January 18, 2012 (rewrite)
A. General. The University of Idaho (University) is required by federal regulations and accounting standards to ensure that the apportionment of employee compensation accurately reflects the work performed by these individuals in connection with sponsored projects. This document sets forth University policy and procedures for the commitment and certification of effort (see also APM 45.22).
B-1. Cost Sharing: The portion of the total project costs for a sponsored project that is borne by the University rather than the sponsor. See APM 45.08 for definitions of types of cost share.
B-2. Effort. Also referred to as “actual effort,” is the pursuit of a particular activity. Effort is expressed as the percentage of one’s University appointment devoted to one or more activities.
B-3. Effort Reporting. The process through which the University verifies and documents that the effort expended by an employee is commensurate with the effort he or she has committed to devote to those activities.
B-4. Institutional Base Salary. The annual compensation paid by the University for the appointment of an employee, irrespective of the nature of the activities in which the employee is engaged while fulfilling the requisites of their appointment; e.g. research, instruction, service, and administration. The institutional base salary for each faculty member is listed in the faculty member’s annual salary letter. Base salary may not be increased by replacing organizational salary funds with sponsored funds. See OMB Circular A-21,§J10d(1); NIH Grants Policy Statement.
B-5. Person Months. The metric typically used in sponsored project applications to express the amount of effort that Principal Investigators (PIs), other faculty, or key employees devote to a specific project, expressed in terms of time rather than a percentage of one’s appointment.
C. Federal Guidelines: As a recipient of sponsored project funding, the University must comply with federal regulations and procedures to ensure that expenses charged against sponsored project awards are allowable and allocable to those projects.
C-1. OMB Circular A-21, §J10 requires that educational institutions maintain a payroll distribution system that allows for the documentation of salary and wage apportionment.
C-2. OMB Circular A-21, §J10 also requires that this payroll distribution system be supported by activity reports that offer reasonable verification of the effort expended by employees engaged in sponsored projects at the institution. Federal regulations acknowledge that a precise assessment of the factors that contribute to costs is not always feasible, given that instruction, research, service, and administration are inextricably intermingled in an academic setting. They, therefore, admit a degree of tolerance in the estimation of effort expended on sponsored research. See: OMB Circular A-21, §J10b(1)(c).
a) The University follows this directive by monitoring salary allocations and requiring periodic reporting of effort by any University employee whose salary is charged or cost shared to one or more sponsored projects.
b) Reported effort must be a reasonable accounting of all institutional activities for which an employee is paid by the University and must be validated by the employee whose activity is being reported or by responsible personnel who have suitable means of verifying that the work was performed. See: OMB Circular A-21, §J10b(2)(b)
c) Failure to produce reasonably accurate estimates of effort or to otherwise comply with federal cost requirements can result in financial penalties, expenditure disallowances, withholding of future sponsored project awards by an agency, and damage to the reputation of the University. Providing inaccurate estimates of effort, whether knowingly or through carelessness or mismanagement, may be regarded as fraud and may subject the University and the certifying employee to civil proceedings and criminal prosecution.
D. Process/Procedures. Effort reporting and certification begins at the proposal stage and is ultimately accomplished through review and verification of Personnel Activity Reports (PARs).
D-1. Proposal stage. Faculty and professional staff with full-time appointments at the University are expected to devote no fewer than forty (40) hours per week in the fulfillment of their institutional responsibilities. (See Faculty Staff Handbook 3120, Faculty Obligations during Period of Appointment; 3140, Performance Expectations for Faculty; and 3260, Professional Consulting and Additional Workload.) Although the University defines the minimum effort that may be expended on University obligations, the University imposes only two constraints that establish an upper limit on effort.
When preparing proposals for sponsored projects, the primary responsibility for establishing a reasonable estimate of the effort necessary to carry out the project rests with the PI.
a) In determining the amount of effort that will be devoted to the proposed project, the PI must consider existing effort commitments to other sponsored projects, University duties associated with his or her appointment, and the ability of other key project personnel who are to be involved in the project to make contributions of effort necessary for its success.
b) In addition to ensuring that proposed effort commitment conforms to University expectations and policy, the PI must also make certain that it is consistent with the parameters established by the sponsor.
c) See: Faculty Staff Handbook 3120, Faculty Obligations during Period of Appointment; 3050 Position Description; and 3260, Professional Consulting and Additional Workload for additional information regarding assessing the appropriate amount of effort to propose on sponsored programs.
D-2. Expression and Calculation of Proposed Effort in a Proposal. Proposed effort should be stated in terms that are consistent with sponsor requirements.
a) While federal agencies may require that proposed effort be expressed in terms of person months, the University requires that employees certify actual effort expended in terms of percentages of effort.
b) The Office of Sponsored Programs (OSP) will provide mechanisms to assist with the translation of effort between the two metrics a) above.
c) Calculating effort using a percentage basis fosters compliance with effort reporting requirements by encouraging an employee to estimate his or her effort on a given activity as a percentage of his or her total University activities rather than as a fraction of a fixed time-period (such as the forty-hour week). This process acknowledges that some fluctuation in effort levels is inherent in the conduct of academic activities.
D-3. Accurate Tracking of Effort via the Electronic Personnel Action Form (EPAF): Because the PAR System is based on payroll records,it is crucial that the Electronic Personnel Action Forms (EPAFs) both for new awards and for terminating awards are accurately and expeditiously completed and entered into the payroll distribution system.
a) Salary allocations associated with a new award must be reviewed and approved by the PI(s) for the project prior to the entry of this information into the payroll system.
b) Consistent with committed effort, distributions of salary on sponsored project or cost sharing accounts should coincide with the commencement of actual effort on the sponsored project.
c) In consultation with the employee, the Grant Administrator (GA) provides the cost shared effort to be included.
D-4. Unit and PI Effort Management. Once a sponsor makes an award, the provisional effort commitments included in the proposal become mandatory, and the oversight and reporting of effort for faculty and staff (see APM 45.22 B-3). associated with the award becomes required.
a) Faculty and staff with salary charged to or committed as cost sharing for one or more sponsored projects must: review initial salary allocations, regularly monitor actual effort, and certify effort through the completion of a PAR.
b) PARs must be completed by faculty and professional staff three times per year as indicated on the Effort Reporting Calendar located here, and monthly for all “other” employees. The University defines the classification of “other” as including classified staff, RA/TAs, and temporary employees paid from two or more sources of which at least one is a sponsored project. [ed. 4/12].
D-5. Personnel Activity Report Form (PAR). The mechanism by which effort is verified and reported is the University of Idaho Personnel Activity Report (PAR).
a) The electronic PAR system is located in the University of Idaho VandalWeb System.
b) Instructions and training on PARs is available on the Training tab of the OSP website.
c) In consultation with the employee and PI, the GA provides the cost-shared effort to be included in effort reports.
d) Reported effort must be as accurate as possible. A five percent variance above or below the estimated effort for any given project is permitted without requiring modification of salary allocations.
D-6: Completion and Certification of PARs. Drawing on data from the University payroll distribution system, the PAR allows an employee to review payroll salary allocations, represented as percentages of total effort, and to indicate whether the allocations reasonably correspond to his or her actual percentage of effort expended on each project or activity.
a) At the close of each academic term (for faculty and professional staff) or monthly (for all employees in the “other” classification), a PAR will be electronically generated for, and made available online to, each employee whose compensation was either partially or totally charged to, or committed as cost share to a sponsored project.
b) PARs must be completed within 30 working days of the date they are released for completion.
c) If percent of effort allocations reasonably reflect actual effort expended during the reporting period, the employee confirming the accuracy of the data in the form should certify the effort report by selecting the “complete and submit” option that states: “I confirm that the above percentages of effort represent a reasonable distribution of the work performed by me during the period **/**/**** to **/**/****.”
d) If, the salary allocations included in the report are not commensurate with actual effort, the employee completing the effort report should indicate the appropriate percentages of effort or provide an explanation for the discrepancy in the “notes” section of the PAR. The employee completing the effort report should then select the “provisional complete and submit” option that states: “The above percentages of effort do not represent a reasonable distribution of the work performed by me during the period **/**/**** to **/**/****. A payroll cost adjustment will be processed to correct this effort distribution.”
i) In cases in which actual effort differs from estimated effort by more than five (5) percent, the certifier shall notify the appropriate GA that a payroll cost transfer should be done to realign actual and apportioned effort.(See D-7(c), below, for information on parties responsible for certification of effort.)
ii) A payroll cost transfer request must be submitted and processed within 45 working days of the provisional certification.
iii) Upon final completion of the payroll adjustment in the payroll ledger by Payroll Services, the PAR that was provisionally approved will be reset by the Office of Sponsored Programs (OSP).
iv) The employee will receive email notification that the PAR is ready for recertification. The PAR must be recertified within 30 days of receipt of this notice.
v) In the event that an effort report does not include a project or activity for which the employee expended effort during the reporting period, the employee shall contact the GA for resolution.
D-7. Unusual Circumstances: The University has made certain provisions to account for unusual circumstances with effort certification.
a) If circumstances occur that are out of the University’s control (e.g. weather conditions, power loss, etc.) dates for PAR certification may be adjusted accordingly.
b) Failure to certify PARs in a timely manner may result in suspension of activity on any or all sponsored projects involved and limit the ability of the noncompliant employee to apply for other sponsored project funding.
c) The University requires, in keeping with federal regulations, that an effort report be certified by the employee whose effort is being reported or by a responsible employee who has a suitable means of verification (direct and personal knowledge) of the effort expended. (See OMB Circular A-21 J10c(2)(c)).
i) PIs and Co-PIs should certify their own effort reports. PIs, providing they have direct knowledge, can certify the effort reports of the research staff working on their sponsored projects, but staff should complete their respective effort reports, if possible.
ii) Grant Administrators or other administrators are not presumed to have the requisite means of verification; they may certify effort reports only if they have written and signed confirmation of effort by an employee with direct knowledge of the activities of the employee for whom the report was generated and only when that employee is unavailable to perform the certification.
iii) If extraordinary conditions preclude a faculty member from certifying his or her effort, and no written and signed confirmation of effort can be obtained, the Vice President for Research and Economic Development, or his/her authorized designee, will determine the best means for verification of effort expended.
E. Contact Information. For information and help on completing Personnel Activity Reports please contact the Office of Sponsored Programs at 208-885-6651, or OSP Email.