Effort Reporting Policy

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Policy Code: 
4150
Approval Authority: 
Vice Chancellor
Policy Type: 
Divisional Policy
Policy Owner: 
Administration and Finance
Responsible Office: 
Administration and Finance - 828.251.6742

Purpose

Personnel costs typically represent the single largest expense charged to sponsored awards. 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 Office of Management and Budget Circular A-21, Cost Principles for Educational Institutions.

Scope

This policy applies to all principal investigators/project directors (PI/PD) or individuals receiving financial support from federally sponsored agreements.

Policy

The University will maintain an effort reporting system and obtain effort certification from employees in compliance with federal regulation.

Definitions

Allocable – A cost is allocable to a project if goods and services involved are chargeable or assignable in accordance with the relative benefits received by the projects. In order to be allocable, a cost must be treated consistently in like circumstances.

Allowable – A cost is allowable to a project if: (1) the cost are reasonable; (2) the costs are allocable to the specific project; (3) the costs are treated consistently in like circumstances; and (4) the costs conform to any limitation of the cost principles or the sponsored agreement.

 Principal Investigator/Project Director – The individual designated by a sponsoring agency who is responsible and accountable for the proper conduct and direction of the project or activity.

Procedure

I. Federal Requirements

The University receives federal funding on sponsored program agreements and is required to comply with OMB Circular A-21. The Circular requires that the University have a system in place for certifying salaries and wages associated with federally sponsored agreements. The Circular stipulates that the certification reports should reasonable reflect effort allocated to the activities for which the employee is compensated and that they are to be signed by the employee and the principal investigator/project director (PI/PD) or other responsible official using suitable means of verification that the work was performed.

II. Explanation of University Compensated Effort

University compensated effort includes research, teaching, administration, clinical activity and other activity for which an individual receives compensation of salary, wages, supplementary salaries and overloads (but not bonuses) from the University. Any effort expended for sources providing compensation other than the University, such as outside consulting fees, is excluded from total compensation for effort reporting. University compensated effort must be reasonable, allowable, and allocable to the sponsored program 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 may not be allocable to the sponsored agreement.

III. Calculation for the Effort Percentage

The effort certification reporting accounts for 100% of all effort for which the University compensates the individual. Even where the number of hours of effort the individual expends each week substantially differs from the “normal” workweek of 40 hours, effort percentages are based on total effort, not hours.

For example, consider an individual working an average of 50 hours per week with effort divided equally among four tasks: teaching, conducting research on each of two grants (A and B), and chair/committee responsibilities. This individual’s effort would be:

  • 25% effort Teaching
  • 25% effort Grant B
  • 25% effort Grant A
  • 25% effort Chair/Committee

If the individual worked an average of 30 hours per week and the same four tasks were equally distributed, the effort would be calculated as follows:

  • 25% effort Teaching
  • 25% effort Grant B
  • 25% effort Grant A
  • 25% effort Chair/Committee

In both examples, the percentage of effort is the same because the percentage of effort is based on the effort worked on each task divided by the total effort worked, not the number of hours worked.

IV. Frequency of Certification

UNC Asheville has three effort reporting periods: July 1st to Oct 31th ,  Nov 1st to Feb 28 th , and Mar 1 st to June 30 th . Approximately 15 days after each effort reporting period, the University will generate effort certification reports which are to be completed and returned within the defined deadline (e.g. if effort cycle ends Oct 31, please return completed form by Dec 31).

V. Distribution of the Certification

The effort certification reports are organized by individual and circulated to each department via campus mail. 

VI. Who Should Sign the Certification Report?

OMB Circular A-21, Section JM.10 requires that the certification report be signed by “the employee, principal investigator, or responsible official(s) using suitable means of verification that the work was performed.”

Effort certification reports are signed by the employee and the principal investigator or other responsible official to confirm that all activities (sponsored and non-sponsored) are reported correctly and that the distribution of effort shown on the certification report reflects a reasonable estimate of the percentage of total effort that was spent on each activity.

Signing the report confirms that effort, as certified, reasonably represents the effort expended during the period. The report must be completed and returned within the defined deadline.

VII. Corrections to Effort Certification

Actual effort should be closely monitored throughout the life cycle of each award and significant changes to planned effort distributions should be made as soon as they become known. If, at the end of a certification period, the effort percentage reflected on the certification is not a reasonable estimate of the employee’s effort, the percentage should be crossed out in ink with the correct percentage written in the margin. An Internal Prior Approval Request (IPAR) should be submitted with a corrected certification report.  In accordance with the University Cost Transfer Policy, correcting forms should be completed, signed by the appropriate academic department personnel and sent to the Special Funds Accountant. The Special Funds Accountant reviews each cost transfer to ensure that the transfers and related explanations meet the budget, allowability and allocable requirements of OMB Circular A-21.               

VIII. Retroactive Payroll Transfers

Special consideration must be given to the timeliness of payroll cost transfers in relation to effort certification. University policy requires that the payroll distribution match the effort percentages certified on the effort certification report. Payroll cost transfers, accompanied by appropriate explanations, are strongly encouraged prior to the certification of effort. In rare instances, should it be deemed necessary to process a payroll cost transfer to correct a report that has already been certified; the request must include a written justification. It should be submitted within 180 days of the period being certified and it must be approved and signed by the Associate Vice Chancellor for Finance. Once the cost transfer has been processed, a new effort certification report is produced for the required signatures.

IX. Cost Sharing

Cost sharing describes the portion of the cost of a sponsored project that is borne by the University rather than by the external sponsor. One example of cost sharing is where some or all of an individual’s effort is expended on a specific sponsored project, as a requirement of the award, but not funded by the external sponsor. Another example would be where a portion of the compensation of an individual’s effort exceeds a salary cap imposed by the sponsor, such as awards from the National Institutes of Health. The effort not paid for by the sponsor should be reported as cost sharing. Effort should be shown on the effort certification report as an alphanumeric award number.  Any cost sharing time should be reviewed for accuracy as part of the review of the overall effort indentified in the certification report.