Effort Overview What is Effort? How Do We Account for It?

1. Effort Overview What is Effort? How Do We Account for It? Office of Research Compliance and Administration

2. Why Getting Effort Right is Important • Effort is the largest single project cost element by far. • Sponsors want the University to provide assurance that they are getting what they signed on for. • OMB Circular A-21 mandates that Universities maintain an effort reporting system that meets the criteria set forth within OMB Circular A-21. Office of Research Compliance and Administration

3. What is Effort Not? • An indication of whether you are full time or part time. • An indication of how many hours you work in a week. • Man hours or man months. Office of Research Compliance and Administration

4. If you spend two hours more per week working on a single project, how is it possible that you could at the same time be reducing the percent effort you spend working on that project? The Effort Brain Teaser Office of Research Compliance and Administration

5. Effort is an expression [percent/ratio] of how much of an individual’s contracted University time is spent on various University activities in relation to the sum total of all of the individual’s University activities. The denominator of the effort ratio is always 100%. What is Effort? Office of Research Compliance and Administration

6. Effort must be captured regardless of whether it is paid by the sponsor or internally funded (cost shared). Why? Why Record Cost Shared Effort? Office of Research Compliance and Administration

7. The Dreaded Overcommitment Word & Other Reasons • It is the only way to know whether an individual is overcommitted to an effort level that is greater than 100%. • It keeps sponsored project labor costs out of the department administration cost pool of the indirect cost rate calculation. • It generates an effort report that shows all of the individual’s activities, including cost sharing. • If the effort is mandatory or committed, the sponsor also requires that we account for it. Office of Research Compliance and Administration

8. Differentiating Effort • We account for sponsored effort and cost shared effort in the same way, but with different implications. • Charging the sponsor directly results in real dollars back to the department via “academic year buyout”. • Cost sharing salaries diverts department budget to the cost sharing budget at no real cost to the department. Office of Research Compliance and Administration

9. Effort Commitments are Binding Obligations Sponsors receive information on committed effort in different ways: • Proposal • Progress reports • Effort reports • Financial reports Office of Research Compliance and Administration

10. Sponsor Expectations • Sponsor expectations are based on the proposal and other University communications. • It is the University’s responsibility to ensure sponsors that systems are in place to monitor proposed vs. actual effort. • Proposed effort is binding. • Changes to proposed effort will follow the sponsor’s rules. Office of Research Compliance and Administration

11. The 25% Change Rule The most common rule shared by many sponsors states that any change in effort (up or down) that is greater than 25% of the current approved proposed effort must be approved by the sponsor’s grant manager in advance of the change. Office of Research Compliance and Administration

12. Capturing and Reporting Effort • Effort is captured by creating pay records in the University Payroll System that are representative of all the activities that the individual engages in as a University employee. • Those pay records become the basis for effort reporting. • Pay records are created as a result of information submitted on Personnel Action Forms. Office of Research Compliance and Administration

13. Accounting for University Effort Dr. Mary VeryActive is a very engaged researcher. She is PI on an NIH grant with 50% committed effort. She has an NSF Career grant with 12% committed effort. She is Co-I on an NIH R-21 at 5% committed effort. She has 1% committed effort on an NSF GAAN project. She teaches a class and is a graduate student advisor. Office of Research Compliance and Administration

14. Sample PAF & Effort Report Office of Research Compliance and Administration

15. Dr. VeryActive’s colleague asks her if she will agree to work for free on the grant (cost sharing) because the grant budget is very tight, and Dr. VeryActive’s department head agrees to fund the cost sharing. There is no other change in Dr. VeryActive’s effort. How does this change PAF 1? Changing the Funding Source Office of Research Compliance and Administration

16. Sample PAF & Effort Report 2 Office of Research Compliance and Administration

17. Follow a Few Simple Rules • Salary charges should be fairly constant for a period of time. • Effort that fluctuates, with stops and starts, is an audit flag. • Charge salaries to the right project the first time - waiting till after-the-fact to charge effort makes it seem like you’re waiting to see what the project can afford instead of recording a true estimate of effort. Office of Research Compliance and Administration