3702 (D)

UMB Policy on Effort Reporting

Financial Affairs   |   Approved August 2, 2024

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Responsible VP/AVP

Dawn M. Rhodes, DBA, MBA

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Purpose

The purpose of effort reporting is to provide a reasonable basis for distributing salary charges among direct activities (e.g., sponsored projects) and non-sponsored activities. 2 CFR Part 200 {Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards} (Uniform Guidance) at 2 CFR 200.430 contains the federal regulatory requirements for internal controls over certifying effort expended on sponsored projects. The Uniform Guidance requires that UMB document the distribution of activity to each individual sponsored project, including any cost shared effort.

 

Policy Statement

Effort reporting encompasses many processes, including committing effort, charging and cost sharing salary expense for effort, and certifying effort to support commitments and salary charges. As a recipient of significant sponsored funds, UMB must assure federal and other sponsors that the assignment of effort and associated salary and fringe benefit costs to sponsored projects is fair, consistent, and timely. The UMB effort reporting policies—along with related definitions, procedures, forms, data, and technology—are the means by which this responsibility is fulfilled. Financial penalties, expenditure disallowances, and harm to UMB’s reputation and competitive position in seeking grants could result from an inadequate effort reporting process and supporting systems, or from failure to comply with effort reporting policies and requirements.

A basic regulatory framework for effort reporting is provided primarily by the Uniform Guidance and other federal publications such as the U.S. Department of Health and Human Services Grants Policy Statement (https://www.hhs.gov/sites/default/files/grants/grants/policies-regulations/hhsgps107.pdf). The development of this UMB Policy on Effort Reporting is an acknowledgement of the significant complexities and ambiguities of effort reporting and the challenges of understanding and complying with the Federal requirements.

This Policy relies on the associated Sponsored Projects Accounting and Compliance (SPAC) Procedure on Effort Reporting to provide guidance to faculty and the administrators who support them, in the most explicit and constructive way possible; to respond to common faculty and administrator questions; and, in general, to assist faculty members in the financial administrative performance of sponsored projects. This Policy reflects guidance consistent with UMB’s simultaneous objectives of promoting research and compliance.

Sponsors expect that effort will be expended in accordance with the terms of the proposals and resulting agreements. Additionally, sponsors expect that faculty and other project personnel who commit effort to their project have the effort available to commit. UMB has a responsibility to monitor the commitments of its faculty and other key personnel.

Whether the associated salary is requested and funded, or whether it is cost shared, the awarded effort is a commitment made to the sponsor that must be met and documented via certification. It is a federal requirement that the sponsor be notified in advance if there is a change in the Principal Investigator or key personnel on a negotiated award's scope of work.

This Policy, and the larger body of procedures, forms, data, and systems used in effort reporting, will continue to be evaluated by SPAC for opportunities to improve their effectiveness.

 

Definitions

Administration – Is the effort for administrative and support services that jointly benefit departmental activities. Departmental administration activities are compensated by UMB funds (non-sponsored funds) and are not charged directly to specific sponsored agreements. The costs include the salaries and expenses of chairpersons and other faculty and staff engaged in activities that jointly benefit sponsored projects and departmental activities. Examples include administering academic and staff personnel policies, planning programs, preparation of bids and proposals (including the typing of proposals, correspondence, telephone calls, etc.). NOTE: Some awards allow for the direct charging of administrative support salaries. Direct charging of administrative support relates only to the award being charged and does not jointly benefit all departmental activities. As such, this administrative effort should be considered sponsored effort under Uniform Guidance section 200.413(c).

Cost Sharing - Cost sharing is a use of UMB resources or funding that supplements externally sponsored projects. Salary cost sharing occurs when effort exceeds the payroll charged to a particular project. When effort exceeds salary reimbursement, the difference must be cost shared. These costs are not reimbursed by the sponsor and must be supported by non-sponsored UMB funds.

Effort - Effort is defined as the proportion of time spent on any activity and expressed as a percentage of the total professional activity for which an individual is compensated by Institutional Base Salary (IBS). Total professional activity includes time devoted to sponsored projects, as well as UMB activities such as teaching, clinical practice, administration, and other activities. Effort is not based on a standard work week. If an investigator works 80 hours in a week, 40 hours represents 50% effort. If an investigator works 40 hours in a week, 40 hours represents 100% effort. The total time compensated by IBS constitutes 100% effort. For example, for a graduate student who is employed for only 10 hours, that 10 hours represents 100% effort. The total effort expended cannot be more than or less than 100%. On most federal grant and contract proposals, effort is proposed in person months. For staff and faculty with 12-month appointments, regardless of full-time equivalent (FTE) level, effort is based on 12 person months. The total effort expended cannot be more than or less than 12 months.

Effort reporting - Effort reporting encompasses many processes, including committing effort, charging and cost sharing salary expense for effort, and certifying effort to support and document commitments and salary charges.

Effort Commitments - For many grants and contracts, during the proposal and award process, UMB commits a level of effort for the key personnel on the project. These commitments must be monitored to ensure that:

• individuals are not overcommitted (total sponsored and non-sponsored commitments are not greater than 100%);
• individuals are using a basis for committing effort that will be consistent with how work will be performed and how salaries are charged; and
• individuals are meeting those

Effort Certification - The Uniform Guidance recommends that after-the-fact certifications be obtained to document the actual distribution of an individual’s effort. The effort certification serves as the auditable document that supports that:

• Effort supported (paid) by a project has been performed as committed;
• Effort expended in support of a project, but not paid by the project, also has been performed as committed; and
• The salaries charged to the sponsored project were reasonable and fair given the distribution of the individual’s effort.

Instruction - Instruction is an effort related to the teaching and training activities of an institution. Instruction includes all teaching and training activities where the employee is the instructor, whether the teaching and training activities are offered for credits toward a degree or certificate or on a non- credit basis, and whether the activities are offered through regular academic departments or through separate divisions such as a summer school division or an extension division. Curriculum development should be considered an activity of departmental and university administration and should not be included as a teaching or training activity.

Salary Charging - An effective effort reporting process is closely tied to an effective salary distribution process. In order for grants and contracts to be properly charged, salary distribution to and among sponsored projects and non-sponsored activities must remain consistent with effort reporting. Payroll allocation must be set up timely according to planned effort driven by effort commitments on sponsored projects and non-sponsored activities. Additionally, if after-the-fact effort certifications disclose that actual effort was different than planned, then salary distributions should be reconciled to the after-the fact effort certifications in a timely manner. Once the salary is distributed, the related fringe costs will follow the salary costs.

Payroll and effort distributions are not the same thing; payroll distributions describe the allocation of an individual salary, while effort distributions describe the allocation of an individual’s activity to individual projects “independent of salary.” UMB’s effort certification process relies on payroll distributions to provide a general reminder of the projects on which an individual’s salary was charged during the certification period. Individuals completing effort report certifications are required to identify other areas where they provided effort with no salary support and to ultimately report the appropriate distribution of effort over all activities.

Scope and Exceptions

This Policy applies to all individuals involved with the administration and conduct of sponsored project activities, including sponsored project administrators throughout the campus, schools, and departments, Principal Investigators, and other research personnel.

Roles and Responsibilities

SPAC Team

• Coordinates the timing, distribution, and collection of effort reports.
• Provides institutional oversight for effort reports.
• Maintains the Effort Reporting System.
• Maintains effort reporting policies, procedures, and training.
• Works with the Office of Research and Development and the departments to assure the timely setup of awards so that payroll may be processed in a timely manner.

Schools/Departmental Administrators/Units

 Deans’ Offices

• Monitor faculty appointments and annual salary letter process.
• Monitor proposals for submission.
• Assist in the collection of effort reports for their respective schools.

Principal Investigators

• Propose levels of effort consistent with the effort required to complete a project, in relation to the PIs’ total effort expended under their UMB appointments compensated by their IBS.
• Monitor their total effort commitment levels to ensure they are not committed at a level greater than 100%.
• Adjust commitments if required due to awarding of proposals that, aggregated with other funded proposals and non-sponsored activities, would commit over 100% effort.
• Work according to their commitments.
• Monitor the effort of the other key personnel on their awards to be sure that effort commitments are being
• Certify their own effort reports and possibly those of others working on their awards.
• In cooperation with their departmental administrators, monitor the charging of salary on their awards to ensure proper costing.
• Identify and seek approval of mandatory and voluntary uncommitted cost sharing.

Departmental Administrators

• Assist Principal Investigators in the preparation of proposal budgets and related effort commitments.
• Track committed effort levels for individuals within their department.
• Coordinate the collection of effort certifications for individuals within their departments.
• Based on correspondence with Principal Investigator, prospectively establish salary charging on sponsored awards (or pre-award spending if necessary) and companion cost sharing source in correlation with how the effort is to be spent.
• Perform necessary cost transfers/cost sharing documentation to ensure salary charging is in line with effort certifications.

Office of the Controller - Payroll

• Works with the department’s payroll administrator and Human Resources to ensure that all payroll forms are completed accurately and timely.

Office of Research and Development

• Reviews proposals for submission.
• Assists faculty and departmental administrators to negotiate effort levels with sponsors.
• Works with SPAC and the departments to assure the timely set-up of awards so that payroll may be processed in a timely manner.