LINDA M. GARDINER, Ph.D.
DIRECTOR
RESEARCH ENHANCEMENT AND
REGULATORY SERVICES
October 2, 2012

To ensure research compliance with internal policies and federal governing agency regulations and to provide an environment that supports research advancements for the research community of Texas Southern
University

Effort Reporting Frequently Asked Questions
•What is time and effort reporting and why am I required to certify an effort report?
•What is 100% Effort?
•Can The Total Effort listed on the effort report be less or greater than 100%
•What is the difference between %FTE and %Effort or
%Distribution of Effort?
•Who can certify an effort report?
•As PI when signing the time and effort report am I certifying for funding sources listed where I am not PI?
•How do I certify an effort report?

• Total effort is defined as whatever amount of time a person devotes to fulfilling his/her university responsibilities.
OMB Circular No A21 J10c(2)(a)-(f)

TIME AND EFFORT CERTIFICATION/ REPORTING
Time and Effort Certification Reporting is a method of documenting the work time devoted to an externally sponsored grant or contract activity and is expressed as a percentage of professional activity devoted to an account.
The total amount of effort expended to accomplish the professional activities of
TSU faculty, staff, and students, regardless of the actual number of hours expended on those activities, is equal to 100% for each activity report. This normally includes all effort expended on TSU compensated sponsored research, administration, teaching, non-sponsored scholarly activity, and other activity.
The number of hours implicit in an individual’s 100% effort must be reasonable and supportable to department, school, university and external reviewers and is also subject to audit review. The effort percentages on the Activity/Effort
Certification Form must total 100%.

• A way for an employee to certify that
1.) Effort supported (paid) by a federally sponsored project has been performed as promised.
2.) Effort expended in support of a federally sponsored project but not paid by the project has been performed as promised
OMB Circular No A21 J10c(2)(a)-(f)

• Is required by federal regulation and university policy for all individuals working on federally funded sponsored projects
• Makes salary sources for the period congruent with effort spent for the period
OMB Circular No A21 J10a-b

• Signed effort reports are considered legal documents in which an individual attests to the accuracy of the effort spent on sponsored projects
• Erroneously certifying effort reports can be viewed as fraud
• We are obliged by federal regulations to exercise good stewardship of those funds
1.) Effort is a part of that stewardship
2.) Personnel costs are the majority of research costs
False Claims Act, 31 U.S.C., sections 3729 & 3721

WHY EFFORT REPORTING IS IN THE CROSSHAIRS
A huge portion of federal grant funding goes towards salaries and wages.
According to the NSF Office of Inspector General (OIG), salaries and wages account for about 1/3 of total funding.
“Low hanging fruit for auditors”. Errors in effort reporting and certification are pretty easy for auditor to spot.

CONSEQUENCES OF INCORRECT
TIME AND EFFORT REPORTING
1. Agencies can:
•Impose fines
•Reject expenses
•Force your institution to pay back grant funds
•Suspend research and future federal funding
2. The consequences may be more serious if an audit results in findings of fraud.
3. As an individual PI, you can face False Claims Act allegations, criminal charges and loss of access to current funding.

Do’s and Don’ts of Time and Effort Reporting
•Know the specific guidelines, policies and procedures of your funding agency.
(ie. Salary caps, summer pay guidelines).
•Make certain to adhere to %efforts in the approved budget whether funded by the agency or not. (ie. cost sharing or in kind donations)
•Maintain essential documentation.
•Don’t falsify reports/ certification.

Do’s and Don’ts of Time and Effort Reporting
•Do certify the actual percent of time, not the allocation of salary sources.
•Don’t certify unless you understand what you are certifying.
•Do educate your staff on the project and grant requirements.
•Do correct problems in a timely manner.
•Don’t start charging to another grant because the award is almost out of funds.

LEARN FROM THE MISTAKES OF OTHERS
•The OIG found that a University’s PIs inaccurately certified 100% effort on grants when significant portions of that work were spent on other projects.
•A nationally ranked public research university paid a settlement for overstating effort percentages and falsely reporting effort of researchers who didn’t work on the grants in question.
•OIG audit of another leading public research university found that the institution didn’t have proper documentation to verify that its PIs put forth the percent of effort that they promised in the awards.
•In the case of a leading university focused on biomedical research, disallowed charges that exceeded NIH salary caps resulted in a settlement that cost the university $2.1 million.
•In another case the university’s effort reporting system lacked oversight, a sufficient training program and proper calculation for summer salaries. The university did not have a process that fully implemented NSF’s two-ninths rule on faculty summer salary.

• Northwestern University - $5.5 million (2003)
• Johns Hopkins University – $2.6 million (2004)
• East Carolina University - $2.4 million (2004)
• Harvard University/Beth Israel Deaconess Medical Center
- $3.25 million (2000 & 2004)
• Dartmouth - $37,780 (2005)
• University of Connecticut $2.5 million (2006)
National Conference on College Cost Accounting www.costaccounting.org

• A lack of good understanding may leave project directors at risk for making decisions that increase effort reporting compliance risk.
OMB Circular No A-133 Section_.525(d)(1)

NOT based on 40 hour work week
Based on 100% of faculty activities
- Sponsored project activities
- Non-sponsored project activities
► Administration (including duties as chair, dean, etc)
► Instruction
► Research w/o external funding
OMB Circular No A122 8m(2)(b)
OMB Circular No A21 B1a-b

• If a 100% FTE works 60 hours a week, 30 hours of work represents 50% effort
• If a graduate student, 50% FTE, works 20 hours a week, 20 hours of work represents
100% effort.
• %FTE is based on university established IBS and work week.
• %Effort/ distribution is always based on actual time worked and should always be
100%.

Components of 100% Effort
Examples: Sponsored Project Activities
• Effort on Federal grants or contracts (e.g. NIH, NSF, DOD)
• Effort on non-federal research projects (e.g. a foundation grant or industry sponsored award)
• Effort for a specific funded sponsored project:
► Writing progress reports; holding a meeting with lab staff, presenting research results at a conference; reading journals to keep up to date with the latest advances in the project topic area
► Even if the project work is not completely paid for by sponsor (e.g. salary cost sharing)
OMB Circular No A21 B1b(1)
OMB Circular No A21 B1c

Components of 100% Effort
Examples: Non-Sponsored
Project Activities
• Attending general departmental faculty meetings
• Serving on the university committees
• Serving on an NIH Study Section or NSF
Peer Review Panel
OMB Circular No A21 B1a-d

Activities NOT Included in 100% Effort
- Consulting for pay through a nonUniversity consulting agreement
- Service on a study section or peer review panel.
- If you have any questions about whether an activity is or is not part of the 100%, check with the Office of Research/ DRERS
OMB Circular No A21 J10e

Can The Total Effort Listed on the Effort Report
Be Less or Greater than 100%
• NO
● The effort percentages on the Effort Report must total 100%.
● All TSU compensated effort (base salary) must be accounted for.
● Regardless of the total number of hours worked in a week, 10 or 60, the total effort is still 100%
OMB Circular No A21 J10(a)

• OMB Circular A21 J10b(1)(c)
“In the use of any methods for apportioning salaries, 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.”

Distribution of effort should represent a reasonable estimation of the actual effort expended during the term being certified.
(The nationwide accepted tolerance threshold is +/- 5%)
OMB Circular No A21 J10b(1)©

• Each individual is responsible for the certification of his/her own
Time and Effort Report
• Federal requirements are that anyone certifying effort for another individual must credibly have first hand knowledge of the individual’s actual effort.
• TSU requires Time and Effort Reports to have 2 signatures
- The individual performing the work
- And the project director
► The project director must get his/her own Time and Effort report certified by his/her direct supervisor (e.g. department chair, dean)
OMB Circular No A21 J10c(2)©

• Late effort reports
• Effort certified by someone without firsthand knowledge
• Shifting funds
• Insufficient effort/ over commitment
• Inadequate training

(continued)
• Revisions to Time and Effort Reports
• Summer salaries
• Charging the wrong grant
• Effort changes
OMB Circular No A133 Section_.525(d)(1)

TIME AND EFFORT CERTIFICATION PROCESS
Methodology Components:
1) Generating the certification reports
2) Dissemination
3) Certification
4) Sample Review
5) Reconciliation for changes to the report

TIME AND EFFORT CERTIFICATION PROCESS
• Time and Effort Reporting is conducted quarterly for the periods of :
1) September
– November
2) December – February
3) March –May
4) June – August.
• TSU used “after-the-fact” certification. You should receive your report via campus mail no later than 2 weeks after the quarter that is being certified.
• Currently, samples of salaries listed on the time and effort reports are tested each quarter.
• Responsible parties for the processes are:
1) Office of Information Technology
2) Department of Human Resources
3) Payroll Department
4) Office of Research
5) Principle Investigators (PI’s)

TIME AND EFFORT CERTIFICATION PROCESS
• Currently, the Effort Certification Reports are printed by the
Office of Research from data input by Human Resource and
Payroll Departments. Quarterly, the Office of Research attaches a memorandum from the Provost/ Vice President for
Academic Affairs and Research to each Effort Certification that outlines the importance of accurate time and effort reporting.
The memos and certification reports are disseminated via campus mail.
• The DRERS notifies the compliance officer within 1 week of failures to return Effort Certifications by the specified due dates.
The Office of Institutional Compliance Officer notifies the PI in writing of his failure to comply with the reporting process.
Incidences of PI failures to correct noncompliance are reported to the Provost, Vice President for Academic Affairs and Research.

TIME AND EFFORT CERTIFICATION PROCESS
• PI’s with corrections are given a Payroll Reallocation form. The PI’s return the Payroll Reallocation forms to the OR.
• The OR checks the accuracy of the information on the
Reallocation form against the source document
(Grant Application).
• OR changes the information on the general ledger in accordance to the reallocation form and the source document.

TIME AND EFFORT CERTIFICATION PROCESS
• The OR randomly chooses Effort Certification reports for testing and requests the corresponding Personnel Action forms from the Human Resources Department and time sheets from the Payroll Department. The OR matches the salary information listed on the Effort Certification reports against the employee’s base salary listed on their personnel action form. Additionally, OR reviews payroll time sheets to ensure that any unexcused absences or other no-pay situations are accounted for.

• The compliance environment has become more stringent…and that is not likely going to change in the foreseeable future.
• The individual is responsible for certifying his/her own effort.
• The % is NOT based on a 40 hour work week. It is based on the individual’s own work week.
• Effort reporting tracks the reasonable approximation of
actual activity on projects and should not simply mimic budgeting amounts.

http://www.tsu.edu/research

Linda M. Gardiner
Director
713-313-7208
Gardiner_lm@tsu.edu
Cecilia Bruce
Research Compliance Officer
713-313-7079
Brucece@tsu.edu
Kimbler A. Lofton
Office Administrator
713-313-4245
Lofton_ka@tsu.edu