Advanced Topics - Controller's Office

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Transcript Advanced Topics - Controller's Office

Effort Certification
New fiscal policy coming soon
• Existing fiscal policy FI0205
– About 2 paragraphs about effort just isn’t
• To ensure compliance with federal
requirements as specified in OMB Circulars
A-21 and A-110
• Other universities have extensive policies
• Response to recent Federal audits and
Recent effort settlements
• Johns Hopkins University (2004)
– $2.6 million
• Harvard University (2004)
– $2.4 million
• Northwestern University (2003)
– $5.5 million
Recent effort settlements
• Johns Hopkins University (2004)
– $2.6 million
• Faculty time and effort devoted to NIH
grants was overstated.
• Knowingly overstated time worked
• Charged more than 100% of salary
• Chronicle of Higher Education, March 12
Recent effort settlements
• Harvard University (2004)
– $2.4 million
• Government was billed for salaries and
expenses unrelated to federal grants
• Researcher spent fewer hours than promised
on a research study
• Researchers not working on grant or did not
meet citizenship requirements
• July 2, 2004 Chronicle of Higher Education
Recent effort settlements
• Northwestern University (2003)
– $5.5 million
• Researchers spent less time on NIHsponsored projects than they reported.
• Misrepresentation of time spent
• Failed to comply with effort reporting
• DOJ Press Release 02/06/03
• Chicago Tribune, February 7, 2003
OMB Circular A-21
• OMB Circular A-21, section J.10
– As a condition to receive federal
funding, institutions must maintain an
accurate system for reporting the
percentage of effort that employees
devote to federally sponsored projects
– UT uses the “after-the-fact activity
records” method
OMB Circular A-110
• OMB Circular A-110, Section (c),(2)
and (3)
– Recipients shall request prior approvals
from federal awarding agencies if
• There is a change in a key person specified in
the application or award document
• The absence for more than 3 months, or a
25% reduction in effort devoted to the
project, by the approved project director or
principal investigator
Who must certify effort?
• Every non-hourly employee working on a
sponsored project
– Regardless of whether the costs were charged
to the project
• If costs weren’t charged, then this is cost sharing –
see next slide about different types of cost sharing
– Employees paid from restricted funds will
receive an automated email reminding them to
certify effort
– Whether or not an email message is received,
an employee who has worked on a sponsored
project has the responsibility for certifying
their effort
Types of cost sharing
• Mandatory cost sharing
– Required by sponsor
– Charges must be put on the restricted WBSE or companion cost sharing
– Effort must be certified to the sponsored project
• Voluntary committed cost sharing
– Volunteered in proposal and now required
– Charges must be put on the restricted WBSE or companion cost sharing
– Effort must be certified to the sponsored project
• Voluntary uncommitted cost sharing
– Volunteered during the course of the project and was not included in
the proposal to the sponsor
– Charges are not put on the restricted WBSE or companion cost sharing
– Effort does not have to be certified to the sponsored project, but may
be shown on the certification with the variance code so that salary will
not be transferred
• See fiscal policy FI0210 Cost Sharing
How to certify effort
• 2 methods
– Individual employee certification on the web
– Departmental certification in IRIS
• By supervisor with first-hand knowledge
• PI can certify for graduate students
• By administrator with written after-the-fact
documentation from the employee
– Signed & dated email, letter
– Verbal is not acceptable
– Kept on file in department in case of audit
When to certify effort
• After the work has been performed
• Monthly is most frequent
• Minimum is semesterly
– Within 30 days of the end of the
• Must be within 30 days after the
sponsored project end date
Maintain payroll distribution
• Regularly update employee’s payroll
distribution when there is an
expected change
– Such as a new grant is beginning, an old
one is ending, etc
– This minimizes the amount of the payroll
retro transfer that is done as the result
of effort certification changes
Who can certify effort
• The employee can certify their own
effort on the web
– A PI can certify for GRA’s
• The departmental administrator can
certify for an employee if proper
– After-the fact signed email or printout
Full workload
• Effort is not based upon a certain number
of hours worked per week, but represents
the totality of effort which is
compensated by the University
– An employee cannot work “extra” on
administrative duties, preparing a proposal, etc.
– If 100% effort is charged to a sponsored
project, make sure this is true!
• Consider teaching workload, advising students, writing
proposals, administrative duties, clinical duties, etc.
Institutional Base Salary
• IBS includes regular pay, agency pay,
and professorships
• IBS excludes additional pay, bonus
pay, longevity, consulting or medical
practice income earned outside the
• Different pay rates or administrative
appointments may or may not be
included in IBS
Nine-month appointments
• Some faculty work a 9-month
academic year, but are paid over 12
– To ensure that sponsored projects are
charged 1/9th instead of 1/12th, an
electronic STV should be processed
Committed effort
• PI’s may overcommit their effort in
proposals, but must adjust this if awarded
– Changes in level of effort by PI’s or key
personnel may require prior written approval by
the sponsor
• Absence for more than 3 months
• Effort reduction > 25%
• Fixed price awards should show their fair
share of effort. Auditors will look at
these, too! If not appropriately charged,
then Federal awards may be overcharged.
PI & Dept responsibilities
• Appropriate, accurate, timely effort
• Departments should review
uncertified effort report regularly
• Set up WBSE in advance, if
necessary, to get salary charges in
the right place
NIH salary rate cap
• NIH has a mandatory cap on salary
rates that can be charged to
sponsored projects
– FY08 cap is $191,300 / 12 = $15,941 per
– Salary above the cap cannot be charged
to other Federal awards
• Some NIH awards (K awards) have a
minimum effort level of 75%
Changes to certified effort
• Once effort has been certified, it should
not be changed.
– This looks really bad to an auditor
• It an error is discovered, then it can be
– For example, the prior year R account was used
instead of the new year R account
• Any other changes should be charged to
the departmental E account.
Training classes
1 Overview of Accounting for Sponsored Projects
2 OMB Circulars & Cost Accounting Standards
3 Understanding F&A Costs
4 Direct Costing
5 Cost Transfers & Closeout
6 Cost Sharing
7 Subcontract Monitoring
8 Advanced Topics
9 Invoicing, Reporting & Cash Receipts
10 Sponsored Projects Reports in IRIS
11 Effort Certification
Other – IRIS reporting for sponsored projects