The Basics of Effort Reporting

1. The Basics of Effort Reporting Office of Sponsored Programs University of Houston- Clear Lake Presenter: Kathy Dupree, Assistant Director

2. Introduction • Purpose of Effort Reporting • Responsibilities pertaining to Effort Reporting • UH-System and UHCL supply the policies and tools • Individual researchers must plan, review, and certify effort • Goals for Today • Effort Reporting Scenarios • Policy and Forms • Feedback from Business Coordinators

3. The Principles of Effort Reporting Effort Certification • What is it? • A process for verifying how an individual utilized his/her time over a given period. • Based on actual university activities, but can be reasonably estimated • Reported retrospectively or “after the fact” • Can be reported annually, semi-annually, quarterly, or monthly

4. Principles of Effort Reporting • Reflected in percentages of total UHCL time (100%) regardless of number of hours. • Includes all effort expended to meet commitments as an UHCL faculty member (hours will vary from person to person!)

5. Effort Certification • Why is it important? • Required by Federal Regulation: OMB Circular A-21, section. J.10 • Documents that effort commitments have been met • Both Charged and Cost-Shared Effort • Provides support for salary charged to grants and contracts • Labor is the largest percentage of direct research costs on proposal budgets

6. Significant Risks of Non-Compliance • Impact on the university: • The University may owe direct cost refunds and payment of fines • Affect future funding with sponsors • Bad Publicity • Impact on the individual: • Possible criminal and civil charges • Payment of fines

7. Examples of Fines • Northwestern University: $5.5M, plus costs, attorneys fees and disallowances. • Thomas Jefferson University: $2.6M • Beth Israel Deaconess Medical Center: $920K • University of Chicago: paid a combined $650K to settle charges; University is reported to have paid $250K, while the PI accused of the impropriety reportedly paid $400K http://gwu.edu/~research/effortreporting.pdf

8. Specific Case Example • University of Minnesota – Nov. 1998 • Allegations of Misuse of NIH grant funds • $32 Million Settlement • Largest Settlement to date involving NIH grant http://www.upenn.edu/audit/control.html

9. Specific Case Example (Cont.) • University submitted fraudulent and/or false claims: • 36 of the 106 employees whose salaries were charged to the grant did not work on the grant • Salaries of employees were charged to the grant in excess of their effort spent on the grant • Annual leave accrued by personnel on other projects were charged to the grant • Time and effort cards were frequently signed by the Senior Administrator of the Medical School or by his assistant. http://www.upenn.edu/audit/control.html

10. Effort Certification Flowchart

11. UHCL’s Effort Certification Process • Effort Certification Reports must be completed by all monthly paid employees for whom any portion of their salary was charged to a sponsored project, at any time within the monthly certification period. • Effort Certification Reports must be signed by the employee (e.g., the PI or faculty member must personally sign his or her own report).

12. UHCL’s Effort Certification Process (Continued) • PI’s should also review and approve effort certification forms of other researchers working on the PI’s grant, as the PI is responsible for all activity on his/her grant. • Only if the PI or employee is no longer available should a department chair or other supervisory employee having direct knowledge of the unavailable employee’s total effort during the certification period approval the effort certification report.

13. Example #1 • Professor Apple Regular Full-Time Faculty, during academic year Usually works a 40-hour week, 8 hours M – F Works 2 hours per day on grant activities 100% Professional Effort is 40 hours Grant may be charged 10/40, or 25% time

14. Professor Apple (Continued) • If Professor Apple adds another grant, expecting to take another 2 hours per day of her time, and does not drop/decrease any other responsibilities, then her full professional effort for UHCL will now be 50 hours per week, and each grant may only be charged 10/50, or 20% effort. • If Professor Apple added the same second grant, but decreased her teaching or other non-sponsored activities by a like amount, working only 40 hours per week, then she could continue to charge the first grant 25% effort, and the same for the second grant.

15. Example #2 Professor Sour Grapes Regular Full-Time Faculty, 9 month academic year appointment Works average 40 hours a week in a teaching position during academic year Receives a federal grant award The grant will pay him for 25% Effort per semester

16. Professor Sour Grapes (Continued) Professor Sour Grapes refuses to obtain a course release to work on the project. Instead he works a full course load plus the grant. This scenario throws the professor into a overload situation: 100% effort instruction and 25% research = 125% Effort. Note: Effort cannot be greater than 100%.

17. Reporting Cost Sharing • If a staff or faculty member expends effort on a sponsored project but does not charge the project for his or her salary for the effort, the effort expended (AKA cost sharing effort) must be allocated to the project on the effort report and monthly timesheets. • For timesheets, you must record the cost center on which you are reporting cost sharing.

18. Example #3 • Professor Sunshine Regular Full-Time Faculty, during academic year, salary 9 pay 12 Usually works a 40-hour week, 8 hours M – F 100% Professional Effort is 40 hours

19. Professor Sunshine (Continued) • Professor Sunshine makes a deal to devote 1 month summer teaching time to another professor’s federal grant. • This would be cost sharing on the part of the university on the federal grant and should be reported as such on Professor Sunshine’s summer timesheets.

20. Example #4 • Professor Spring Chick Regular Full-Time Faculty, 9 month academic year appointment Works average 40 hours a week in a teaching position during academic year The professor states in her research budget proposal that her dean and school will financially support her effort on the grant The federal grant is awarded 25% Cost Sharing Effort each academic semester

21. Example #4 Professor Spring Chick (Cont.) • Professor Spring Chick must record on her timesheet and certification effort report each month the effort she has expended on the grant. • The information recorded will be cost sharing effort.

22. UHCL’s OMB Circular A-133 Audit Experience • What is the A-133 Audit: A required audit performed by an external audit firm (in our case KPMG), and submitted to the federal government • Transactional Testing • Salaries/Wages, Equipment, Subcontracts, IDC, Financial Reporting, Financial Aid, Controls, Effort Reporting

23. Example of A-133 Audit Finding • George Washington University • FY 1999: Auditors published finding related to Effort Reporting • Low percentage of reports certified and returned • University Management Response • Changed Report Structure • Established Monitoring Mechanisms • FY 2000 – 2003: No published findings related to Effort Reporting http://www.gwu/~research/effortreporting.pdf

24. GWU’s OMB Circular A-133 Audit Experience • Questions asked by external auditors • How was actual time tracked for different activities? (research, teaching, training, administration)? • What was the specific procedure when a change in effort/salary distribution was needed? • What is the actual process of reviewing effort certification reports? • Has anyone questioned your report once it was signed and returned? http://www.gwu.edu/~reserach/effortreporting.pdf

25. What does this all mean? Bottom Line: Effort reporting is a hot issue with Federal investigators (is on DHHS Audit Work Plan), and in the future external auditors will be performing a more in-depth review of universities’ practices and records.

26. UHCL’s Effort Certification Report • Personal Information • Name and EmplID • Department and Title • Compensation Received During Reporting Period • How Salary was Charged • Effort Related Compensation (Instructional & Research) • Cost Sharing Effort • Certification of Effort

27. UHCL’s Effort Certification Report (Continued) • Office of Sponsored Programs will send effort reports monthly to the business coordinators for researchers to complete with their monthly timesheets.

28. Effort Certification Report

29. Summary • Will be tracked in the Office of Sponsored Programs • The Effort Certification Report can be included when the researcher signs his/her timesheet • Purpose – to track the researcher’s effort on federal grants/contracts

30. Questions and Answers Point of Contact: Kathy Dupree Assistant Director, OSP 281-283-2141 dupree@cl.uh.edu