Time and Effort Certification

Time and Effort Certification

Procedure: 8-31

Effective: May 1, 2019

Owner: Office of Sponsored Programs

Oversight Executive: Executive Director, Office of Sponsored Programs

Latest Review: January 19, 2021

Procedure Steps | Scope | Policy | Responsibility | Distribution

Scope

As a recipient of federally sponsored projects, the University is required under guidance provided in the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (2CFR200, aka Uniform Guidance, UG), subpart 430 (i) that salaries and wages charged to Federal awards are based on records that accurately reflect the work performed. To provide reasonable assurance of existence of a system of internal control, UVA effort reports confirm work performed on sponsored and non-sponsored activities based on the current employment agreement ( appointment letter), and, in doing so, verify the accuracy of payroll charges to the sponsored programs. All effort spent on individual sponsored programs that was either 1) directly charged to the award (Sponsor supported) or, 2) was committed in the proposal as cost share from another funding source must be documented and certified.

To confirm that the distribution of activities represents a reasonable estimate of the work performed during the period, the reports are to be signed/dated by the employee, principal investigator, or responsible official(s) having sufficient knowledge that the work was performed.

Definitions

Committed Effort
Effort committed in a sponsored program proposal. Commitments are made when a percentage of effort or a specified dollar amount of salary/wage are devoted in the proposal. Such effort must be accounted for according to the terms of that commitment. These commitments can either be funded directly from the sponsored project or as “cost sharing” through other funding sources.

Institutional Effort
Effort expended on University-related activities (research, instruction, other sponsored activities and administrative activities) for which compensation is made. In the case of faculty with clinical appointments their total institutional effort includes both the portion of University related activities (described above) as well as their clinical work for which compensation is received from the University Physicians’ Group (UPG).

UVa Effort Reports
University certification forms for the periodic confirmation of individual effort of faculty, graduate research assistant, Medical Center professional staff, University staff, and wage employees who work on sponsored awards.

Payroll Source and Amount List
A report detailing pay (subject to effort reporting) by individual and by source for the effort reporting period in process.

Cost Shared Effort
That portion of committed effort for which an individual is not compensated by a sponsoring agency but which the institution agrees to fund from other sources.

National Institutes of Health Salary Cap 
A sponsor-imposed ceiling on salary charged directly to NIH sponsored awards. For example, if an employee earning $110k worked on an award full time (100%) having a salary cap (hypothetical) of $100k, only $100k or 90.9% of their salary could be direct charged to the award. The remaining 9.1% of the salary must be supported by the institution from non-sponsored program funding sources. Additionally, this ‘excess’ salary cannot be claimed or counted as cost share should there be such a commitment.

Current and prior NIH salary caps are at http://grants2.nih.gov/grants/policy/salcap_summary.htm

Referenced Policies

RES-009 Compliance with Sponsor Requirements
FIN-027 Time and Effort Certification

Responsibility

All employees involved in certifying effort, should understand that severe penalties and cost disallowances could result from inaccurate, incomplete, or untimely effort reporting.

The Office of Sponsored Programs (OSP) Director of Post Award is responsible for:

  • Establishing procedures for effort reporting which are consistent with the requirements of the UG
  • Generating and distributing effort reports and the corresponding payroll source and amount lists on a periodic basis
  • Monitoring School/Departmental responsibilities related to effort reporting to help ensure University compliance, including the timely certification of the reports
  • Providing assistance to School/Departmental administrators with the effort reporting process
  • Maintaining certified effort reports for review purposes

School/Departmental Administrators and Fiscal Contacts are responsible for:

  • Distributing effort reports in a timely manner to various groups within their organization units
  • Reviewing certified effort reports to ensure proper completion and signature/date in accordance with University procedures
  • Ensuring timely review, certification, and return of effort reports
  • Ensuring that cost shared effort on sponsored projects is properly reported on effort reports
  • Coordinating any payroll adjustments that are necessary based upon noted discrepancies by those certifying their effort reports
  • Communicating effort reporting responsibility changes to OSP Post Award Financial Compliance

Principal Investigators, those with sufficient knowledge of work performed, and Department Chairs are responsible for:

  • Certification of all institutional effort (research, instruction, other sponsored activities, administration, clinical work) are consistent with the employment agreement for which compensation is made
  • Noting any errors on the effort reports and ensuring, in collaboration with their local Labor Distribution personnel, that payroll and labor distribution adjustments are made when necessary in accordance with the University and Sponsor policies and procedure
  • Ensuring that committed cost share obligations are met and properly reported on effort reports

Distribution

Vice President and Provost, Vice President for Research and Graduate Studies, Vice President and Chief Financial Officer, Deans, Associate Deans, School/Department Administrators, Fiscal Contacts, Labor Distribution Specialists, Human Resources Administrators, Principal Investigators, Classified Staff, Students and Wage personnel involved in sponsored research.

Procedure Steps

The following process is designed to account for University effort of faculty, professional staff, classified staff, graduate research assistants, and wage employees participating in sponsored programs in accordance with the UG.

EFFORT REPORTING PERIODS AND DISTRIBUTION SCHEDULE 

The University of Virginia’s Office of Sponsored Programs produces effort reports based upon employee classifications as noted in the following schedule:

School of Medicine (SOM) Non-Clinical Faculty and Clinical Faculty

Semi-Annually

Reports will be run twice a year, based on pay periods over two six month periods

 

 

 

Non-SOM Faculty

Semi-Annually

 Reports will be run twice a year, based on pay periods over two six month periods

 

 

 

Staff and Wage Employees and Graduate Research Assistants

Semi-Annually

 Reports will be run twice a year, based on pay periods over two six month periods

 

EFFORT REPORT GENERATION 

Effort reports will be generated approximately 45 days after an effort reporting periods noted above. It is expected that during these 45 days, units will review and reconcile salary charges during the recon@ process and submit labor distribution adjustments in Oracle prior to generation of effort reports.

EFFORT REPORT DISTRIBUTION

To ensure timely certification of effort reports, it is important to notify OSP Post Award Financial Compliance of any changes in the personnel responsible for managing this process at the schools and other units. Once the reports are distributed, it is the responsibility of the School/Departmental Effort Reporting Coordinator (ERC) to review reports for accuracy and make any necessary adjustments before forwarding to the Certifier to complete certification of reports in accordance with University and Sponsor compliance requirements and return them before the deadline to OSP.
INSTITUTIONAL EFFORT 

A faculty’s time can be spent on research, instruction, administration, or other activities, including proposal preparation, thus rarely they would devote 100% effort on sponsored projects. Salary support for teaching, administration, service, clinical activity, institutional governance and proposal preparation effort must come from non-sponsored funds, except for sponsored projects specifically awarded for those purposes.

Although all university activities must be included in a faculty member's effort for reporting purposes, not all of a faculty member's professional activities must necessarily be considered university activities. For example, external consulting for which the faculty member receives direct remuneration from the external entity, would normally be deemed as a non-university activity. Services on review panels or other advisory activities for federal sponsors that include an honorarium and/or travel reimbursement are also considered outside of total institutional effort.

THE EFFORT REPORT 

Effort reports are grouped as follows: Non-School Of Medicine Faculty, School Of Medicine Faculty (Non-Clinical), School Of Medicine Faculty (Clinical), Graduate Research Assistants, Staff, and Wage employees.

Effort reports for Medical Center Professional Staff, Graduate Research Assistants, Staff and Wage employees are generated according to the PI under whose supervision they work and the reports roll up for certification purposes under that PI’s name.
For example, PI Smith, has five (5) GRAs working on his/her projects, will receive a single GRA effort report with tabs for each Graduate Research Assistant. The reports will include compensation amounts and sources for PI’s certification.

The faculty effort report contains a varying number of sections depending on the type of employee for whom it is generated. These sections are as follows:

  • Non-Clinical Faculty: Sections I-III
  • Clinical Faculty: Sections I-V

SECTION I - SPONSORED PROGRAMS

Direct Salary Payments from Sponsored Awards

When labor distribution (LD) schedules have been established based on commitments of effort on sponsored awards, the after the fact salary charge in dollars and percentages appear in the report, identifying the sponsored project number/award number as well as the project title. The payroll distribution percentage is used as the basis for the faculty to review and confirm proportionate effort spent on the sponsored program. Faculty must record the effort in the section, Certified Effort, thus certifying that the portion of salary received from the sponsored project is commensurate with the effort spent on the project during the effort reporting period. NOTE: Certification must be completed and documented even if the Payroll percentage column reflects the same % as Certified Effort percentage column. Effort should be certified in whole percentages.

On rare occasions the effort report will not list a sponsored project/award against which actual effort has been expended and needs to be certified. In this case, the respective project-award combination, project title and Certified Effort percentage should be noted and affirmed on the effort report. Subsequently, there may be a need for a labor distribution adjustment (through the Retro Cost Transfer process if older than 90 days) to correct payroll commensurate with certified effort. Such instances must be noted in the effort report and discussed with Post Award Financial Compliance.

Cost Share as Committed in Proposal
If cost shared effort has been committed in an awarded proposal, certification of this commitment must be recorded either using a cost share companion award or identifying a non-sponsored award that provided the cost shared effort. It is critical that those certifying effort reports make the necessary adjustments in the Certified Effort percentage column for each funding source to take account of committed cost share.

It is critical that those certifying effort reports make the necessary adjustments in the Certified Effort percentage column for each funding source to take account of committed cost share.
For example, if a sponsored program has 10% of faculty effort as cost sharing, the CS PTAO should have a labor distribution line for 10% of salary charges on the CS PTAO. In situations where a CS PTAO is not set up, the 10% cost shared effort should be certified in Section I with the associated G&C award in which the effort was committed. The salary associated with the cost shared effort should be available and identifiable on a non-sponsored award in Section II, III or IV. The Sponsored Programs Total must be completed with a total institutional effort of 100% during the reporting period.

SECTION II - UNIVERSITY INSTRUCTION/OTHER

Salaries paid from non-sponsored funding sources other than University Physician Group (UPG) pay are listed in this section of the effort report. Payroll percentages are printed on the effort report, as in the Sponsored Programs section above, the Certified Effort percentage must be reasonably estimated and recorded for the period in the space provided. Certify all effort in whole percentages.

Effort committed to teaching, service, administration and proposal preparation effort for new and competing renewals is recorded here as these activities must be paid from non-sponsored funds, except for sponsored projects specifically awarded for those purposes.
NOTE: Typically cost share certified in the Sponsored Programs section is paid from salary sources listed in this section. As applicable, decrease effort in this section to “fund” effort that has been cost shared to sponsored programs.

NOTE: When cost share effort is certified on a Sponsored Program that does not have a cost share companion award, such effort must be identified against salary sources listed in this section. NOTE: Certification must be completed and documented even if the Payroll percentage column reflects the same % as Certified Effort percentage.

SECTION III - UNIVERSITY ADMINISTRATION

Only faculty with administrative appointments (e.g., Deans, Department Chairpersons, and Center Directors) should record their administrative effort here. Though the funding sources supporting these activities appear in Section II, it is important to reflect actual administrative effort in Section III, noting the downward adjustment to the appropriate account in Section II that absorbs these costs. Certify all effort in whole percentages.

The Non-Sponsored Programs Total can now be completed toward the 100% total institutional effort certification for the period at hand.

SECTIONS IV and V - CLINICAL ACTIVITY: Direct Patient Care and Hospital Related Activities

Clinical effort reports contain two unique sections: Section IV, referring to Direct Patient Care, and Section V, referring to Hospital and Related Activities. Clinical activity generally refers to duties undertaken by MDs who see patients (Section IV) and/or who participate in other hospital-related activities (Section V).

Section IV, Direct Patient Care, refers to all patient services paid through UPG and the School of Medicine. Effort in this section should accurately reflect the percentage of time expended on direct patient care. Certify all effort in whole percentages.

Section V, Hospital and Related Activities, refers to School of Medicine faculty who provide professional services to the UVA Medical Center. This includes the training of Hospital staff and administration of such activities, as well as other Hospital committee and administrative responsibilities. Effort in this section should accurately reflect the percentage of time expended on hospital and related activities. Certify all effort in whole percentages.
The total number of hours worked per week should correspond to 100% of institutional effort and should be recorded accurately.

TIMELY CERTIFICATION AND RETURN OF EFFORT REPORTS

It is expected that Effort Reports are properly completed, signed and dated within 45 days from distribution. Extenuating circumstances that prevent the timely certification should be brought to the attention of the OSP Post Award Financial Compliance. Beginning 46 days after distribution, automatic reminder email notifications will be sent out to the responsible School/Departmental contact.

After 45 days, effort reports go into a delinquent status and school or department contact and supervisor of the responsible report owner is notified. During the entire process, it is important for the school/department effort reporting contact to maintain an open line of communication with the OSP Post Award Financial Compliance group. Inadequate or incomplete responses may result in escalating the issues with effort certification to the respective Designees or Deans or Department Chairs. Delinquent effort reports can result in Post Award actions including: 1) moving all affected salary/wage charges that have not yet been properly certified to School/Departmental F&A PTAEOs, or 2) placing the respective project-award in an “on hold” status, thus not allowing any charges on the sponsored project and systematically redirecting all salaries to default to department’s suspense account.

SUFFICIENT KNOWLEDGE - AUTHORIZED CERTIFICATION

Effort reports should be certified ONLY by responsible officials with sufficient knowledge of the work performed. This is usually the principal investigator in charge of overseeing the project or collaborating faculty members who work on the project. In the event that the named investigator on the University-generated effort report is unable to certify the effort report, a surrogate who is knowledgeable of the work performed on the project will certify the report (e.g., the investigator’s Department Chair, a Co-investigator, Supervisor). In any audit situation it would be the responsibility of the person certifying the effort report to support that all certification requirements were met.

LEVEL OF PRECISION IN EFFORT CERTIFICATION

The federal government understands that certification of effort percentages is an estimate. The 2CFR 200 or Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards (commonly known as the UG) states that “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.”

Therefore, if the printed Payroll percentage reasonably reflects ones effort within a tolerable range (plus or minus 4%), then the amount may be confirmed as a reasonable estimate. If the difference between the estimate of effort devoted and the Payroll percentage for a project is greater than the tolerable range of 4%, then record the correct estimate.

For example, if the Payroll percentage for the project was 25% and the estimate of effort devoted is in the range of 21% to 29%, THEN 25% MAY BE RECORDED in the Certified Effort percentage column.

For example if the Payroll percentage for a project was 25% and the estimate of the effort is outside the tolerance range, 20% in this case, then 20% must be recorded in the Certified Effort percentage column.

NOTE: Any Certified Effort percentage for a sponsored project less than the Payroll percent, requires a labor distribution (LD) adjustment. The responsible certifier must alert the Department or Unit research administrator regarding the need for an LD adjustment.

CHANGE IN EFFORT DEVOTED FROM WHAT WAS PROPOSED

In making any post-award adjustments to committed effort, review sponsor regulations specifically on reductions in effort from what was proposed and approved. Substantial reductions (normally 25% or greater from proposed commitments) may indicate a possible change in the scope of work which will require sponsor approval. If devoted effort is reduced from what was proposed, then a labor distribution (LD) adjustment must be processed in order to bring payroll distributions in line with certified effort. Labor Distribution (LD) adjustments should be processed after monthly expenditure reviews allowing for future generation of more accurate effort reports. If adjustments are not processed within (ninety) 90 days of the transfer date, a retroactive transfer request must be submitted to OSP Post Award for approval.

Retro Cost Transfer Request Form: https://webapps.uvafinance.virginia.edu/retrorequest/

SALARY CAP - NATIONAL INSTITUTES OF HEALTH

Faculty members who received salary support under at least one NIH award and whose TOTAL University compensation (UVA base pay and UPG pay for Clinicians) exceeds the NIH salary cap limitation should pay special attention to the completion of their effort report.

The Department of Health and Human Services (DHHS) Appropriation Act for each fiscal year restricts the amount of direct salary an individual can receive from NIH awards to the rate for Executive Level II of the Federal Executive Pay scale. Please see the OSP website or check with OSP Post Award Financial Compliance personnel to verify the appropriate salary cap amount for the respective fiscal year or the time period in which you are certifying effort. Visit the NIH website at http://grants2.nih.gov/grants/policy/salcap_summary.htm to receive historical and current salary caps.

On the effort report, the value listed under Payroll percentage is that portion of TOTAL compensation that was paid by an award. Therefore, for all NIH awards, an entry in the Certified Effort percentage column that is less than or equal to the value under the Payroll percentage implies that the personnel has been paid at a rate that exceeds the salary cap limitation.

The following example and calculation tools help to clarify the scheduling of payroll dollars and/or and LD percentages to projects when the NIH cap is in play (For ease of explanation the salary and NIH cap dollars are not actual):

Dr. Smith commits 20% effort toward work on a particular NIH award. Dr. Smith’s annual compensation is $300,000, but the salary cap for the fiscal year at hand is $200,000. Therefore, $40,000 is allowed as the maximum amount of direct salary to be paid from the NIH project. The payroll percentage reflected on the Effort Report will be 13%, even though Dr. Smith likely contributed 20% effort to that project. In this example, the correct percentage of Certified Effort to enter on the effort report would be “20%”.

MAXIMUM PAYROLL AMOUNT: 20% x $200,000 = $40,000 (Effort Percentage x Salary Cap)

CALCULATED PAYROLL PERCENTAGE $40,000/$300,000 = 13% (Payroll amount/UVA only compensation base)

CERTIFIED EFFORT PERCENTAGE TO THE EFFORT REPORT = 20%
NOTE: Always certify the effort percentage that was expended, comparing this percentage to what was committed in the proposal.

K AWARDS - NATIONAL INSTITUTES OF HEALTH

NIH “Career Development Awards” (commonly known as K Awards) normally require that recipients commit/devote a minimum percentage of effort toward the objectives of the award. This is often defined at 75% effort. This requires the recipient to devote a minimum level of effort in conducting health-related research. Mentored K award recipients in the last two (2) years of support may reduce effort allowing for concurrent salary support from both the K award and a competing NIH research grant if recognized as a Principal Investigator or as Subproject Director. Regarding salary payments, the University may supplement the NIH salary contribution up to a level that is consistent with the institution's salary scale; however, supplementation may not be from federal funds unless specifically authorized by the federal program from which such funds are derived.

For additional information on effort requirements and salary costs related to K awards, visit the NIH web site at: http://grants.nih.gov/training/careerdevelopmentawards.htm

COORDINATION OF EFFORT REPORT CERTIFICATION AND LABOR DISTRIBUTION ADJUSTMENTS

The National Institutes of Health (NIH) require that “key personnel” on NIH awards commit “measurable effort” to any sponsored project on which they are named. In other words, it is not acceptable to list mentors and similar personnel on research proposals with 0 % effort. Any persons listed as key personnel must have at least 1 % of committed effort on the award in question, regardless of whether funds are being requested for those personnel. If salary for these types of personnel is not paid directly from the award, it should be cost shared support from other funding sources. See NOTE above under COST SHARE – COMMITMENTS OF EFFORT.

COORDINATION OF EFFORT REPORT CERTIFICATION AND LABOR DISTRIBUTION ADJUSTMENTS 

Since payroll costs represent the vast majority of sponsored program costs, it is important to consistently monitor the scheduling and charging of these costs. In order to prevent the need for labor distribution (LD) adjustments, monthly account reviews should be performed in accordance with the UVA recon@ procedure. Additionally, a minimum of forty-five (45) days from the end of each effort reporting period is provided for final review of salary/wage expenditures to better ensure the accuracy of printed effort reports and avoid labor distributions (LD) adjustments.

End of Activity