The University of MontanaResearch & Sponsored Programs

Personnel costs are typically the single largest expense charged to federally sponsored awards

Institutions receiving federal funds for sponsored agreements must certify effort

UM must comply with OMB Circular A-21 (Section J.10), Cost Principles for Educational Institutions:

http://www.whitehouse.gov/omb/circulars/a021/a21_2004.pdf

Track the monthly effort of personnel who have been paid from and/or committed effort to a sponsored project

Certify that the pay was a reasonable reflection of effort

Account for 100% of all effort for which the University compensates the individual

Effort percentages are based on total effort, not hoursThis is true even where the number of hours of effort the individual expends each week substantially differs from the “normal” workweek of 40 hours.

Personnel receive a Time & Effort Report when: Effort is paid on federal and/or non-federal sponsored projects A cost share commitment exists on federal and/or non-federal sponsored projects

StudentsDo not appear on the Time & Effort reportsTime cards serve as the certification

Salary figures are generated from the payroll system and are the original pay.

Cost transfers are not included on the reports.

The Time & Effort reports are divided into two parts and serve two functions.

The left-hand side is the effort certification where 100% of a person’s effort is recorded and must be certified.

If the information is incorrect, DO NOT certify that line. Note that it is incorrect and contact your grant accountant to cost transfer the payroll if you have not already done so.OMB Circular A-21, Section J.10 requires that the effort report be signed by “the employee, principal investigator, or responsible official(s) using suitable means of verification that the work was performed.”

The right-hand side of the report is where cost sharing is documented.

Cost sharing describes the portion of the cost of a sponsored project that is borne by the University rather than by the external sponsor.

An example of cost sharing is where some of all of an individual’s effort is expended on a specific sponsored project, as a requirement of the award, but not funded directly by the external sponsor.

Joe Taxpayer’s money comes with lots of strings attached. Sponsored programs (grants, contracts, cooperative agreements) are the most restricted funds on campus, because they are subject to federal law, state law, UM policies, and sponsor regulations. ORSP’s job is to provide proper stewardship of these funds, which protects the principal investigator as well as UM.

UM is subject to procedural audits, which include a thorough examination to make sure all applicable policies and procedures are being followed. A small finding at a departmental level can be extrapolated to UM as a whole and become a huge issue that impacts future funding.

All research universities have equivalent time & effort procedures at their sponsored programs offices, not just ORSP at UM.

When any portion of an employee’s salary is paid from a sponsored program, federal regulations require that 100% of their effort be certified.

Notice these aspects of a time & effort report on the page 10 example:Organization Number and Department (top left), Header with Month & Year (top middle)

Primary purpose is the Time & Effort section (left two-thirds of page):Employee, ID Number, Index, Index Title, T&E Authorization, Pay ID, Salary Amount (remember this is the original payroll and does NOT include any cost transfers), % of Total

Secondary purpose is the Cost Sharing section (right one-third of page):Grant Index, Percent, CS AuthorizationComplete this section only if you have an award with time & effort being used as cost match. Be sure to include the percentage of time as well as the grant index and authorization initial. If you forget to complete this section, you can send a memo later with the same information that appeared on the time & effort report. This will then be attached to the report as cost match certification.

The employees on the following example (p. 10) are all correctly certified.P.G. Boat is paid entirely from grant funds (100% effort)

BW22 is normal; BW21 has sick or annual leave paid from the grant leave pool.Notice the sums (both dollars and percentages), and the certification by initialing.

Prairie H. Companion is paid from a couple of grants and a state accountMO11 shows a cost transfer (either pending or already done) properly noted, so the effort was not and should not be certified by initialing.Notice under the Cost Share section that grant accounts are x’ed out. This is because other grants generally cannot provide cost share. There are some exceptions, but this requires permission from both sponsors, and generally is not permitted with federal awards.

Alltee Considered is paid entirely from state and designated accountsHe appears on the Time & Effort Report because his time is being used as cost match.Notice that the Cost Share section includes 3 things: the grant index using his time as cost match, the % of his time that was used for cost match, and the CS authorization initial.

Click Tappit has a problem.Part of his pay was missing, and HRS has been notified of the error.Notice that HRS adjusting has been noted, so the effort was not and should not be certified by initialing.

Notice what is being certified:I confirm that I have first-hand knowledge of the work performed during the stated period, and the effort distributed represents a reasonable estimation of the work performed. All employees who are either paid from our department’s project funds and/or whose time is using as cost match on a sponsored project are included on this report.

Time & Effort percentages are rounded to the nearest .01 so may be slightly less or greater than 100% due to rounding.

This page matches the initial to the printed name and the signature. The person reviewing uses his/her own name. No sign-bys are permissible.

The following example shows a missing person (Clack Tappit), who has been correctly added at the bottom of this page.

Cost match is a common reason for a missing person, since this is a manual process. UM personnel providing cost match must be identified by the PI.

Use the Cost Transfer form designated for Payroll (see following example).

A copy of the completed Cost Transfer form is filed by ORSP with the Time & Effort report for audit purposes.

Notice what is being certified:I confirm that I have first-hand knowledge of the work performed during the stated period and the effort distributed represents a reasonable estimation of the work performed.

It is a red flag for auditors if you send in a Time & Effort Report certifying one thing and a cost transfer that certifies something else. Be careful with time & effort certifications, because errors can create problems with auditors and ultimately with funding agencies.

Not following Time & Effort procedures could result in an audit finding which may impose a more onerous procedure.

Frequent errors in the recording of costs may indicate the need for improvements in the principal investigator's or the department’s grant management system.

Once you have certified salaries, they should not be cost transferred. However, if an error was made, it should be rectified with appropriate documentation for the grant file.

NUMBER 10

Leaving authorization initial lines blank

All the lines in the authorization initial column (except lines with a dollar amount of zero) need to be initialed, marked cost transfer, marked HRS adjusting, or indicated as belonging to another department.

Any lines that are left blank will result in the report being returned to you. Don’t automatically initial blank lines, but instead double check to see if they need to be marked cost transfer, marked HRS adjusting, or indicated as belonging to another department.

NUMBER 9

Initialing in the wrong place

The column intended for T&E authorization initials is located in the middle of the page.

Often, people initial only in the cost sharing portion on the far right by mistake.

If your project has T&E and cost sharing, you need to initial both places.

NUMBER 8

Not fully completing the cost sharing

If your project has cost sharing, be sure to write the index number and percentage on the cost sharing line at the right hand side of the page, and remember to initial it.

If there is no cost sharing for the month, leave this section blank.

NUMBER 7

Not providing all of the signatures to match up with the initials

All reports must have signatures on the certification page that can be matched up with the initials.

NUMBER 6

Initialing & signing in such a way that initials & signatures can’t be matched up.

Some departments have quite a few people initial & sign the report. We can tell which initials go with which signatures most of the time, but once in a while we cannot.

When this happens, we have to send the report back to have the signature/initial pairing clarified.

NUMBER 5

In the case of an incomplete report, forgetting to sign the new certification page.

When the report is sent back to you, any new sets of initials must also be accompanied by signatures on the new certification page, even if the person initialing has already signed the previous certification page.

NUMBER 4

Writing in a location that makes it difficult to determine to which line (or lines) the notation pertains.

Please be sure you make it clear which line you’re initialing, marking as a cost transfer, marking as an HRS adjustment, or indicating as belonging to another department.

The best place is in the T&E Authorization initial column in the middle of the page, not below multiple payroll lines for the employee.

NUMBER 3

Crossing stuff out

Sometimes the report comes back with things crossed out, such as the index number, grant title, salary amount, etc. This is problematic.

If there is an issue with the salary amount, write “cost transfer” if appropriate.

If the issue is something else, call our office, and we will help you determine what needs to be done.

NUMBER 2

Signing someone else’s initials/name.

The certification must be completed by someone who has firsthand knowledge of the work performed.

This person should sign with his/her own initials and own name, not those of the person being certified or the name of the PI.

NUMBER 1

Not asking when in doubt

Anytime you’re not sure how to hand a T&E issue, please call our office at x6671.

We’ll be happy to help you.