As a recipient of federal funds, the University maintains an accurate payroll distribution system allowing for certification of effort devoted to sponsored research projects on a semi-annual basis. This certification provides assurance that salary and wage charges made to sponsored projects as direct costs or to meet cost-sharing requirements are appropriate and reasonable in relation to the work performed. OMB 2 CFR Part 200 Subpart E §200.430 contains the federal regulatory standards for documentation of personnel expenses on sponsored projects.
This policy applies to all federally and non-federally funded sponsored awards. This policy will also facilitate compliance with the University’s system of internal controls that includes an after-the-fact review of interim salary and wage charges made to sponsored projects based on budget estimates, defining authorized effort certifiers, and clarifying roles and responsibilities for the effort certification process.
II. Who is Affected by this Policy
This policy should be understood by relevant University faculty and staff, including Principal Investigators (PIs), Grant Managers, Department Managers, Department Chairs/Directors, Deans, Dean for Research, Sponsored Research Accounting (SRA), and the Office of Research and Project Administration (ORPA).
Cost Sharing, Mandatory
Project costs that are not paid by the sponsor and are required as a condition of the award. Mandatory cost sharing must be tracked and reported.
Cost Sharing, Voluntary Committed
Costs specifically pledged on a voluntary basis and specifically included in the award budget. Voluntary committed cost sharing must be tracked and reported.
Cost Sharing, Voluntary Uncommitted
Costs not required by the sponsor or included in the award budget. Voluntary uncommitted cost sharing is not quantified at the proposal stage and should not be tracked or reported at the award stage.
An after-the-fact review of interim salary and wage charges made to sponsored projects based on budget estimates in order to confirm the final amounts charged are accurate, allowable and properly allocated.
Direct knowledge of work performed. PIs are required to certify effort reports because of their direct knowledge of the work being performed. In exceptional circumstances, someone other than the PI may be approved to certify effort reports.
Institutional Base Salary (IBS)
Annual compensation paid by the University for an employee’s appointment (9 or 12 months), whether that individual’s time is spent on research, teaching or other activities. IBS does not include bonuses, one-time payments, or incentive pay. Additionally, IBS does not include payments from other organizations or income that individuals are permitted to earn outside of their University responsibilities, such as consulting. IBS must be used as the base salary on all grant proposals unless there is a statutory limit on compensation (e.g. NIH cap).
Payroll or Salary Allocation
The process of assigning/encumbering salary charges to one or more sponsored projects and other University activities based on budget estimates, in reasonable proportion to the benefit provided.
The unit to which fiscal and program responsibility for the award would revert if, for any reason, the PI is unable to complete the assignment.
A person having firsthand knowledge of work performed on a sponsored project. For the purposes of this policy, typically, this is the PI of a sponsored project.
A project funded by a federal or nonfederal 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.
The sum of all activities that constitute workload at Princeton. This includes research, instruction, public service, other sponsored activities, and administration. University Effort totals 100% of the Princeton appointment, regardless of the number of hours worked.
The University is required by federal and non-federal sponsors to provide assurance that salary and wage charges made to sponsored projects are based on records that accurately reflect the work performed. Effort reports serve as the basis for meeting these regulatory requirements and are administered at the sponsored project level. These reports identify all individuals working on a particular project along with their applicable monthly payroll percentages and amounts directly charged or cost shared. PIs are required to perform an after-the-fact review to ensure all necessary payroll adjustments are made, such that the final amounts directly charged or cost shared to one or more sponsored projects are accurate, allowable, and properly allocated and reflected accordingly on the effort reports.
Degree of Tolerance
OMB federal regulations recognize 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 reasonable degree of tolerance is appropriate.
In considering effort certifications for sponsored activities, if the estimated payroll percentage or amount on the effort report is reasonably commensurate with the actual work performed (within a tolerable variance threshold of plus or minus 5%), then the amount may be certified as final. If the estimated payroll percentage or amount varies by more than 5% from the actual effort, then the PI should inform an authorized department administrator to process an adjustment to reflect the appropriate payroll percentage and amount on the sponsored project before certifying as final.
Effort reports must be certified by the PI as a responsible person having firsthand knowledge of the work performed toward specific sponsored activities. In exceptional circumstances, someone other than the PI may be approved to certify effort reports. Departments should contact SRA for assistance in these matters.
Once certification of salary and wages has been completed, only in rare circumstances will adjustments be permitted. If adjustments are necessary to previously certified salary and wage charges, the transfer must be made in accordance with the University's Cost Transfer Policy. (Please see the Cost Transfer Policy for more details and related procedures.)
Effort Certification Frequency & Timeline
The University’s effort certification process occurs semi-annually for work performed during periods July to December and January to June.
PIs have 30 days to certify their effort reports. If effort is not certified by the certification due date, a 30-day escalation period begins in which the PI’s Chair/Dean is notified about the uncertified effort report(s). If effort is not certified by the escalation due date, the cost will be moved by SRA to non-sponsored funds. Please see the Effort Certification procedures document for more details.
VI. Roles and Responsibilities
6/04/21 - Updated policy to reflect the semi-annual process for effort certification effective FY2020.
9/20/19 - General: Language clean-up and updates to reference Prime, remove redundant information.
Policy: Add specificity to the frequency of effort reporting
10/31/18 - Updated PI Salary Certification Procedure, per M. Kotsovolos.
10/1/18 - Updated Executive Sponsor listing.
2/27/17 - Updated to align with current business practices and our Prime systems implementation.
8/29/16 - Updated to reference OMB Uniform Guidance regulations.
6/27/2011 - Approved.