Effort Certification on Sponsored Projects

EFFECTIVE DATE: July 1, 2011 |LAST UPDATED: February 16, 2012 | Policy Section: sponsored-research

Responsible Executive

Carolyn Ainslie, vice president for finance and treasurer

Responsible Office

Sponsored Research Accounting

Contact

Matt Kotsovolos, manager, sponsored research accounting compliance and systems, (609) 258-9551

I. Policy StatementBACK TO TOP

As a recipient of federal funds, the University must maintain an accurate payroll distribution system allowing for periodic certification of effort devoted to specific activities. This requirement is set forth in Office of Management and Budget (OMB) Circular A-21 Cost Principles for Educational Institutions, Section J.10.

This policy applies to all federally-funded and non-federally funded sponsored project or program awards.

The University must exercise due diligence in the review of periodic effort reports to ensure reasonableness in charging salary/wage costs to external sponsors and to document salaries that are being used to meet cost sharing requirements.

This policy will facilitate compliance with the University’s requirements by recognizing the “after-the-fact confirmation” method, clarifying roles and responsibilities, and defining authorized certifiers of effort.
 

II. Who is Affected by this PolicyBACK TO TOP

All units of the University that accept sponsored program or project funding are required to employ effort reporting practices that meet the requirements of OMB Circular A-21 section J.10. This policy should be understood by relevant University faculty and staff, including Principal Investigators (PIs), Grant Managers, Department Managers, Department Chairs, Deans, Dean for Research, Sponsored Research Accounting (SRA), and the Office of Research and Project Administration (ORPA)

III. Definitions

After-the-Fact Activity Records
Verification, using suitable means, and certification that work on a particular funding source was performed, and that salaries and wages charged are reasonable in relation to work performed

Base Salary
The annual compensation that the University pays for an employee's base appointment, whether that employee’s time is spent on research, teaching, administration, or other activities. Base Salary excludes compensation for an employee’s outside consulting activities and other compensation received from an entity other than the university. Base salary normally does not include supplemental pay on a separate appointment, or special pays, such as job-related allowances.

Cost Sharing
A portion of total project or program costs related to a sponsored agreement that is contributed to a sponsored project or program by someone other than the primary sponsor

Effort certification (formerly known as “salary certification”)
Method of documenting that the distribution of an individual’s salary during a specified period represents a reasonable estimate of the work performed by the employee during that period.

Firsthand Knowledge
Direct knowledge of work performed. If someone other than the principal investigator (PI) certifies the effort report, the certifier must be able to demonstrate suitable means of verification of the work performed.

Payroll or Salary Allocation
The process of assigning salary charges to sponsored projects and other University activities

Responsible Unit
The unit where fiscal and program responsibility for the project grant may revert if, for any reason, the Principal Investigator is unable to complete the assignment

Sponsored Project (or Sponsored Program)
A project funded by a sponsor through a grant, contract, cooperative agreement, or other instrument under which the University agrees to perform a certain scope of work, according to specified terms and conditions, for a specific budgeted monetary compensation

University Effort
The sum of all activities that constitute workload at Princeton. (See definition of Base Salary). This includes research, instruction, public service/other sponsored activities, and administration. University Effort totals 100%, regardless of the number of hours worked.
 

IV. PolicyBACK TO TOP

EFFORT REPORTING
OMB Circular A-21 sets forth the rules governing effort reporting. The University is required by federal and non-federal sponsors to assure that effort expended on sponsored activities justifies the salaries charged to those projects. The University provides this assurance by requiring periodic effort reports for each individual whose salary is charged (or cost shared) to one or more sponsored activities or projects during the effort reporting period. The effort reports indicate the percentages of the individual’s effort that are dedicated to the sponsored project(s). PIs responsible for these reports must judge, compare, and certify that efforts reported are reasonable. 

DEGREE OF TOLERANCE
OMB Circular A-21 states: “…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.”

In considering effort certifications for sponsored activities, if the payroll percentage on the effort report reasonably reflects one’s effort within a tolerable variance threshold (plus or minus 5%), then the amount may be confirmed as a reasonable estimate. If the difference between the estimate and the payroll percentage for a sponsored project is greater than the tolerable variance threshold of 5%, then the PI needs to inform the department manager to process payroll corrections to reflect the correct percentage effort.

FREQUENCY OF EFFORT REPORTING
Based upon guidance in OMB Circular A-21, Section J.10, the University certifies effort using the “After-the-Fact Confirmation” method. A-21 stipulates that effort reports should be prepared “…each academic term, but no less frequently than every six (6) months”. The University’s effort reporting certification process occurs at the end of each of the University’s three academic terms, which are September to January, February to June, and July to August.

EFFORT CERTIFICATION
Effort reports must be certified by a responsible person having firsthand knowledge of work performed or by using a suitable means of verification of the work performed toward specific sponsored activities. If someone other than the principal investigator certifies the effort report, the certifier must be able to demonstrate suitable means of verification of the work performed.

Once certification of salary has been completed, only in rare circumstances will salary adjustments be permitted. The transfer of salary charges that have been previously certified raises special issues. If it is necessary to adjust the salary charges for a previously certified effort period, the transfer must be made in accordance with University policies and procedures on salary re-allocations and cost transfers. The Cost Transfer policy states that “Certified effort should only be transferred from a sponsored project as a method of clearing an overdraft or removing an inappropriate charge and should normally be transferred to a nonsponsored research or cost sharing project grant.” (Please see the Cost Transfer Policy for more details and related procedures.)

COMPLIANCE WITH POLICY
If effort is not certified within one year of the certification due date, the cost will be moved to the Principal Investigator’s nonrestricted account(s) as designated by the PI. If the Principal Investigator’s nonrestricted funds are insufficient, the responsible unit’s department chair will designate appropriate departmental funds.

Compliance with the Effort Certification on Sponsored Projects Policy will be monitored through a regular reporting process. 
 
Each individual with responsibilities in University effort certification practices must thoroughly understand the proper method of reviewing, completing, and certifying the effort reports to ensure that documented effort percentages reasonably reflect effort expended toward individual sponsored activities during the report period.

The table in section VII defines roles and responsibilities in the effort reporting process.
 

V. Procedures BACK TO TOP

VI. Forms BACK TO TOP

VII. Contact Roles and Responsibilities BACK TO TOP

SRA COMPLIANCE & SRA ANALYSTS Establish & communicate policy & procedures related to effort certification which are consistent with the requirements of Circular A-21, Section J.10
PI/DEPARTMENT ADMINISTRATOR/DEPARTMENT CHAIRS & DIVISION HEADS/SRA COMPLIANCE & SRA ANALYSTS Understand policy & procedures related to accurate & timely certification of effort reports
SRA COMPLIANCE & SRA ANALYSTS Provide education to & heighten the awareness of those involved in the effort reporting process
SRA COMPLIANCE & SRA ANALYSTS Generate & distribute the periodic effort reports in a timely manner
DEPARTMENT CHAIRS AND DIVISION HEADS Oversee effective processes in the department to assist with compliance with this policy and associated procedures
DEPARTMENT ADMINISTRATOR Establish effective processes to assist incompliance with this policy and associated procedures
DEPARTMENT ADMINISTRATOR Assist & provide guidance to Principal Investigators/Certifiers in their accurate & timely certification of effort
PI Ensure that all committed effort obligations are accurately reflected on the effort reports
PI Ensure that his/her own effort and that of other individuals working on sponsored activities under their direction is certified accurately & in a timely manner
DEPARTMENT ADMINISTRATOR Coordinate/process any Labor Accounting adjustments necessary based upon discrepancies noted by the Principal Investigators/Certifiers
PI/DEPARTMENT ADMINISTRATOR/DEPARTMENT CHAIRS & DIVISION HEADS Take appropriate action when notified of outstanding effort reports
PI Respond to any questions posed by reviewers regarding the certification of effort on sponsored activities
SRA COMPLIANCE & SRA ANALYSTS Ensure follow-up actions are taken in instances of non-compliance in accordance with this policy & Effort Certification Procedures
SRA COMPLIANCE & SRA ANALYSTS Perform post-certification reviews to assist in compliance with Federal, Sponsor, and University requirements
SRA COMPLIANCE & SRA ANALYSTS Maintain certified effort reports as required by record retention policy and procedure
SRA COMPLIANCE & SRA ANALYSTS Assist with questions from individuals involved in the process

VIII. Update Log BACK TO TOP

6/27/2011

Approved


 

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