1

Effort Certification

As per UT Fiscal Policy FI0215

2

Salary and Wages

• Salaries and wages typically comprise approximately 2/3 of the direct costs charged to sponsored projects.

• Therefore it is important to verify that salary and wage charges are appropriate.

3

Uniform GuidanceSection “I”

• The new UG requirements removed the terms of activity/effort reports.

• Does this mean we no longer have to certify effort? NO!!!!

• Section I, requires that we must have internal controls in place and expenditure records support actual effort worked on projects.

4

Uniform Guidance

• As a condition to receive federal funding, institutions must maintain an accurate system for reporting the percentage of time (i.e., effort) that employees devote to federally sponsored projects.

5

Uniform Guidance

• To confirm that the distribution of activity represents a reasonable estimate of the work performed by the employee during the period…

• the reports will be signed by the employee, principal investigator, or responsible officials(s) using suitable means of verification that the work was performed.

6

First Hand Accountability

• The best option for supporting effort certified is through first hand accountability.

• The easiest way to ensure first hand accountability is for those certifying effort to certify through the effort certification system themselves.

• Written documentation from the employee must be on file in the department to support the effort entered by departmental admins.

What Constitutes Suitable Means of Verification?

“Suitable Means of Verification” comes in the form of support documentation that the department originates and keeps on file.

7

8

Support Documentation

• Acceptable support documentation can be:

– an e-mail – written correspondence signed by PI/employee– A hardcopy of current cost distribution w/approval

signature– a form developed by the department that allows

for an approval signature

9

Examples of Support Documentation

10

Be Advised

• Any documentation kept and used to verify the percentage of effort certified should match what has been entered into the effort certification system.

• This would include such items as calendars, class/advising schedules, progress/technical reports submitted to sponsor, time sheets etc.

11

When Certifying…

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

12

Accurately Reporting Effort

• Effort must be certified based on the amount of effort expended (paid or unpaid) on the project!

• This means departments are not permitted to certify effort based on budget.

• It is a violation of UT Policy and UG to first determine the amount of funds available for salaries and certify effort based on the amount of effort to equal these funds!!!

13

Real Life Examples

14

15

Significant effort settlements

Faculty time and effort devoted to NIH grants was overstated.Knowingly overstated time workedCharged more than 100% of salaryChronicle of Higher Education, March 12 2004

16

Significant effort settlements

• Harvard University (2004)– $2.4 million• Government was billed for salaries and expenses

unrelated to federal grants• Researcher spent fewer hours than promised on a

research study• Researchers not working on grant or did not meet

citizenship requirements• July 2, 2004 Chronicle of Higher Education

17

Significant effort settlements

Northwestern University (2003)$5.5 million

Researchers spent less time on NIH-sponsored projects than they reported.Misrepresentation of time spentFailed to comply with effort reporting standardsDOJ Press Release 02/06/03Chicago Tribune, February 7, 2003

18

Timeliness

• The IRIS effort certification system was designed for monthly online certification and automatic electronic salary transfers.

• Monthly certification is strongly encouraged as it allows for sponsored project billing to be kept accurate and up to date.

19

Timeliness

At a minimum, effort must be certified at least once for the entire semester and within 30 days of the end of the semester -January 30May 30August 30

or within 30 days after the grant or contract end date.

Who must Certify?

• Every monthly employee who works on a sponsored project, whether paid or unpaid, is required to certify effort.

• (The effort reporting system is the mechanism the University uses to document cost-shared salary expenses.)

20

21

Who can Certify?

• Direct supervisors can certify on behalf of their subordinates with a written or electronic record.

• It is critical that a person with first-hand knowledge of all of an employee’s effort certify for the employee.

22

Who can Certify?

• In some departments, central staff will do some or all of the effort certification entry.

• In these cases, departments are required to have a paper document, signed by the faculty, staff or student employee, verifying their effort.

• These signed documents must be retained for six years by the department.

23

Who can Certify?

• Effort is not based upon a certain number of hours worked per week, but represents the totality of effort which is compensated by the University– An employee cannot work “extra” on

administrative duties, preparing a proposal, etc.– If 100% effort is charged to a sponsored project,

make sure this is true!• Consider teaching workload, advising

students, writing proposals, administrative duties, clinical duties, etc.

24

Full workload

25

Types of cost sharing• Mandatory cost sharing

– Required by sponsor– Charges must be put on the restricted WBSE or companion cost sharing WBSE– Effort must be certified to the sponsored project

• Voluntary committed cost sharing– Volunteered in proposal and now required– Charges must be put on the restricted WBSE or companion cost sharing WBSE– Effort must be certified to the sponsored project

• Voluntary uncommitted cost sharing– Volunteered during the course of the project and was not included in the

proposal to the sponsor– Charges are not put on the restricted WBSE or companion cost sharing WBSE– Effort does not have to be certified to the sponsored project, but may be shown

on the certification with the variance code so that salary will not be transferred• See fiscal policy FI0210 Cost Sharing

Where Do I Go To Certify?

• Certification is accessible through an IRIS transaction

-OR-

• Effort can be certified online through the web-based ECR system using Internet Explorer or Netscape at http://ecr.tennessee.edu

26

27

• IBS includes regular pay, agency pay, and professorships

• IBS excludes additional pay, bonus pay, longevity, consulting or medical practice income earned outside the University

• Different pay rates or administrative appointments may or may not be included in IBS

Institutional Base Salary

28

• Some faculty work a 9-month academic year, but are paid over 12 months– To ensure that sponsored projects are

charged 1/9th instead of 1/12th, an electronic STV should be processed

Nine-month appointments

29

Committed effort• PI’s may overcommit their effort in proposals,

but must adjust this if awarded–Changes in level of effort by PI’s or key

personnel may require prior written approval by the sponsor• Absence for more than 3 months• Effort reduction > 25%

• Fixed price awards should show their fair share of effort. Auditors will look at these, too! If not appropriately charged, then Federal awards may be overcharged

30

PI & Dept responsibilities

• Appropriate, accurate, timely effort certification

• Departments should review uncertified effort report regularly

• Set up WBSE in advance, if necessary, to get salary charges in the right place

31

NIH salary rate cap

• NIH has a mandatory cap on salary rates that can be charged to sponsored projects– FY15 cap is $183,300 / 12 = $15,275 per month– Salary above the cap cannot be charged to

other Federal awards• Some NIH awards (K awards) have a minimum

effort level of 75%• http://grants.nih.gov/grants/policy/

salcap_summary.htm

32

IRIS Effort Transactions

33

IRIS Transaction ZECR

Screen will default to monthly

certification, a start date of

01/01/2002, and an end date of the

last month-end

34

ZECR (continued)

35

ZPR_ECR_UNCERTIFIED

36

ZPR_ECR_UNCERTIFIED (cont’d)

Choose Period (recommended

date is latest retro date,

currently 01/01/2011)

Choose Selection (most common is

cost center or funds center)

37

ZPR_ECR_UNCERTIFIED (cont’d)

38

http://ecr.tennessee.edu

39

POINTS TO REMEMBER

The effort certification process provides the means to verify that the salaries and wages charged to sponsored projects reflect the effort devoted to those projects.

40

POINTS TO REMEMBER

41

Effort certification documents the proportion of work time devoted not only to sponsored projects, but teaching and other activities as well – expressed as a percentage of total work time.

POINTS TO REMEMBER

• Inappropriate cost transfers can result in significant audit findings and penalties.

• It is very important to appropriately allocate/distribute effort when initially certified.

• Verify and document the employee’s effort before entering into the IRIS ECR system.

42

Effort Resets

• Effort resets can be requested for the current and previous calendar year.

• Reset requests must be made via e-mail correspondence.

• A valid reason for the reset must be included in the request.

• Support documentation may be required before effort can be reset.

43

Retro Pay Funding Changes

• The Office of Budget and Finance accepts pay funding changes for the current month and five months retroactively for those WBS elements requiring effort certification.

• Any pay funding changes submitted on WBSE’s prior to that six month window will be rejected and you will be asked to go through the effort reset and re-certification process.

44

Journal Voucher Support Documents

• A paper JV Support document is needed to move salary prior to January, 2014.

• The JV Support document will be used only to move unallowable salary charges from a grant/contract WBSE to a departmental cost center (E account), or an enrichment or discretionary type WBSE.

45

46

Sponsored Projects Accounting “Certification”

• The Modules listed as Training Classes related to Sponsored Projects can also be taken as a Certification.

• In order to gain a Certification in Sponsored Projects Accounting, you must take the training class and pass a quiz associated with the training module.

• Trainings toward the Certification can be obtained through HR training courses, Blackboard, or In-House training (upon departmental request)

• If taking the training through HR for the Certification you will need to take the quiz. Quiz’s are located in the Sponsored Projects Accounting project section in Blackboard.

• You must be registered as a participant within this project in Blackboard to gain access.

• To be setup in Blackboard contact Jay Taylor, Financial Compliance Officer, SPA @vtaylor@utk.edu or 974-0952

47

Training classes• 1 Overview of Accounting for Sponsored Projects• 2 OMB Circulars & Cost Accounting Standards• 3 Understanding F&A Costs• 4 Direct Costing• 5 Cost Transfers & Closeout• 6 Cost Sharing• 7 Subcontract Monitoring• 8 Advanced Topics• 9 Invoicing, Reporting & Cash Receipts• 10 Sponsored Projects Reports in IRIS• 11 Effort Certification• 12 Schedule of Final Charges (SFC)

48

• ROAR meetings are held on the 3rd Wed. of each month between 10-11am.

• Please consider attending these meetings. Each meeting has a specific topic and the meetings are open forum discussion. That means you should bring all your questions based on the topic being presented or just come to provide feedback about your experiences with others based on their questions.

• Also, the topics are chosen by topics/concerns supplied by attendees. The ROAR Committee would love to hear your topic requests.

• These meetings will give valuable information for you to take back to your department!

RAOR Meetings

49

?