Module 6: Effort Reporting and Certification

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Module 6 Effort Reporting and Certification

• Office of Research and Sponsored Programs
• The University of Mississippi
• 100 Barr Hall 662-915-7482
• www.research.olemiss.edu

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Module 6 provides in-depth details on the effort
reporting and certification process, including

• What is effort?
• What is effort reporting?
• What is effort certification?
• Why are effort reporting and certification
  necessary?
• What is 100 effort?
• The effort reporting and certification process
• Corrections to effort reports
• Risks of non-compliance

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What is effort?

• Effort is the time spent working on a particular
  project.
• It can be time directly charged to a project
• It can be time donated to a project (cost shared)

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What is effort reporting?

• Effort reporting is the federally mandated
  process of reporting and certifying to federal
  agencies that the effort charged or cost shared
  to a sponsored project has actually been
  completed.
• Effort reporting is the responsibility of the
  employee who is working on the project.
• Further

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What is effort reporting? (Cont.)

• Its a reasonable estimate
• Its expressed as a percent (effort reporting
  should always total 100, no more no less)
• Its not based on a 40 hour week its based on
  effort
• Its direct charged effort plus cost shared
  effort
• The of salary charged to a sponsored project
  the of salary cost shared on a sponsored
  project should approximately the effort
  expended on the project

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What is 100 effort?

• 100 effort is determined by the employment terms
  of the University
• For faculty members, 100 effort is defined in
  the appointment letter (teaching, research,
  service, administration, etc.)
• For staff members, 100 effort is defined in the
  position description

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What is effort certification?

• Effort certification is certifying (confirming
  the truth or accuracy of) effort that is directly
  charged, as well as effort that is cost shared by
  faculty, graduate students and staff working on
  sponsored projects.
• Effort certification is the responsibility of the
  project director or department head
• The person certifying the effort must have
  first-hand knowledge of the effort expended

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Why are Effort Reporting and Effort Certification
necessary?

• Required by the federal government
• Salary/wage charges to a sponsored project are
  allowable costs only if they are
  supported/documented by an Effort Reporting
  system

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The effort reporting and certification process

• The process begins at the proposal stage
• Effort is proposed
• A commitment is made to the sponsor
• Proposed effort can be gt100, but think about how
  to reduce to 100 if more proposals are funded
  than expected
• The process continues through the entire time
  that you are devoting time to the project
• Salary/wages are charged to the project or cost
  shared according to commitment made to sponsor

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How and when is effort reported and certified?

• It depends on whether you are
• Exempt employee paid from or cost shared on a
  federal project
• Non-exempt employee paid from or cost shared on a
  federal project

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Exempt employee paid from a federal project
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Exempt employee with salary paid from a
federally-sponsored project

• If a portion of your salary is paid from a
  federal project (fund 30), a Personnel Activity
  Report is generated quarterly by the SAP HR
  system
• The beginning and ending dates of the report
  coincide with payroll dates
• Report is campus mailed from the Accounting
  Office to Department Chairs and Deans for
  distribution to Investigators
• Should be completed and returned to Accounting
  Office within 30 days

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Exempt employee paid from a federal project
Activity Report Sections

• Employee Information
• Direct Charges
• Cost Sharing
• Certification
• More on each section

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Exempt employee paid from a federal project
Activity Report Employee Information

• Employee Information Section contains
• Employee name (pre-printed)
• Personnel number (pre-printed)
• Department (pre-printed)
• Pay period (pre-printed)
• (See next slide for example of this section.)

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Employee Information Section

• UNIVERSITY OF MISSISSIPPI
• PERSONNEL ACTIVITY REPORT
• FOR SALARIED EMPLOYEES ON CONTRACTS GRANTS
• Name SMITH, PAT Pay Period
• PER 00000 06/24/2005
• 09/23/2005
• Department RESEARCH
• Address 123 RESEARCH

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Exempt employee paid from a federal project
Activity Report SectionsDirect Charges

• Direct Charges Section
• Cost center/internal order numbers are preprinted
  with of pay charged to each account
• If the shown does not correspond with of
  actual effort, space is provided to enter
• Corrections require submission of a UM Personnel
  Form 3 to adjust charges between accounts
• Form 3 should be submitted to HR at the same time
  Activity Report is returned to Accounting
  Department
• (See next slide for example of this section)

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Direct Charges Section

• Direct Charges Page 1
• __________________________________________________
  ______
• Original Correct
• Cost Object Distribution Distribution
• Internal Order Charged (If Different)
• 250220000 RESEARCH 50.0 _________
• 300123456 NIH 50.0 _________
• _________ _________ _________
• _________ _________ _________
• Total Distribution 100 100

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Exempt employee paid from a federal project
Activity Report SectionsCost Sharing

• Cost Sharing Section
• Space is provided to enter internal order numbers
  and of employee time devoted to projects as
  cost sharing
• (See next slide for an example of this section.)

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Cost Sharing Section

• Cost Sharing
• __________________________________________________
  ______
• Internal Order Distribution
• _________ _________
• _________ _________
• _________ _________
• _________ _________
• _________ _________

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Exempt employee paid from a federal project
Activity Report SectionsCertification

• Certification Section
• Must be signed by the project director or
  department head (person certifying must have
  first-hand knowledge of the effort expended)
• Certification is confirming the truth or accuracy
  of the report
• (See next slide for an example of this section.)

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Certification

• Certification
• __________________________________________________
  ______
• I certify percentages reported correspond to the
  effort devoted to each project by this employee.
• Amounts reported as cost sharing were paid from
  non-federal sources.
• ______________________________ _______________
• Department Head or Project Director Date

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Exempt or non-exempt employee cost shared on a
federal project
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Exempt or non-exempt employee with salary cost
shared on a federally-sponsored project

• If a portion of your salary is cost shared on a
  federal project, you must submit a Personnel
  Activity Report for Cost Sharing
• Report is manually generated by the employee (you
  will not be prompted by SAP)
• Beginning and ending dates coincide with payroll
  dates
• Cost sharing must be from non-federal sources
• Should be completed and returned to Accounting
  Office within 30 days

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Exempt or non-exempt employee cost shared on a
federal project Activity Report Sections

• Employee information
• Cost sharing
• Certification
• More on each section

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Exempt or non-exempt employee cost shared on a
federal project Activity Report
SectionsEmployee Info.

• Employee Information Section
• Enter the employee name
• Enter the employee personnel number (in lieu of
  social security number)
• Enter the department name
• Enter the pay period

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Exempt or non-exempt employee cost shared on a
federal project Activity Report
SectionsEmployee Info.

• UNIVERSITY OF MISSISSIPPI
• PERSONNEL ACTIVITY REPORT FOR COST SHARING
• FOR EMPLOYEES ON CONTRACTS GRANTS
• Name __________ Pay Period
• SS __________ __________
• (use personnel no.)
• Department _______________

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Exempt or non-exempt employee cost shared on a
federal project Activity Report SectionsCost
Sharing

• Cost Sharing Section
• Enter project internal order numbers and of
  time devoted to the project as cost sharing
• Cost sharing must be from non-federal source

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Exempt or non-exempt employee cost shared on a
federal project Activity Report SectionsCost
Sharing

• Cost Sharing Paid from Non-Federal Sources
• __________________________________________________
  ______
• Internal Order Percentage
• Time on
• This Project
• _________ _________
• _________ _________
• _________ _________
• _________ _________
• _________ _________

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Exempt or non-exempt employee cost shared on a
federal project Activity Report
SectionsCertification

• Certification Section
• Must be signed by the project director or
  department head (person certifying must have
  first-hand knowledge of the effort expended)
• Certification is confirming the truth or accuracy
  of the report

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Exempt or non-exempt employee cost shared on a
federal project Activity Report
SectionsCertification

• Certification
• __________________________________________________
  ______
• I certify the percentages reported correspond to
  the effort devoted to each project by this
  employee.
• ______________________________ _______________
• Department Head or Project Director Date

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Non-exempt employee paid from a federal project
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Non-exempt employee paid from a federal project

• Time Sheets are completed twice a month according
  to a schedule published by Human Resources
• The Time Sheet generated and maintained in the
  department serves as the activity report for
  hourly employees
• Department copy is the official record of time
  worked
• Department must keep a copy of the Time Sheet in
  department files for review by University, State
  and Federal auditors
• Any wage payments disallowed due to missing Time
  Sheets will be the responsibility of the
  employees department

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Non-exempt employee paid from a federal project
Timesheet Contents

• Employee name
• Employee number
• Internal order or cost center number
• Department name
• Pay period
• Hourly rate
• Hours worked per day
• Signature of employee
• Signature of project director/department head

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Corrections to Effort Reports

• First, determine if a correction REALLY
  necessary.
• In the use of any methods for apportioning
  salaries, it is recognized that, in an academic
  setting, teaching, research, service, and
  administration are often inextricably
  intermingled. A precise assessment of factors
  that contribute to costs is not always feasible,
  nor is it expected. Reliance, therefore, is
  placed on estimates in which a degree of
  tolerance is appropriate.
• OMB Circular A-21, Section J.10.b.(1)(c)

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Corrections to Effort Reports (Cont.)

• Occasional retroactive adjustments to Effort
  Reports are possible, but they must be well
  justified and documented.
• Remember, the effort report has already been
  certified (confirmed to be true or accurate).

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Corrections to Effort Reports A word of caution

• Retroactive adjustment toward the end of a
  project period to use remaining project funds is
  almost certain to result in audit disallowance
  and refund to the sponsor.
• Requests for adjustment gt90 days beyond end of
  originally reported period of effort are handled
  on a case-by-case basis by the Accounting Office.
  

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Corrections to Effort Reports The Process

• If you REALLY need to make a correction to an
  Effort Report, heres how you do it
• Retroactive Adjustment of Exempt Employee Effort
  Report
• Retroactive Adjustment of Non-exempt Employee
  Effort Report

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Retroactive Adjustment of Exempt Employee
Activity Report

• Requires submission of a Revised Personnel
  Activity Report
• Report should cover the same pay dates as the
  original Activity Report
• Revised Activity Report must be certified by the
  Department Head or Project Director
• A complete justification should be attached
  explaining why the correct amounts were not
  originally reported
• If the change involves an adjustment between
  accounts, an HR Form 3 must also be submitted to
  HR at the same time the revised report is
  submitted
• The Accounting Department is required by the
  federal government (OMB Circular A-133) to report
  questionable transfers during annual audit
• Project Directors justification may be included
  as part of the report to the auditor
• Department Head or Project Director may be asked
  to provide additional information if the project
  is audited

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Retroactive Adjustment of Non-exempt Employee
Activity Report

• Requires submission of an HR Form 3 to adjust
  charges between accounts
• A complete explanation and justification should
  be included in the personnel form and maintained
  by the department for review during an audit

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Risks of Noncompliance

• Delinquent effort reporting may affect the
  Universitys (i.e., your projects) cash flow,
  since information on the report is sometimes
  needed to submit requests for payment
• Failure to submit effort reports on a timely
  basis will result in project accounts being
  locked, pending receipt of reports
• Retroactive adjustments may result in audit
  and/or disallowances of both direct and FA costs
• False reporting may result in penalties being
  imposed by the federal government
• False reporting may result in criminal charges
  against the investigator

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Resources

• UM Activity Report Policy
• http//www.olemiss.edu/depts/contracts/activityrep
  .html
• Personnel Activity Report for Cost Sharing
• http//www.olemiss.edu/depts/contracts/costshar.pd
  f
• Revised Personnel Activity Report
• http//www.olemiss.edu/depts/contracts/revactrep.p
  df
• HR Forms
• http//www.olemiss.edu/depts/HR/master_hrweb/hr2pa
  per.htm
• Accounting Department x6538