Transcript Effort Reporting

Effort Reporting
Understanding the Effort Certification
Process
Why Do We Have to Do
Effort Certifications?
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OMB Circular A-21
State of Arkansas Series 22 report
DHHS Indirect Cost Proposal
Other Federal, State, and Accreditation reports
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OMB Circular A-21
• Section J. General provisions for selected items
of cost
• Item #10
Compensation for personal services
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OMB A-21 Section J.10
General Rule
• Compensation for personal services (salaries, wages,
and fringe benefits) paid for services of employees
rendered during the period of performance under
sponsored agreements… are allowable to the extent
that the total compensation conforms to established
policies of the institution, consistently applied, and
provided that the charges for work performed directly
on the sponsored agreements are determined… and are
supported by an acceptable method of payroll
distribution.
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What?
• Salaries, wages, and fringe benefits are allowable
expenses on a grant, only if you have a system in
place that supports an acceptable method of
distributing payroll expenses to a grant.
• The government recognizes 3 acceptable
methods of payroll distribution.
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3 Methods of Payroll Distribution
• Plan-Confirmation
• After-the-Fact Activity Records
• Multiple Confirmation Records
• The effort reporting system at UAMS meets the
requirements of the Plan-Confirmation method.
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What is Plan-Confirmation
• The plan-confirmation method of payroll
distribution mandates that a grant is charged
personnel costs for an individual, based on a
plan, and then the individual certifies (confirms)
that the amount charged is correct.
• This is what our payroll and effort certification
systems do.
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UAMS Effort Definitions
• 100% Effort – Total University-compensated effort.
Includes teaching, research, public service,
administrative, and other University-related activities.
100% effort does not equate to any set number of hours.
Expense associated with effort is based on institutional
base salary.
• Institutional Base Salary – The guaranteed salary
paid to the employee in 1/12th increments for the 12
months of the fiscal year.
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How does the effort system support the
expenses on the grant?
• Every employee has an institutional base salary
that supports 100% of their University
compensated time.
• The effort reporting system identifies the
portion of that 100% that was contributed to a
grant.
• That portion of time, multiplied by the
institutional base salary, determines the
allowable charge to the grant.
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How does that work?
• Employee John Smith has an annual salary of
$100,000. His salary distribution shows that
25% of his time should be assigned to grant G110001-01.
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Allowable Cost Example
• Therefore, the payroll system will have charged
$12,500 to the grant for the six month period.
Inst. Base Salary (6 mos)
$50,000
.25 Amount
% effort
to charge grant
$12,500
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Allowable Cost Example (cont.)
• However, if John Smith certifies on his effort
reporting form that he only worked 15% on the
grant, then the payroll charges to the grant
cannot be supported.
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Allowable Cost Example (cont.)
• Amount charged to grant - $12,500
• Effort contributed by John Smith:
Institutional Base Salary
$50,000
% effort spent on grant
.15
Allowable charges to grant $ 7,500
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Allowable Cost Example (cont.)
• The grant was charged $12,500 for the six
month period, however, there is only supporting
documentation for $7,500.
• The institution will have to make payroll
corrections to reduce the charges on the grant.
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What if the effort changes during the six
month period?
• Our effort certification forms are based on a six
month reporting period. If the percentage of
effort changes during the six months, the effort
certification form will show an average
percentage for the six month period.
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Change in % example
• Investigator A works on a project at 20% for
January and February. On March 1, he changes
his effort to 50%. For the six month reporting
period ending in June, his effort to certify will be
40%.
(Jan+Feb+Mar+Apr+May+Jun)
(.20+.20+.50+.50+.50+.50)/6 months
2.40/6 = .40
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Change in % example (cont.)
• To show how this works with the allowability of
the expense, let’s assume Investigator A’s annual
salary is $120,000.
• For January & February the grant was charged
$2,000 each month. ($120,000/12)*.20
• For March-June the grant was charged $5,000
each month. ($120,000/12)*.50
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Change in % example (cont.)
• The total expenses charged to the project for the
six month period were $24,000.
• The certification period is for six months, (1/2
of a year) so the six month institutional base
salary calculation is $120,000*1/2 = $60,000.
• $24,000 / $60,000 = .40.
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