Contracts and Grants Policy 12 – Certification of Effort Reporting

General

Compensation for personal services covers all amounts paid currently or accrued by the institution for services of employees rendered during the period of performance under sponsored agreements. Such amounts include salaries, wages, and fringe benefits. These costs are 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 is charged at the same rate as other sources. Charges to sponsored agreements may include reasonable amounts for activities contributing and intimately related to work under the agreements.

Purpose

Office of Management and Budget Circular A-21 requires effort certification for payroll distribution purposes for all payroll charges to federal contracts and grants of professorial, professional, or support staff. These Time and Effort Reports account for 100% of each individual’s effort even if he/she is part-time. Charges for work performed on sponsored agreements by faculty members during the academic year will be based on the individual faculty member’s regular compensation for the continuous period which, under the policy of the institution concerned, constitutes the basis of his salary. Charges for work performed on sponsored agreements during all or any portion of such period are allowable at the base salary rate. In no event will charges to sponsored agreements, irrespective of the basis of computation, exceed the proportionate share of the base salary for that period. This principle applies to all members of the faculty at an institution. Since intra-university consulting is assumed to be undertaken as a university obligation requiring no compensation in addition to full-time base salary, the principle also applies to faculty members who function as consultants or otherwise contribute to a sponsored agreement conducted by another faculty member of the same institution. However, in unusual cases where consultation is across departmental lines or involves a separate or remote operation, and the work performed by the consultant is in addition to his regular departmental load, any charges for such work representing extra compensation above the base salary are allowable provided that such consulting arrangements are specifically provided for in the agreement or approved in writing by the sponsoring agency.

Time and Effort Reporting

OMB Circular A-21 requires that the payroll distribution system (time and effort reporting) will (i) be incorporated into the official records of the institution, (ii) reasonably reflect the activity for which the employee is compensated by the institution, and (iii) encompass both sponsored and all other activities on an integrated basis. The Office of Contracts and Grants is responsible for distributing, collecting, reviewing, and maintaining the official file of time and effort reports. The University has elected to use a system of after-the-fact activity confirmation reports for all employees paid partially or in full by one or more sponsored agreements. The percentages reflected on the time and effort reports are based upon the amounts charged to contract and grant accounts in the University payroll system, which may not reflect actual effort expended. The percentages must be changed to reflect the actual activity expended before they are certified.

A time and effort report is created each quarter for every University payroll which includes faculty, staff, graduate assistant, student or temporary salaries charged to sponsored agreements. The distribution of salaries and wages is based on payrolls documented in accordance with the general accepted practices of colleges and universities. The reports are sorted by department, based on the department to which the sponsored agreement is awarded. Certification of the effort requires that the person signing the time and effort report, whether it be the principal investigator, department head, or dean, have first-hand knowledge of all the employee’s activities during the reporting period. The information certified by departments, on a quarterly basis, for pay periods reflects the actual activity of each employee as well as it can be measured, not the budgeted activity. The reports confirm, on a best-judgment basis, that the percentage distribution of effort for the period reported produce an equitable distribution of charges for employee’s activities and serve to substantiate the distribution of costs on a consistent basis so that federal agencies are charged at the same rate as other sources for the same faculty/staff time.

Refer to Procedure No. 8 for more information on Certification of Effort Reporting.