OMB Circular A21 Cost Principles for Educational Institutions OMB Circular A110 Uniform Administrative Requirements for Grants amp Agreements with Institutions of Higher Education Hospitals and Other NonProfit Organizations ID: 508238
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Effort Reporting –Rising Above the ChallengeSlide2
OMB Circular A-21 Cost Principles for Educational Institutions
OMB Circular A-110 Uniform Administrative Requirements for Grants & Agreements with Institutions of Higher Education, Hospitals and Other Non-Profit Organizations
Tennessee Code AnnotateSponsor Terms and ConditionsTBR Policies and GuidanceInstitutional Policies and Procedures/PracticesSponsored Programs Policies and ProceduresA Guide to Managing Federal Grants
Legal GuidanceSlide3
The proportion of time spent on any activity and expressed as a percentage of the total professional activity for which an individual is compensated.
Restated
:Effort is how someone spent or expended their time.What is Effort?Slide4
When writing a proposal, the amount of time expressed in dollar amounts
or percentages (effort) has to be tracked and verified throughout the life of the award whether salary is charged directly, indirect or not at all to the grant.
$50,000 salary- request $10,000 =20% effort commitment. $69,000 salary- commits 20% = $13,800 allowable charge to the grantProposal Creation & Effort ReportingSlide5
Council of Government Regulation (COGR) definition of effort reporting
“Effort reporting is the mechanism used to confirm that salaries and wages charged to each sponsored agreement are reasonable in relation to the actual work performed. Certification of an effort report must reasonably reflect the activities for which the employee is compensated by the institution.”
What is Effort Reporting?Slide6
Anyone charged to a federal award must certify that the salary paid or the commitment proposed is reasonable in relation to the effort (activity) devoted to the award.
This includes individuals shown as match to federal awards and those with unpaid commitments.
Who Must Report Effort?Slide7
NOT based on 37.5 hour work week
Based on the total amount of time needed to perform the activities for which one is compensated by the institution
including: - Sponsored project activities - Non-sponsored project activitiesAdministration (including duties as chair, dean, etc)
How is Faculty Effort DeterminedSlide8
IBS is annual compensation paid by the college for an employee’s appointment.
The institution must establish what is included in the base salary of each employee.
JSCC IBS for faculty includes: instruction, office hours, advising, committee service, curriculum development, faculty development, public service and researchInstitutional Base Salary (IBS)Slide9
If you work 60 hours a week, 30 hours represents 50% effort
If a lab assistant works 20 hours a week, the 20 hours represents 100% effort
For ExampleSlide10
In a typical week Professor Y estimates that she works 54.5 hours.
Effort Example…
(cont’d)Sponsored Project A(Federal)
10
Sponsored Project B
(Foundation)
7
Instruction/office
30
Committee and Other admin
7.5
Total
54.5Slide11
Circular A-21 requires that institutions receiving federal awards maintain procedures documenting the distribution of activity, and associated payroll charges, to each sponsored agreement.
Why Must Effort Be Certified?Slide12
Signed effort reports are considered legal documents in which an individual attests to the accuracy of the effort spent on sponsored projects
Erroneously certifying effort reports can be viewed as fraud
We are obliged by federal regulations to exercise good stewardship of those funds 1.) Effort is a part of that stewardship 2.) Personnel costs are the majority of research costsFalse Claims Act, 31 U.S.C., sections 3729 & 3721
Why Should We CareSlide13
Difference between effort reporting and payroll distribution….
Effort reporting is how you spent your time
Payroll distribution is how you are paidEffort drives the payroll distributionPayroll distribution does not drive the effort certification
Effort Reporting vs. Payroll DistributionSlide14
Estimate of weekly hours spent on sponsored project % of effort
=
on Total hours in an average work week Sponsored Project
Example… (
cont’d
)Slide15
When Professor Y certifies her effort, it should be reasonably estimated as follows:
Effort Example
Sponsored Project A(federal)10
18%
Sponsored Project
B
(foundation)
7
13%
Instruction/office
30
55%
Committee and other admin
7.5
14%
Total
54.5
100%Slide16
Effort Example…
(cont’d)Slide17
Note: It is on rare occasions that University’s and College’s charge extra compensation, above IBS, to federal awards. Such cases should occur only when:
Work crosses departmental lines
orInvolves a separate or remote operation andWork is in addition to regular department load andSpecifically provided for in the agreement and approved in writing by sponsoring agencyCircular A-21 section J(10) d
Effort Reporting and Extra CompensationSlide18
Professor Y submits another proposal The new project will be require 5 hours, every weekend, for 15 week.
Effort Example
Sponsored Project A
(federal)
215
26%
Sponsored Project
B
(foundation)
109
13%
Sponsored Project C
(federal
) Extra Comp
75
9%
Instruction/office/other
432
52%
Total
831
100%Slide19
All 3 criteria must apply for a cost to be charged directly to a federal project:
The
cost must be allowable under both the provisions of A-21 AND under the terms of a specific project The cost must be allocable
, meaning it can be associated to a project with a high degree of accuracy
The cost must be
reasonable
, meaning it reflects what a “prudent person” would pay in like circumstances
Cost AllowabilitySlide20
Salaries
and
wages charged inappropriately to sponsored projectsEmployees not being properly trainedReports not certified in timely mannerMissing or incomplete documentation that serves as “suitable means for verification” of effortWeakness in the reporting systemEffort certified by individuals with insufficient knowledge of the work performed
Effort Reporting Common Finding:Slide21
Northwestern University- $5.5 millionSouth Florida - $4.1 million
University of California - $2.1 million
John Hopkins University – $2.6 millionUniversity of Connecticut - $2.5 millionAudit Disallowance CasesSlide22
www.whitehouse.gov/omb/circulars_default
www.tennesseeanytime.org/laws/laws.html
www.gpoaccess.gov/cfr/www.tbr.eduWebsitesSlide23
Celebrating Success As A Team