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EFFORT REPORTING. University of Massachusetts - Dartmouth February 17, 2011. Objectives. Definition Types Principles Regulations Risks. What is Effort?. Proportion of time spent on professional activities (research, teaching, administration, and service)

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  1. EFFORT REPORTING University of Massachusetts - Dartmouth February 17, 2011

  2. Objectives Definition Types Principles Regulations Risks .

  3. What is Effort? • Proportion of time spent on professional activities (research, teaching, administration, and service) • Expressed as a percentage of the total professional activity for which an individual is employed by the institution

  4. Key concept!!! • Faculty effort not calculated on a 40-hour workweek

  5. Types of Effort • Direct-charged effort • Cost-shared effort • Proposed effort • Committed effort

  6. Direct-Charged vs. Cost-Shared Effort • Direct-Charged Effort: charged directly to a Funding Agency through the payroll • Cost-Shared Effort: expended towards a project, and the salary is not recovered from the project

  7. Proposed vs. Committed Effort • Proposed effort: amount of effort (in %) that is proposed in any sponsored project application, regardless of whether salary support is requested. • Committed effort: amount of effort (in %) promised by the institution in the proposal or the amended effort (in %) included in the award documentation.

  8. What is Effort Reporting? • Method of documenting the proportion of time devoted to these professional activities as a percentage of total professional activity. • Means that Federal agencies have to verify that salary dollars were charged properly, either direct-charged or cost-shared

  9. What kind of effort needs to be reported? • All employees who have salary or wages charged or cost-shared to sponsored project • All effort the University compensates the individual • Sponsored Activities • All effort expended on sponsored projects and cost shared • Institutional Activities • Department Administration • Instruction and unsponsored scholarly activity • Academic setting for faculty (Teaching, research, service, advising) • Clinical activity

  10. Principles of Effort Reporting • Based on actual university activities, but can be reasonably estimated • “After the fact” • Timing • Percentages of total time (100%) regardless of number of hours. • Includes all effort expended to meet commitments as a faculty member (hours will vary from person to person!)

  11. Faculty Effort Reporting • Faculty instructional effort and research effort are often inseparable (“inextricably intermingled”) • Faculty “research” effort often includes administrative (indirect) activities, e.g., proposal development • 100% effort is confusing

  12. Why do we have to have effort reporting? • It is a Federal requirement!! • OMB A-21 • OMB A-110 • A-133 Audit • Indirect Cost Proposal • Verify that salaries paid were warranted and effort commitments were met • Provides support for salary charged to grants and contracts • Labor is the largest percentage of direct research costs on proposal budgets

  13. OMB Circular A-21 Section J10. • Distribution of activity expended by employees, as a percentage • Reasonably reflect and a reasonable estimate of the work performed by the employee during the period • Suitable means of verification • Confirmation of personnel costs charged to sponsored agreements • Certification of all employee activities on an integrated basis(i.e., 100% effort)

  14. What’s at risk? • Audit findings/cost disallowances • High-Risk Organization designation • Corrective Action Plan required • Temporary withholding of payments or future awards

  15. Significant Risks of Non-Compliance • Impact on the university: • May owe direct cost refunds and payment of fines • Affect future funding with sponsors • Bad publicity • Impact on the individual: • Possible criminal and civil charges • Payment of fines

  16. University Audit Settlements • University of Minnesota: $32 M • Northwestern University: $5.5M • Thomas Jefferson University: $2.6M • Beth Israel Deaconess Medical Center: $920K • University of Chicago: $650K (PI paid $400K)

  17. National Science Foundation • Funds ~$1.3 billion annually for compensation at universities * • NSF Office of Inspector General (OIG) audited 30 Universities • NSF OIG’s goals were to: • Assess the adequacy of internal controls • Determine if salaries and wages were allowable, allocable, and reasonable *June 2007 “Report on Research Compliance”

  18. Common Themes from NSF Audits • Timeliness • Education and training programs • “Suitable means of verification” • “Independent internal method for ensuring the system’s effectiveness” (A-21 requirement)

  19. Common Themes from NSF Audits (cont’d) • Significant changes and updates to payroll distribution • 5% Variance threshold • Key personnel – required minimum effort and imputing cost sharing for the F&A proposal • Voluntary commitments in proposals • Summer effort and salary

  20. How can we Minimize Risk and Audit Findings? • Revise policy-keep it simple!! • Define “significant” change in effort • Define roles & responsibilities • Manage the high-risk areas • Avoid explicit cost sharing commitments in proposals • Training is needed for administrators and PIs • Implement an Independent Internal Evaluation of Your Effort Reporting Process • Instructions & information must be more readily accessible

  21. Thank you! • Contact: Amy Gustavsson Manager-Reporting, Cost Analysis and Compliance • Phone 617-496-4771 • Email Amy_Gustavsson@harvard.edu

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