This policy establishes the effort reporting and certification requirements for federally sponsored research.
B. Revision history
Originally issued: January 2001
C. Persons affected
All Northwestern Health Sciences University faculty and staff who have a portion of their effort allocated to federally-sponsored research activities.
D. Related research policy documents
Federal regulations (see Office of Management and Budget [OMB] Circular A-21, Section J.8.a) require Northwestern Health Sciences University to document the time and effort that faculty and professional staff devote to federal grants and contracts. In particular, effort reports must be generated for Northwestern employees when a portion of their salary/wage is allocated to a federal grant or contract. The report provides a record of the percent of effort committed to the sponsored project, regardless if the effort is paid by external funds or is an unpaid contribution of time, i.e., a "cost sharing" match.
Effort reporting system
The effort reporting system is an "After-the-Fact" reporting system, in which the distribution of salaries and wages by Northwestern will be supported by effort reports as described below:
- Effort reports will be generated monthly.
- Effort reports will reasonably reflect the percentage distribution of efforts expended by Northwestern faculty and professional staff involved in federally-funded grants, contracts, and cooperative agreements.
- An effort report will be generated for each faculty member and professional staff member working on a federally-funded project, provided that the approved grant, contract, or cooperative agreement commits University personnel time to the project, regardless whether such time is paid by external funds or is an unpaid contribution, i.e., cost-sharing.
- The effort report will be certified by the individual having direct knowledge of an employee's total effort. This person can be the employee, the principal investigator, or the employee's supervisor. Where feasible, it is preferred that the employees certify their own effort. In instances where employees are not familiar with the names of the projects on which they have expended effort, it is necessary for their supervisor or the Principal Investigator to sign the effort report. Signing confirms that the effort allocation as reported, reasonably represents the actual effort expended by the employee.
- Effort reports will be generated at the beginning of each month to document the percentage distribution of effort expended during the previous month.
- Once an effort report has been signed and submitted, no retroactive changes will be allowed.
- Completed effort reports will be filed in the Research Services office.
It is absolutely essential that:
- Northwestern is in compliance with this regulation, and
- The reported time and effort accurately reflect the actual time and effort devoted to the project. If the reported time and effort does not match what was approved by the sponsor, please consult with Research Services. If a grant or contract is audited and effort reports are not on file or do not agree with the approved budget, the sponsor may demand that Northwestern return all or part of the funds.
When actual effort on sponsored accounts exceeds the effort approved in the grant award, non-sponsored accounts must be used to cost share the difference. Mandatory cost sharing is required by certain sponsors. Voluntary cost sharing represents additional effort expended on the project that is not required by the sponsor. For a detailed definition, see Cost Sharing policy.
Effort is work or the proportion of time spent on any activity and expressed as a percentage of total time. Total effort for an employee must equal 100%. The appointment serves as the basis for an individual's total effort. In other words, for a 50% appointment, 100% effort is the 50% appointment. Likewise, for a 75% appointment, 100% effort is the 75% appointment.
Effort devoted to sponsored projects must be the determining factor for charging the appropriate salaries and wages to sponsored projects. It is inappropriate to charge sponsored projects for effort not certified within the University's designated timeframe.
100% effort is total time spent conducting University business irrespective of the normal work schedules except for incidental work, i.e., overload. This includes work performed outside of the "9-to-5" work schedule, work performed while on vacation, off-hours, and on- or off-campus. For example, if a PI works 30 hours a week on "Future Cures" and 30 hours a week on something else, Future Cures is getting 50% effort.
Positions Paid Hourly and Subject to Paid Overtime
100% effort consists of total hours worked including overtime. The effort is thereby measured (that is, work schedules are established) and documented by some form of continuous recordkeeping. For example, if a technician works 40 hours a week on "Future Cures" and 10 hours a week on something else, "Future Cures" is getting 80% effort.
Graduate Assistants and Students
100% effort for graduate students in a bona fide employee-employer relationship consists of the sum total hours worked of their appointment(s). For example a 100% effort for a graduate assistant who has two 25% appointments would consist of the combined two appointments, or a maximum weekly base of 20 hours. Graduate students supported by training grants as "fellows" are not considered employees and therefore do not require effort to be certified.
Leave of Absence/Sabbatical
Any employee who is paid from or contributes effort to a sponsored project during a Leave of Absence or a Sabbatical must still certify their effort on that project. Arrangements need to be made for persons away from campus to receive and return required statements.
Work study is a financial aid program in which the state or federal government pays a percentage of a student's wages. Effort expended on a sponsored project, and paid by Work Study, must be cost shared. The Work Study account and the corresponding adjustments must be documented on the Effort Statement.
Payments to non-salaried employees for hours exceeding the normal work week (40 hours) constitute overtime. Effort should be calculated on the basis of hours worked.
Intra-University Consulting Fees
A University employee may provide consulting services to a sponsored project and be compensated with consulting fees when allowed by (and subject to the conditions of) the sponsoring agency. These fees must be paid through the payroll system. Such costs are NOT to be certified through the Effort Reporting process. The Effort Statement must be adjusted to remove the consulting cost from payroll and effort distribution columns and noted on the statement that this was a consulting payment. It is the responsibility of the consultant to provide documentation to verify that the services were performed. The invoice must be retained in grant files for audit purposes.
5% Point Significance Level
The Federal Government has established a criterion for what constitutes a "significant change" in budgeted vs. actual effort (i.e., a change that would necessitate an adjustment in direct labor charges or cost sharing). The criterion established is + or - 5 percentage points of effort. For example, an adjustment should occur when an employee's Effort Statement showed twenty-five percent of effort being expended on a grant and the employee's actual effort was twenty percent. No adjustments to the payroll, cost sharing, or effort columns are required for an account if actual effort differs from effort preprinted on the Effort Statement by less than 5% points.
All Principal Investigators must still record their total effort to any given sponsored project even if the effort is LESS than 5%, i.e., in order to be a Principal Investigator, a minimum amount of effort must be devoted to reflect the PI's scientific and administrative direction of the project. The 5% point significance level only applies to PIs when their total effort on any given sponsored account is more than 5%.
25% Effort Reduction for Principal Investigators
In accordance with OMB Circular A-110, prior approval from the federal sponsoring agency is required if principal investigators or project directors will be absent for more than three consecutive months, or there is a 25 percent reduction in his or her effort devoted to a federal sponsored project in comparison to the approved budget plan.
When this situation exists, the Principal Investigator must write a letter to the federal grant contracting officer addressing the following:
- How does the reduction affect the work scope?
- If paid effort, how will the funds be re-budgeted?
The letter must be signed by the Principal Investigator and endorsed by the Vice President and Provost.