Effort Certification Date Presenter New fiscal policy

Effort Certification Date Presenter

New fiscal policy coming soon • Existing fiscal policy FI 0205 – About 2 paragraphs about effort just isn’t enough • To ensure compliance with federal requirements as specified in OMB Circulars A-21 and A-110 • Other universities have extensive policies • Response to recent Federal audits and settlements 2

Recent effort settlements • Johns Hopkins University (2004) – $2. 6 million • Harvard University (2004) – $2. 4 million • Northwestern University (2003) – $5. 5 million 3

Recent effort settlements • Johns Hopkins University (2004) – $2. 6 million • Faculty time and effort devoted to NIH grants was overstated. • Knowingly overstated time worked • Charged more than 100% of salary • Chronicle of Higher Education, March 12 2004 4

Recent effort settlements • Harvard University (2004) – $2. 4 million • Government was billed for salaries and expenses unrelated to federal grants • Researcher spent fewer hours than promised on a research study • Researchers not working on grant or did not meet citizenship requirements • July 2, 2004 Chronicle of Higher Education 5

Recent effort settlements • Northwestern University (2003) – $5. 5 million • Researchers spent less time on NIHsponsored projects than they reported. • Misrepresentation of time spent • Failed to comply with effort reporting standards • DOJ Press Release 02/06/03 • Chicago Tribune, February 7, 2003 6

OMB Circular A-21 • OMB Circular A-21, section J. 10 – As a condition to receive federal funding, institutions must maintain an accurate system for reporting the percentage of effort that employees devote to federally sponsored projects – UT uses the “after-the-fact activity records” method 7

OMB Circular A-110 • OMB Circular A-110, Section (c), (2) and (3) – Recipients shall request prior approvals from federal awarding agencies if • There is a change in a key person specified in the application or award document • The absence for more than 3 months, or a 25% reduction in effort devoted to the project, by the approved project director or principal investigator 8

Who must certify effort? • Every non-hourly employee working on a sponsored project – Regardless of whether the costs were charged to the project • If costs weren’t charged, then this is cost sharing – see next slide about different types of cost sharing – Employees paid from restricted funds will receive an automated email reminding them to certify effort – Whether or not an email message is received, an employee who has worked on a sponsored project has the responsibility for certifying their effort 9

Types of cost sharing • Mandatory cost sharing – Required by sponsor – Charges must be put on the restricted WBSE or companion cost sharing WBSE – Effort must be certified to the sponsored project • Voluntary committed cost sharing – Volunteered in proposal and now required – Charges must be put on the restricted WBSE or companion cost sharing WBSE – Effort must be certified to the sponsored project • Voluntary uncommitted cost sharing – Volunteered during the course of the project and was not included in the proposal to the sponsor – Charges are not put on the restricted WBSE or companion cost sharing WBSE – Effort does not have to be certified to the sponsored project, but may be shown on the certification with the variance code so that salary will not be transferred • See fiscal policy FI 0210 Cost Sharing 10

How to certify effort • 2 methods – Individual employee certification on the web – Departmental certification in IRIS • By supervisor with first-hand knowledge • PI can certify for graduate students • By administrator with written after-the-fact documentation from the employee – Signed & dated email, letter – Verbal is not acceptable – Kept on file in department in case of audit 11

When to certify effort • After the work has been performed • Monthly is most frequent • Minimum is semesterly – Within 30 days of the end of the semester • Must be within 30 days after the sponsored project end date 12

Maintain payroll distribution • Regularly update employee’s payroll distribution when there is an expected change – Such as a new grant is beginning, an old one is ending, etc – This minimizes the amount of the payroll retro transfer that is done as the result of effort certification changes 13

Who can certify effort • The employee can certify their own effort on the web – A PI can certify for GRA’s • The departmental administrator can certify for an employee if proper documentation – After-the fact signed email or printout 14

Full workload • Effort is not based upon a certain number of hours worked per week, but represents the totality of effort which is compensated by the University – An employee cannot work “extra” on administrative duties, preparing a proposal, etc. – If 100% effort is charged to a sponsored project, make sure this is true! • Consider teaching workload, advising students, writing proposals, administrative duties, clinical duties, etc. 15

Institutional Base Salary • IBS includes regular pay, agency pay, and professorships • IBS excludes additional pay, bonus pay, longevity, consulting or medical practice income earned outside the University • Different pay rates or administrative appointments may or may not be included in IBS 16

Nine-month appointments • Some faculty work a 9 -month academic year, but are paid over 12 months – To ensure that sponsored projects are charged 1/9 th instead of 1/12 th, an electronic STV should be processed 17

Committed effort • PI’s may overcommit their effort in proposals, but must adjust this if awarded – Changes in level of effort by PI’s or key personnel may require prior written approval by the sponsor • Absence for more than 3 months • Effort reduction > 25% • Fixed price awards should show their fair share of effort. Auditors will look at these, too! If not appropriately charged, then Federal awards may be overcharged. 18

PI & Dept responsibilities • Appropriate, accurate, timely effort certification • Departments should review uncertified effort report regularly • Set up WBSE in advance, if necessary, to get salary charges in the right place 19

NIH salary rate cap • NIH has a mandatory cap on salary rates that can be charged to sponsored projects – FY 08 cap is $191, 300 / 12 = $15, 941 per month – Salary above the cap cannot be charged to other Federal awards • Some NIH awards (K awards) have a minimum effort level of 75% 20

Changes to certified effort • Once effort has been certified, it should not be changed. – This looks really bad to an auditor • It an error is discovered, then it can be fixed. – For example, the prior year R account was used instead of the new year R account • Any other changes should be charged to the departmental E account. 21

• • • Training classes 1 Overview of Accounting for Sponsored Projects 2 OMB Circulars & Cost Accounting Standards 3 Understanding F&A Costs 4 Direct Costing 5 Cost Transfers & Closeout 6 Cost Sharing 7 Subcontract Monitoring 8 Advanced Topics 9 Invoicing, Reporting & Cash Receipts 10 Sponsored Projects Reports in IRIS 11 Effort Certification Other – IRIS reporting for sponsored projects 22