Effort Certification. It s not rocket science..

Transcription

1 Effort Certification It s not rocket science..

2 Your Presenters: Maggie Griscavage, University of Alaska Fairbanks Allison Weber, Los Angeles Biomedical Research Institute Michelle Dondanville, University of Alaska Fairbanks

3 THE FEDERAL REQUIREMENT OF ACCOUNTING FOR YOUR WORK ON THEIR DIME! (It s not rocket science )

4 The legal stuff (A-21) 2CFR220, J.10.c.(2)(a)-(f) (b) These reports will reflect an after-the-fact reporting of the percentage distribution of activity of employees. Charges may be made initially on the basis of estimates made before the services are performed, provided that such charges are promptly adjusted if significant differences are indicated by activity records. (c) Reports will reasonably reflect 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 period, the reports will be signed by the employee, principal investigator, or responsible official(s) using suitable means of verification that the work was performed.

5 What it really means: The reporting and confirmation of your time spent conducting any university activity that typically is expressed as a percentage of the total institutional compensated based time (Institutional Based Salary (IBS)) OR If you work on a sponsored project, you must certify you spent the percentage you said you would.

6 Definition Effort: Work or the proportion of time spent on any activity and expressed as a percentage of University time. It does not equate to a 40 hour week, or a fixed number of hours it s a % of your base salary.

7 Activities included in effort tracking Externally sponsored research including special lectures on the project, appropriate seminars, consulting with graduates, attending meetings pertinent to the project. Departmental/University research uncompensated participation in study sections, peer review of manuscripts, unfunded effort on externally sponsored research. Instruction/university supported academic effort presentations to students, mentoring, participation in resident training. Administrative effort duties such as departmental chair, institute director, service on institutional committees.

8 When the effort is not for the institution. Example, an investigator does consulting for another institution that will be paid directly to the researcher by the other institution (i.e. not through a subaward to our institution). There is general confusion on when and how researchers should consult, so it does not surprise me that effort reporting confusion is also involved.

9 What is Effort? Effort vs. payroll charges Proposed vs. actual effort Who can Certify? Effort reports will be signed (certified) by the employee, principal investigator, or responsible official(s) using suitable means of verification that the work was performed. (J.10.c.(2)(c)) What is suitable means of verification?"

10 When a researcher takes on "incidental" responsibilities. Example: someone with a research faculty appointment who generally only does research agrees to teach a class as an adjunct. As you know, J.10.a. says "Incidental work (that in excess of normal for the individual), for which supplemental compensation is paid by an institution under institutional policy, need not be included in the payroll distribution systems described below, provided such work and compensation are separately identified and documented in the financial management system of the institution."

11 Effort Certification Required by A-21/2CFR220 (Section J.10)(actually does not mention effort reporting ) Certifies that salaries and wages charged to sponsored agreements are reasonable in relation to the work performed. Certifies that expended effort meets the commitments made in the project proposal, even if the person was not paid from project funds.

12 Types of Effort Reporting Plan Confirmation Salaries distributed based on budgeted, planned or assigned activity. After-the-Fact Activity Records Salaries distributed are supported by activity reports (payroll records). Multiple Confirmation Records Salary distribution supported by records which verify separately direct and F&A activities.

13 Quick Quiz TRUE OR FALSE?? Administrative employees can always be charged to federal sponsored programs. ANSWER: False

14 What is the reasonable estimate of effort? Sponsors recognize that the activities constituting effort are often difficult to separate. Effort certification must often rely on a reasonable estimate of effort, and when estimating, a degree of tolerance (e.g., up to 10% = +/ 5%) is appropriate.

15 Definition Certify: Assert, in writing, the correctness of employee percent of effort either by utilizing a time sheet or a separate effort certification process

16 An allowable amount of effort An allowable cost is one that is eligible for reimbursement by the federal government. Contrast with: PERMISSIBLE BY INSTITUTION: A cost is permitted by institution, as outlined in its various administrative procedures. ALLOWABLE BY AGENCY: A cost is permitted by the terms of the sponsoring agency. An "unallowable" cost is one that is not eligible for reimbursement by the federal government.

17 An allowable amount of cost An allowable cost must be: Reasonable: A prudent business person would have charged this amount. Allocable: It can be assigned to the activity on some reasonable basis. Consistently Treated: Like costs must be treated the same in like circumstances, as either direct or F&A costs. Conform to Terms: In A-21/2CFR220 or the Sponsored Agreement. Cost must meet all four standards to be considered allowable!

18 Is it allocable to my grant? A cost can be allocable as a direct or an indirect cost A cost is allocable as a direct cost if the goods or services provided are assignable in accordance with the relative benefits received. It is incurred solely to advance the work under the sponsored agreement It benefits both the work under the sponsored agreement and other work of the institution in proportions that can be approximated Allocate costs based on benefit to projects

19 So, what s a good amount to charge? A cost is reasonable if The nature of the good or service and the amount involved reflect the action of a prudent person. Considerations in determining reasonableness: Necessary for the performance of the sponsored agreement; Determined by arm s length bargaining of a prudent person; In accordance with the sponsored agreement terms and conditions; Consistent with established institutional policies and practices

20 Why certify? Well because the regulations require it,. the reports will be signed by the employee, principal investigator, or responsible official(s) using suitable means of verification that the work was performed.

21 What if I don t?? Severe penalties and funding disallowances could result from inaccurate (False Claims), incomplete, or untimely effort reporting

22 Personal Services Reporting Some of the particular problems identified: Inadequate cost transfer documentation Cost Transfers after the grants were closed Time promised in proposal did not match actual effort Allegations of charging over expenditures to other grants Improperly transferred expenses between grants Accounting System unable to monitor and manage charges Allegations that grant funds were used to pay salaries of employees not associated with research grant Allegations that time spent of grants was misrepresented

23 Personal Services Reporting Audit findings Notable Settlements at Other Institutions Effort (Personal Services) Reporting and Administrative Expenses Charged as Direct Costs - Johns Hopkins University - $2.6 million - Harvard University - $3.3 million - U of Alabama-Birmingham - $3.4 million - University of South Florida - $6.4 million - Yale University - $7.6 million - Florida International University - $11.5 million - NYU Medical Center - $15.5 million - University of Minnesota - $32 million From: Robert Bingham-Roy, Director of Business Operations, Georgia Board of Regents Sponsored Operations, Georgia Institute of Technology Kay Gilstrap, Grants & Contracts Officer III, College of Arts and Sciences, Georgia State University - NCURA Region III May, 2011

24 Quick Quiz. True or False? Salary expense on a federally funded award is an unsupported cost and considered unallowable until documented by an effort certification form. Answer: False

25 Who can sign the certification? An employee, principal investigator or other responsible official with first-hand knowledge of an employee s effort, or A responsible official who used a suitable and documented means of verifying the effort (phone call, from employee, progress report )

26 Appropriate Support for Certification For a faculty member, there may be a variety of sources that report on activity or document the expectations of his or her appointment and may include the following: Lab notebooks Progress reports from employee with confirmation of effort expended, sent directly to approver

27 Certifying the effort Signer must understand what they are signing Signer should be very aware of the individual s work performed and have evidence to-hand Personnel not closely involved or not in a review position should not sign for an employee

28 Certifying signature Any employee getting paid from federal funds, or match to federal funds, must review and certify their total effort on all federal projects for each effort reporting period. Effort promised on your sponsored project must be accounted for and certified to.

29 OK, so what am I really certifying? Proposed effort that which is committed to in the proposal budget. Committed effort that which has to be tracked and documented (do not exceed 100% effort on federal programs). If you got paid 50% of your paycheck from a project during the pay period, then you are certifying to having actually worked 50% of your time on it during that two week period.

30 My project has cost sharing.?? Cost sharing is the difference between the effort expended on a project and the effort that is paid for by the sponsor. Mandatory or voluntary cost share both still have to be certified. Effort committed (expended) but not paid for by the sponsor is cost sharing

31 Example 1 PI has agreed to spend 60% of his time (effort) performing research related activities, 30% of his time providing instruction through teaching or advisement of students and 10% of his time providing service to the public or the institution. The total workload needs to total 100%.

32 Example 2 Budget justification may say 30% of the academic year and 1.5 summer months. How much effort is that for this faculty member? 30% of 9 months is 3 months 3 months is 24% 1.5 summer months is 12% Total effort for this project for one year is 36%

33 Ok, so when do I certify? 2CFR220 says: For professorial and professional staff, the reports will be prepared each academic term, but no less frequently than every six months. For other employees, unless alternate arrangements are agreed to, the reports will be prepared no less frequently than monthly and will coincide with one or more pay periods. Whether hourly or salaried, you will need to certify as frequently as your institution requires.

34 But I m not on campus If you have internet access, you can still certify biweekly. If you still use paper timesheets, you can certify when you get back on campus. If you are really remote, and do not have internet access, you have 30 days from when you get back to fill out paper timesheets to certify your effort. Do not precertify!

35 Quick Quiz QUESTION: The department has an admin performing various functions on various grants. Which expense allocation is the best choice? Either is Correct. 1. Split and charge salary to all appropriate grants based on the individual s log of activities by grant for the month. 2. Charge the salary to the departmental fund since detailed monthly records do not exist to support any other form of allocation.

36 Recent OMB proposed updates Federal Register/Vol. 77, No 39, Feb 28, 2012 B. Reforms to Cost Principles, Section 3 Exploring alternatives to time-and-effort reporting requirements for salaries and wages: Consideration of the ideas described in existing pilots or development of new pilots to accountably document the allowability and allocability of salaries and wages charged to Federal awards as direct costs. FDP, US DOL, and US Dept of Education - pilots

37 Summary The university must have documented effort certification on record for every commitment to a sponsored project. That effort must have been certified either by the individual expending the effort or a responsible employee closest to the effort Cannot commit more than 100% on sponsored projects (95% is more realistic)

38 Michelle Dondanville Program Coordinator, Center for Alaska Native Health Research University of Alaska Fairbanks Maggie Griscavage Director, Office of Grants and Contracts Administration University of Alaska Fairbanks Allison Weber Director, Research Administration Office Los Angeles Biomedical Research Institute