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Office of Sponsored Projects

Time and Effort Certification

Revised May 1, 2014

Purpose

The purpose of this training course is to familiarize faculty and administrative staff with the University's effort reporting process, in order to comply with Federal regulations and LSUHSC-NO policies and procedures that govern effort on sponsored projects/agreements.

Audience

All individuals involved with the administration and conduct of sponsored project activities, including campus, school and department sponsored project administrators, Principal Investigators (PIs), and other research personnel are required to take this training on an annual basis.

Background

Time and Effort Certification (Effort Reporting) encompasses many processes, including committing effort, charging and cost sharing salary expenses for effort, and certifying effort to support commitments and salary charges.

As a recipient of federal funds, LSUHSC-NO must assure Federal funding agencies that the assignment of time and associated salary are appropriately expended to sponsored agreement(s). These expenditures must be fair, timely, and consistent with the effort expended on the sponsored project.

LSUHSC-NO uses After-the-Fact Effort Reporting as the means to fulfill the reporting requirement stated in 2 CFR 220 (formerly OMB Circular A-21, J10).

What is a Sponsored Project?

Any activity performed by LSUHSC-NO personnel whose associated costs are allocated to an external entity including but not limited to:

Effort Pie Chart

(Click or tap image for expanded view)

Effort Is . . .

How is Effort Determined?

An employee’s total Effort percent can never be greater than 100% or less than 100%, regardless of the number of hours or FTE’s worked. Some Examples:

It includes all Effort expended to meet commitments as a member of LSUHSC-NO’s workforce (the number of hours worked a week will vary from person to person!)

Why is Time and Effort Certification Required?

Federal regulations require time and effort certification when any part of an individual’s salary is:

The certification must demonstrate that the employee worked on that specific federal program and/or cost objective in proportion to the amount compensated.

The Difference Between Effort Certification and Payroll Distribution

Payroll distributions and effort certifications are not the same thing.

Effort is not just a rubber stamp of the salary or payroll distribution. Each time an effort certification form is filled out, it must be carefully examined and any substantive errors reported to the department for correction in a timely fashion (within 45 calendar days).

The time and effort certification form is merely one opportunity to make corrections. Anytime there is a substantive variance in the effort allocated to an activity, it should be reported to the department for adjustment.

What Does Effort Certification Verify?

Who Needs to Certify Effort?

Any person whose personnel costs (or portion of their personnel costs) are allocated to a sponsored project must certify that the costs are reasonable in relation to the effort expended on the project.

Effort must be certified by a person who has a “first-hand knowledge” that the effort was expended as documented.

Effort Reporting Phases

Effort Reporting Phases

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Effort Certification Life Cycle

an ongoing process ...

Effort Certification Life Cycle

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Effort Certification Requirements

2 CFR 220 requires that any effort certification system:

Reliability and Reasonableness (2 CFR 220)

“…it is recognized that research, service and administration are 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 degree of tolerance is appropriate.”

What Counts in Your 100% Effort?

The Time and Effort Certification form provides for six categories:

Activities NOT Included in Your 100% Effort?

Voluntary Uncommitted cost share is faculty-donated time above that agreed to a part of an award. Some examples:

Professor Who

Meet Professor Who

Dr. Who is a faculty member at the University and has the following Active Effort commitments:

  1. 20% on Project A, 20% salary charged to the project
  2. 25% on Project B, 25% salary charged to the project
  3. 5% on Project C, no salary charged
  4. 50% Instruction
  5. 5% Administration
  6. 9% outside consulting

Is Dr. Who overcommitted?

Hover your mouse over or tap your finger on the box below to see the right answer.

Yes
 
No

(Tap on any picture to make the answer disappear.)

Add numbers 1, 2, 3, 4 & 5 from above:

  1. 20% Project A
  2. 25% Project B
  3. 5% Project C
  4. 50% Instruction
  5. 5% Administration

Total Effort = 105%

Rationale: Effort can not Exceed 100%. The reason number 6,  “9% outside consulting” is not included in the total effort listed above is because the outside consulting costs should not be included in an individual's 100% effort.

The Time & Effort Certification Process

  1. The Sponsored projects department emails the time and effort certification form(s) to the appropriate personnel (business managers) in each department.
  2. The appropriate personnel in each area must review and certify to the accuracy of the time and effort and make the necessary adjustments/payroll redistribution(s) within 45 calendar days.

Verifying Time & Effort

Review the Form(s) and ask yourself the following questions:

At LSUHSC-NO, a variation in allocation versus actual effort of less than 5% (<5%) is acceptable.

For example, a time & effort report indicates an employee worked 75% on instructional activities and 25% on a grant. The actual time the employee worked on instructional activities was 78% and 22% was spent on the grant. The difference is 3% so a RETRO (adjustment) IS NOT needed.

Variations of 5% and more (=>5%) need to be adjusted on the Time & Effort certification form.

For example, a time and effort report indicates an employee worked 75% on instructional activities and 25% on a grant. The actual time the employee worked on instructional activities was 50% and 50% on a grant. An effort adjustment (a RETRO) IS needed and related payroll or cost share corrections must be initiated.

The Effort Certification Process

What is Cost Sharing?

Cost sharing is the University's financial contribution toward a sponsored project.

For the purposes of effort reporting, cost sharing is in the form of salary contributed to a sponsored project.

Cost sharing may also be called:

There are three basic types of Cost Sharing:

  1. Mandatory - Required by the sponsor's terms and conditions and must be documented and tracked.
  2. Voluntary Committed - Proposed by the University and must be documented and tracked.
  3. Voluntary Uncommitted - Not proposed and does not have to be documented or tracked.

Cost Transfers

Cost transfers are any adjustments required as a result of the review and verification of the time and effort certification form will require a cost transfer.

Cost transfers must be performed in accordance with the University’s Cost Transfer Policy which applies to all federal, state and private awards.

Cost Transfer Requirements

The cost must be proper and allowable to the grant.

A Cost Transfer form must be filled out.

A revised time and effort certification form if it relates to labor in previous certified time period(s).

In order to review the cost transfer request, the following items must be attached to the Cost Transfer Form when routing:

Unallowable Cost Transfers

Transfer requests to Sponsored Projects’ awards within 60 days of an award’s end date. (The cost transfer request has to be in Sponsored Projects’ office at least 61 days before the award’s end date.)

A cost transfer from one sponsored project to another will not be processed in the following instances:

Failing to Comply with University Policies Can Be Very Costly

While sponsored projects, especially federally sponsored projects may not account for a significant portion of the University’s revenue. Failure to appropriately manage these projects and their associated costs can create significant legal and financial exposure for the University out of proportion to the dollar amounts involved.

In 2007, Yale University agreed to pay $7.6 million related to inappropriate charges of summer salaries.

In 2004 Johns Hopkins University agreed to pay $2.6 million for overstating faculty time and effort on federal grants.

Also in 2004, Harvard University agreed to pay $2.4 million for billing the government for salaries and expenses unrelated to federal grants.

In 2006, the University of Pennsylvania agreed to pay $3.3 million related to the timeliness of cost transfers.

In 2004,Florida International University (FIU) has agreed to pay $11.5 million to settle allegations that it mischarged costs and overbilled under several contracts and grants with the Department of Energy.

Key Points to Remember

LSUHSC-NO Resources

Time and Effort

Other Related Polices and Procedures

Important Forms


Any Questions?

We Are Here to Help!

Sponsored Projects Office

Box 612

433 Bolivar St.

6th Floor

New Orleans, LA 70112

Phone: (504) 568-6376

Email:

Ella L. Lee - ELee1@lsuhsc.edu

Tai Nguyen - tnguy5@lsuhsc.edu

Dewey Schneider - DSchne1@lsuhsc.edu

Thuy Ta - pta@lsuhsc.edu

Lynne Tardiff - LJones9@lsuhsc.edu