|
NORTHERN |
Certifying
effort is required by the Federal Government’s OMB
Circular A-21, Cost Principals for Educational Institutions (Revised
05/10/04). Section J10a states that
compensation for personal services is “allowable to the extent that total
compensation to individual employees conforms to the established policies of
the institution, consistently applied, and provided that the charges for work
performed directly on sponsored agreements and for other work allocable as
facilities and administrative (F&A) costs are determined and supported” by
an effort reporting system.
The Circular identifies two categories of employees: (1) professorial
and professional, and (2) other. The University distinction for these two employee
classifications is salaried and hourly. Effort for salaried employees is
certified through completion of the Effort Report. Effort for hourly employees
is certified on time sheets. Reports are
required to reflect to a reasonable extent the activities for which employees
are compensated by the institution. To
confirm that the distribution of activity represents a reasonable estimate of
the work performed by the employee during the reporting period, the reports are
required to be signed by the principal investigator and/or a responsible
university official(s). Without an
Effort Reporting System, the federal government could disallow salary and
fringe benefit charges to a grant.
Effort
reports must be submitted for faculty and staff (faculty, supportive
professional staff, affiliates, civil service salaried, and graduate students)
at
Individuals
paid directly from any federal/state sponsored project/grant /contract.
Individuals
paid directly from any other NIU funds and who provide some effort on
federal/state sponsored project/grant/contract for which effort is
re-distributed to a sponsored project/grant /contract.
The effort certifications are distributed semiannually.
Procedure
Grants
Fiscal Administration produces and distributes the Effort Reports.
The
effort report details, using employee ID, the base contract salary rate, the
grant-fund source cost centers for which each employee has been paid, and the
percentage of effort for the reporting period for each. The report reflects all HR based transactions
and all redistribution entries processed with respect to grant fund source
payments.
The
federal standard for effort reporting requires the reports to reflect to a
reasonable extent the activity for which employees are compensated. Variances of less than five (5) percent are
not considered significant and will not be adjusted.
Signed effort reports are due back to Grants Fiscal Administration thirty (30) days after delivery. A second notification, with a copy to the department chair, will be sent two weeks after the first is sent if a response is not received. An administrative hold on all expenditures will be placed on any grant that is not in compliance (response within 30 days).
What Is Effort and Effort Reporting?
Effort is defined as the amount of time spent on a particular activity. It
includes the time spent working on a sponsored project in which salary is
directly charged or contributed (cost-shared effort). An individual’s effort
working on a sponsored project is expressed as a percentage of the total amount
of time spent on institution base contract work-related activities
(instruction, research, service, administration, etc.) for which the University
compensates the individual.
Effort reporting with respect
to federal/state sponsored projects is the mandated method of certifying to the
granting agencies that the effort charged or cost shared to each award has
actually been completed.
Effort reports therefore
describe the allocation of an individual's actual time and effort spent for
specific sponsored projects, whether or not reimbursed by the sponsor. Thus
effort reporting is not just a verification of the salary or payroll
distribution, but also includes cost-shared or contributed effort.
What Is Cost-Shared or Contributed Effort?
Cost sharing represents that portion of the total project costs of a sponsored
agreement that are not borne by the sponsor or sponsors of the project. These
costs are borne by the University or other non-federal third parties, rather
than by the sponsor. Since salaries are, in most part, paid for by an
individual's academic department, cost sharing of effort must be approved by
the department chair and represents a redirection of departmental resources
from departmental research, assigned teaching duties, service, or other
departmental activities to support sponsored agreements.
Approved cost sharing can be required by the sponsor or volunteered by a
Principal Investigator. In either case,
any commitment of effort referenced in the project proposal or the award
document must be honored, reported, and captured in an effort reporting system.
The Effort Report uses the
payroll distribution as the basis for specifying an initial effort
calculation. Adjustments that are made
via PAY journals are also included. This
distribution is then compared to actual effort and modified accordingly.
For example, a PI’s
institution base contract salary amount is paid 50% from a grant and 50% from
institutional funds. When certifying the
effort report, the PI reports that 75% of the effort was related to the
grant. The 25% difference in this case
would be classified as cost share.
Using the same example, the
PI responds that 25% of the effort was to the grant. In such a case, Grants Fiscal Administration
will adjust the financial records by processing a journal to remove the excess
charge(s) from the grant and redistribute them to a non-grant cost center.
Prior to Grants Fiscal
Administration making any adjustments to the financial records, those effort
reports submitted by the PI with variances
more than 5% under the payroll distribution must be certified by the
appropriate departmental chair and dean, and the report certified by the dean
will be regarded as final and official.
When adjustments to the
financial records are needed, Grants Fiscal Administration will initiate and
post journal entries to adjust the personnel activity posted into the general
ledger to agree with the certified effort reports. These journals will be posted in the period
following the underlying activity. The
certified effort reports will be used as the support for the entries.
The time and effort system
uses all relevant HRS source data posted into the general ledger during the
report period, all PAY journals posted during the report period, plus GFA
initiated adjusting entries made in the beginning of the report period, to
support the certified effort reports. It
is imperative that all entries made to adjust personnel activity charged to a
grant happen in the actual report period.
Departmental entries transferring grant personnel charges will not be
made after each reporting period closes.
There are two reporting
periods: July 1 through December 31, and
January 1 through June 30.
Departments will have to
follow precisely the language of the grant/contract and use the funding appropriately. End of year transfers of salary dollars will
not be allowed. Grants will have to be
administered closely during the year.
Approved by APPM Advisory Committee January 4, 2007
Top of Document | APPM
Table of Contents | APPM Index | NIU Home Page
Please e-mail comments and
suggestions to:
webmaster@niu.edu