the Sponsored Projects Dashboards or contact [email protected]
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Defining The Effort Reporting and Certification
The certified effort report should reflect all activities conducted under the terms of employment (ISB) and typically does not include:
Outside consultingSupplemental paymentsStipend payment
Effort is expressed as a percentage of total employed time
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Difference between Effort and Payroll
Effort certification is not a verification of our payroll system’s accuracy. Payroll distributions describe the allocation of salary, while effort distributions describe the allocation of an activity to projects “independent of salary”.
Grants awarded after July 1, 2013 will have the committed cost share effort tracked on State Cost Share accounts
To change the percent of compensatory effort issue a payroll redistribution.
Changes in the effort certification system due to cost-shared activity may not need a corresponding payroll change.
Changes to effort reports will generate a new report that will require certification.
Individuals completing effort reports are required to identify other areas where effort was provided with no salary support (cost sharing) and to ultimately report the appropriate distribution of effort over all institutional activities.
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Federal Regulations
Establishes principles for determining costs Defines what costs are allowable to federal agreementsStipulates that institutions must have a payroll
distribution system that ensures:Appropriate to the award Proper allocation of payroll
Requires certification of effort
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Salary Cap Limit Amount allowed by rate of pay Executive Level I – 199,700
Awards on before December 22, 2011 Executive Level II – 179,700
Awards on or after Dec 23, 2011- Jan 5, 2014 Executive Level II – 181,500
Awards on or after January 12, 2014 – January 10, 2015 Executive Level II – 183,300
Awards on or after January 11, 2015 – September 30, 2015
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Certifier and University Responsibilities
The PI and the University, in general, commit to levels of effort through the proposal and are responsible for managing their effort commitments.
If a PI is already fully committed, acceptance of a new award would require some change to the existing commitments. The PI and their Research Administrator must always address the over commitment with the Office of Research and Sponsored Projects (ORSPA). Reductions in committed effort must always be processed by the Grant and Contract Officer (GCO) assigned to the project.
A significant reduction is often defined as a reduction of 25% or more the committed effort. For example, an anticipated change from 40% committed effort to 30% committed effort is a significant change of 25% since the 10% is one-fourth (25%) of the 40%.
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40%
10%
50%
EXAMPLE OF EFFORT - FACULTY MEMBER
COMMITMENTADMINISTRATIONTEACHING
50%
10%
30%
10%
CHANGE IN COMMITMENT
TEACHINGADMINISTRATIONPREVIOUSNEW
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The total committed effort is 40%. Of that40% of effort, a 10% change in commitmentis 25% of the total and can change the scopeof work.
Importance of Effort Certification
ObjectivesIdentify the Reasons for Completing Effort
Certification ReportsFederal Regulation and ASU Policy Requires
Effort CertificationRecognize the Risks of Non-Compliance with
Effort Certification Regulations
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Reasons for the Certification of Effort Reports
Effort Certification provides audit-ready documentation for:Supports the level of effort performed on Sponsored
Projects, Instructional and Administrative dutiesSupport that the University has met the level of effort
committed on sponsored projects
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Federal Regulations
Establishes principles for determining costs applicable to grants, contracts, and other agreements with educational institutions. It defines what costs are allowable to federal agreements.
Stipulates that institutions must have a payroll distribution system that allows salaries paid under federal grants to be properly allocated and that confirmation is made by the institution that individual salaries paid under federal awards are appropriate to that award.
Requires confirmation to be made by either the PI or a responsible official using suitable means of verification.
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Risks of Non Compliance
Effort Certification provides the documentation necessary to support the salary charges on awards. The inaccuracy of certification could cause an auditor to question both direct and indirect costs. As a result, cost may be disallowed and penalties imposed.
Auditors may find effort certification to be inadequate due to one or more of the following:
Certification by and individual who did not have suitable means of verifying an individual’s effort on the sponsored agreement
Certification did not encompass all of the activities performed by the individual under the terms of their employment at the University
Levels of effort did not appear reasonable, given other conflicting institutional activities (i.e. teaching load, administrative duties, other research grants)
Lack of timeliness – certification should occur within existing university timelines
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Risks of Non Compliance
Falsification of effort certification information may lead to criminal charges against the individual who falsely certified the information and the PI responsible for the award.
Non-compliance of policy may lead to suspension of the PI’s research rights and privileges with the University.
If a PI does not adhere to the time and effort policy, the University has the right to disallow the PI to submit proposals and may inactivate existing accounts in the accounting system.
Disregard of policies may also lead to other disciplinary actions in accordance with the University policies.
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Understanding Committed Effort
In order to calculate the level of commitment for an individual you first have to:
Determine the Committed Level of Effort for the employee
Ensure that the percent of Effort meets the Commitments
Monitor the Effort Commitments on a consistent basis
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Determining the Committed Level of Effort
The majority of sponsored projects are cost-reimbursable agreements obtained through a proposal that describes the level of effort that the PI and other key personnel must devote to the project.
A minimal commitment is required on the part of the PI and faculty during the project.
The University’s minimum commitment minimum is 1%. This minimum requirement does not apply to:
Equipment grants Dissertation support Other awards intended as Student Support Limited-purpose grants such as travel grants or conference support
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Meeting Committed Level of Effort
The Co-Investigators and other “key personnel” must meet the level of effort obligated for each sponsored project.
Any changes should be approved by the PI. Changes are coordinated with ORSPA for sponsor notification as
required by the Uniform Administrative Requirements for Grants and Other Agreements with institutions of Higher Education.
The University is committed to providing this level of effort should an award be acceptable and must monitor whether the level of effort committed is actually met.
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Meeting Effort Commitments The University, its administrative officers, and the PI’s are responsible for
meeting the level of effort committed to the award for both the PI and “key personnel”.
The level of effort may fluctuate during the award period and must be monitored and certified accordingly.
A revision of effort which represents a change of 25% from the original commitment could be considered as a change in scope for the project. A reduction greater than 25% from the committed effort may require that ORSPA, in coordination
with the PI, to notify the sponsor to revise the level of committed effort. The 25% guidance may not apply to federal contracts and non-federal sponsors.
The terms of these awards may require communication with the sponsor for smaller reductions in effort levels. ORSPA can assist in determining when notification is required.
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Monitoring and Minimums Total institutional activity encompasses both effort devoted to sponsored projects and the
effort devoted to other University responsibilities. The total % of effort cannot exceed 100%.
Most faculty members have responsibilities for teaching or administration that would preclude them from devoting 100% of their time to sponsored activities
Exceptions to this include key research staff who do not have other responsibilities.
The responsibility for determining the balance between the PI’s research, teaching, and service fails to the Chair or Dean of the academic unit and thus effort commitments should be monitored accordingly.
The annualized salary is calculated in the effort reporting module by combining the aggregate total of active positions at full FTE on each position.
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Special ReviewWhat if… Effort Committed with No Salary
Contact your GCO and have the effort:
Transferred an employee whose activity included this effort
And/or remove effort from this report
100% Sponsor Funded Effort for Faculty (unless research faculty) Issue a PRR to transfer a minimum of 1% of payroll distribution to a State or Local account
New Award Moves Committed Effort Over 100% Refuse the new award Or contact Sponsor(s) and renegotiate the commitment
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Special Review Continued The percent of effort is wrong on the report
Issue PRR’s to change the percent of pay distribution
The Certifier changed the percent of effort on the report The DEA should reject the report back to the certifier and issue PRR’s to make the changes to the
effort listed on the report
The title of the employee is no longer valid The only item on the report that is reported to the federal government is the percent of effort for the
employee All other information is for accuracy in compiling information on the effort report
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Your Queue
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Report Sequence lets you know if the report has beenSuperseded by a new report
Approval Sequence lets you know if theEffort Report needs to be released orif it has been certified and needs to be returned to ORSPA for finalization
Reports must be finalized in order to invoice the Sponsor for expended funds
Basic Effort Report
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Click to expand or drill down for more information
Expanded Report
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Click twice to drill down to account
Approval Drill Down
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Approval Sequence and Reviewer/Certifier Information
100% Plus Effort
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100% Commitment requires 100% payDistribution on a State or Local account
Over The Cap (OTC)
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Click on the underlined information and icons to drill down
Click on the symbols to read more information
OTCDrill Down on Error Symbol
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A increased rate of pay can cause the report to post an OTC error message and/or a pay period deviation message
One issue can trigger multiple error flags
Always click on Cancel. “OK” attests that this is correct information
OTCDrill Down on % of OTC
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Cap by Pay Period lists amount allowed by pay period on NHHS federally funded grants
Gross Payroll is total amount of expense for pay end date. Drill down on pay lines to see amount on each account
Annualized Salary is different from Annual Salary
Salary cap is manuallyadjusted for projects with two caps
Information Message
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Report ID
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There are 5 types of effort reports• A12 – salary paid over 12 months for 9 months of effort• Exempt – Salary• Grad Appointee – Salary
• Student Hourly – wages• Non-Exempt – wages
Waged employees do not need to be certified unless they have committed effort. ASU’s payroll process satisfy federal requirements
Warning Message
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Warning Messages let you know that an issue must be resolvedBefore the report can be certified
Error Message
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Drill down on all message symbolsAnd underlined information
OTC Drill Down
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Annualized Salary isDifferent from Annual Salary
Gross payroll is listed; for pay by account Drill down on account lines
Total Salary Limit by Pay Period
Review Exercise 1What is the primary purpose of the effort certification?
A. To identify any cost that exceeds the agreed upon effort, and to determine how much to transfer off the grant
B. To ensure that the labor being performed on a project is being correctly distributed between departments associated with the project
C. To that the budget is in line with the compensation of faculty and staff paid from the account
D. To certify that the salaries and wages charged to, or contributed to, sponsored projects are reasonable and consistent with the portion of total professional activity committed to the projects
The correct answer is D
The effort certification system is the University’s means for certifying that salaries and wages charged to, or contributed to, sponsored projects are appropriate based on percentages of total effort expended.
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Review Exercise 2A completed effort certification should document the amount of time a faculty member devotes to all of the following activities except:
A. Outside consulting
B. Administration
C. Sponsored projects
D. Teaching
The correct answer is A.
The completed effort certification should reflect all activities conducted under the terms of employment.
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Review Exercise 3True or False: The main difference between payroll distributions and effort distributions is that payroll distributions describe the allocation of salary, while the effort distributions describe the allocation of an activity to projects “independent of salary”.
A. True
B. False
The correct answer is A.
The distributions of payroll describe the allocation of salary, while percent of effort distributions describe the allocation of an activity to projects “independent of salary”.
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Review Exercise 4
If the receipt of a new project award would require some change to a faculty member’s existing sponsored effort commitments, the investigator must:
A. Increase the amount of hours worked, since effort is based on a 40-hour workweek
B. Revise the level of effort internally, without notification to the sponsor
C. Work with the GCO at ORSPA to address the over-commitment
D. Do nothing
The correct answer is C.
Reductions in commitments must be processed through the GCO assigned to the project.
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Exercise 5What is one function of effort certification?
A. To provide documentation to support the level of effort performed on each award and on other Universities activities
B. To help determine the budget for the next fiscal year
C. To provide data that will indicate whether current staffing levels are adequate
D. To ensure that proposals submitted are realistic
The correct answer is A.
One function of the effort report is to provide auditable documentation that supports the level of effort performed on each award and on the other University activities.
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Review Exercise 6Which one of the following assertions regarding OMB Circular A-21 (Cost Principles for Educational Institutions) is correct?
A. It sets a salary limit on the personnel participating in the project
B. It sets the time frames for completing the projects
C. It defines what costs are allowable and allocable to federal assistance agreements
D. It requires individuals to obtain suitable means of verification of at least 50% of an employee’s activities before certifying the effort report
The correct answer is C.
The OMB Circular A-21 defines what costs are allowable and allocable to federal agreements.
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Review Exercise 7Which of the following are reasons why and auditor may find an effort certification form to be inadequate?
A. Activity on a sponsored award was certified by someone who did not have suitable means of verification of 100% of the activity on the project
B. Certification did not encompass all of the activities performed by the individual under the terms of their employment a the University
C. Levels of effort did not appear reasonable, given other conflicting institutional activities (i.e. teaching schedule, administrative duties, other research grants)
D. All of the above
The correct answer is D.
Effort Certification may be found inadequate if the auditor determines that the level of effort listed is not reasonable and/or is inconsistent with other support documentation that substantiates the individual’s total institutional activity.
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Review Exercise 8True or False: A minimum effort commitment by the project PI and key personnel is generally required by the University.
A. True
B. False
The correct Answer is A.
A minimum percentage of effort by the PI and key project personnel must be contributed to the project; exceptions include equipment grants, dissertation support, other awards intended as student support, and limited-purpose grants such as travel grants or conference support.
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Review Exercise 9What effort must be monitored by the University to ensure that the committed level of effort is being met?
A. The level of effort of the principal investigator?
B. The level of effort of the “key personnel” on the project.
C. A and B
D. None of the above.
The correct answer is C.
To ensure that we are meeting the committed level of effort, the level of effort of the Principal Investigator and “key personnel” on the project must be monitored.
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Review Exercise 10Which of the following groups are permitted to devote 100% of their time to sponsored research?
A. Professors who teach regularly
B. Doctors who practice medicine and treat patients
C. Key research staff who do not have other responsibilities
D. Assistant Dean for Enrollment with a research laboratory
The correct answer is C.
The groups that are allowed to devote 100% of their time to sponsored research are key research staff who do not have other responsibilities.
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OKED/ORSPA/FISCAL OVERSIGHT
Thank you for your time and keep up the good work!
You should now be able to:
1. Define effort and effort certification
2. Identify the importance of completing effort certification reports
3. Understand committed effort
4. Define the categories of effort
5. Identify how to report actual effort on the report
6. Understand most of the common effort certification situations
The Fiscal Oversight Team
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