Effort Certification on Sponsored Projects

Policy Section
Sponsored Research

Effective Date
July 1, 2011
Last Updated
September 20, 2019
Responsible Executive
Vice President for Finance and Treasurer
Responsible Office
Sponsored Research Accounting
Matt Kotsovolos
Assistant Director, Sponsored Research Compliance & Systems
(609) 258-9551

I. Summary

As a recipient of federal funds, the University maintains an accurate payroll distribution system allowing for periodic certification of effort devoted to specific activities. 2 CFR Part 200 Subpart E §200.430 contains the federal regulatory requirements for internal controls over certifying time expended on sponsored projects.

This policy applies to all federally-funded and non-federally funded sponsored 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 Policy

All units of the University that accept sponsored project funding are required to employ effort reporting practices that meet the requirements of federal regulations. 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
Records documenting the distribution of an individual’s salary during a specified period that represents a reasonable estimate of the work performed by the employee during that period.

Cost Sharing
The portion of project costs not paid by Federal funds (unless otherwise authorized by Federal Statute).

Effort Certification
Verification, using suitable means, that salaries and wages charged are reasonable in relation to work performed.

Firsthand Knowledge
Direct knowledge of work performed. PIs are required to certify effort reports because of their direct knowledge of the work being performed. If someone other than the PI certifies the effort report, the certifier must be able to demonstrate suitable means of verification of the work performed.

Institutional Base Salary (IBS)
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. IBS excludes compensation for an employee’s outside consulting activities and other compensation received from an entity other than the university. IBS does not include supplemental pay on a separate appointment, or special pays, such as job-related allowances.

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 award would revert if, for any reason, the Principal Investigator is unable to complete the assignment.

Sponsored Project
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 Institutional 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. Policy

All federal awards issued on or after December 26, 2014 must comply with OMB 2 CFR Part 200 (also known as Uniform Guidance). Awards issued prior to that date must comply with OMB Circulars A-21 and A-110, but may incorporate elements of the Uniform Guidance when appropriate. If an agency issues a new funding increment under Uniform Guidance to an existing award, then all activity incurred on or after December 26, 2014 will also be subject to Uniform Guidance. Activity incurred prior to this date will continue to be subject to OMB Circulars A-21 and A-110.

For the purposes of this policy, please note a general reference to "federal regulations" is being used, in lieu of specific references to each of the following CFRs: 2 CFR Part 200 (Uniform Guidance), 2 CFR Part 215 (Circular A-21) and 2 CFR Part 220 (Circular A-110). Please read the Notice of Award and the agency's terms and conditions regarding the applicability of these federal regulations.

The University is required by federal and non-federal sponsors to assure charges to sponsored projects for salaries and wages are based on records that accurately reflect the work performed. 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 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. 

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 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.

For fiscal years through FY2019, 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.

As of July 1, 2019, effort certification occurs semi-annually for the periods ending December 31st and June 30th

Effort reports must be certified by the PI, 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 the University's Cost Transfer Policy. The Cost Transfer policy states that certified effort should normally be transferred to a nonsponsored chartstring, unless there are extenuating circumstances. If applicable, certified salary adjustments may be used to support a cost share commitment. (Please see the Cost Transfer Policy for more details and related procedures.)


For FY2019 and prior fiscal years
If effort is not certified within one year of the certification due date, the cost will be moved to the Principal Investigator’s nonrestricted funds 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.

For FY2020

If effort is not certified within 30 days of the certification due date, the cost will be moved to a designated departmental fund pending final resolution.

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.

VI. Roles and Responsibilities

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

Revision Log

9/20/19 - General: Language clean-up and updates to reference Prime, remove redundant information.

Definitions: Alphabetized

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.