Interim Effort Reporting Policy and Procedure
Policy
Effort reporting is a federally-mandated process by which the salary charged to a sponsored project is certified as being reasonable in relation to the effort expended on that project. “Effort” is the proportion of time spent on any activity, expressed as a percentage of an individual’s Total University Effort.
The University of Arizona utilizes an after-the-fact activity report to certify effort on a semi-annual reporting cycle as outlined in section J.10 of OMB Circular A-21, Cost Principles for Educational Institutions - Compensation for Personal Services. Effort reports are required for all employees who have been paid fully or partially from federal/sub-federal sources.
Effective for salaries paid after 12/30/07.
Terminology:
- Institutional Base Salary (IBS) includes salaries and wages paid to an employee from any university source as payment for services provided under their employment agreement. IBS does not include clinical incentive pay paid by UPH funds, cash awards, or supplemental compensation. Supplemental compensation is not included in the institutional base salary, but will also be certified during the effort reporting process. Since supplemental compensation is in addition to an employee’s regular workload, the payments will be listed separately.
- Total University Effort includes all professional activity for which an individual is compensated by the University of Arizona: sponsored activities, teaching, University administrative duties, clinical activities, and other activities. Total University Effort includes all of these activities, regardless of when (daytime, evening, weekends) or where (on campus, at home, while traveling, etc.) the activities take place. Please see the Table of University Actitives and Effort for guidance on how to treat common University activities.
- Significant change – Direct charges for payroll to sponsored agreements will be made on the basis of estimates made before the services are performed. Significant changes in the corresponding work activity must be identified and entered into the payroll system. The University of Arizona defines a significant change as 5 percent or more of an employee’s total University compensated effort. The Federal regulations specifically acknowledge that short term fluctuations (such as one or two months) need not be considered as long as the distribution is reasonable over the longer term, such as a six month cycle.
- Level of precision - Federal regulations clearly acknowledge that precise determinations are not expected, and that reasonable estimates are acceptable. To quote directly from OMB Circular A-21, "… 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." The University of Arizona defines this “degree of tolerance” as 5 percent of an employee’s total University compensated effort.
Procedure
The following reports will be available via the metadata portal: http://meta.data.arizona.edu, report repository section.
- Semi-Annual Effort Report Checklist - a listing by home department of all employees in which an effort report is required, SPS will provide a hard copy to the home department
- Semi-Annual Effort Reports – a single effort report will be created for each employee in which an effort report is required, SPS will provide a hard copy to the home department
- Semi-Annual Payroll Distribution Report – a listing of payroll expenditure for the six month period by employee, this report is provided as a tool to help evaluate payroll and effort discrepancies, a hard copy will not be provided
A University of Arizona Net ID and Microsoft Access are required to view the database within the portal. Lost or missing reports can be printed via the metadata portal. All reports are static reports and will not be updated if retroactive adjustments are processed.
The effort reporting periods for each fiscal year are July-December and January-June. At the end of each six month period, departments will have three pay periods to make final corrections to payroll data for the previous six month period. After three pay periods have passed, Sponsored Projects Services will download payroll data from UIS. From this data, the Semi-Annual Effort Report will be created with effort percentages pre-filled based on payroll totals that have been charged to each account. Semi-Annual Effort Reports will be created for all employees paid from federal/sub-federal sources. The “Minor Fund Group” code will be used to determine funding (A4-sponsored federal/sub-federal, E5-restricted agriculture federal, and G5-fed agriculture).
Cost sharing effort will not be identified by the effort report; additional documentation for cost sharing must be maintained by the responsible Principal Investigator and/or department. SPS will continue to collect annual signatures for cost sharing and periodically review cost sharing on a sample basis.
The effort report requires one signature to be in compliance with federal regulations; the following individuals meet the federal signatory requirements:
- employee
- principal investigator with first hand knowledge of the work performed
- other individual with first hand knowledge of the work performed (i.e. lab manager or supervisor)
- responsible official using suitable means of verification that the work was performed- examples of acceptable documents meeting the “suitable means of verification” include (a) time cards that include effort distribution that have been signed by the employee and/or supervisor, (b) written documents including email messages from the principal investigator confirming the distribution of effort, and (c) department created reports that include effort distribution and are signed by the employee, supervisor, or the principal investigator. The University of Arizona prefers the effort report be signed by a person with first hand knowledge (1-3). Sponsored Projects Services must be consulted in situations where a responsible official using suitable means of verification will sign effort reports (4).
Departments may obtain additional signatures as determined within the department. For employees with split appointments, the home department will be responsible for routing the document for appropriate approval.
SPS will print and mail the effort reports to an effort report coordinator identified for each home department. The effort report coordinator will distribute the reports to individuals who meet the federal signatory requirements for approval. The effort coordinator will collect signed reports and coordinate the preparation of payroll expense transfers if necessary. The effort report coordinator will review effort reports to ensure the signatures are from the appropriate individuals and the signatures are handwritten. After the review, the effort report coordinator will forward the checklist and signed effort reports as a single package to Sponsored Projects Services by the due date. Effort reports that have not been completed and forwarded to SPS by the due date are considered delinquent. The effort report coordinator will forward a listing of delinquent reports to the department head, dean or director and Sponsored Projects Services. Due dates will be published in the Semi-Annual Effort Reporting Schedule.
Corrections to effort should be handled as follows:
- Effort Report has not been signed – Adjustments to effort should be hand written in the corrections to effort column and signed by the employee, principal investigator, or other individual with first hand knowledge of the work performed. Payroll expense transfers should be created to bring payroll in sync with adjusted effort. A correction of error certification will also be required. A copy of the adjusted effort report should be faxed to SPS with the PET numbers listed. SPS will not approve the payroll transfer until a copy of the adjusted effort report is received.
- Effort Report has been signed and submitted to SPS – Effort adjustments and cost transfers will not be allowed after an effort report has been signed unless extenuating circumstances exist. Exceptions will require College level approval.
There are certain circumstances when an employee’s pre-filled effort percentages and actual effort will appear to be out of sync. These unusual discrepancies should be noted on the effort report.
Example: A graduate student has a .25 appointment for teaching and a .25 appointment for research in two different departments at different rates of pay. The pre-filled effort percentages print 45% on the teaching account and 55% on the research account. The student’s actual effort is 50% on each account. In this case, the student should write 50% for each account in the corrections to effort column and sign the report. A notation should be placed on the report stating a payroll expense transfer was not submitted because the payments and effort are correct due to the dual pay rates.
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