A21 Effort Report Educational Workshop

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A-21 Effort ReportEducational Workshop

• Tim Burris
• ACE Team (Audit, Compliance, Effort)
• Office of Research Administration
• Indiana University
• 509 E. 3rd Street
• Bloomington, IN 47401-3654
• March 12, 2009

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A-21 Effort Report Educational Workshop

• What we will cover
• What to look for in specific effort report
  scenarios
• What justification do we need to approve changes
  in effort
• Cost share and effort
• Expense subaccounts vs. true cost share
  subaccounts
• NIH Salary Cap
• Types of pay not included in effort
• Supplemental pay
• Fellowships
• Employees with more than one appointment
• Salary Transfers and Effort Periods
• Effort recreates
• Questions

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Why do we report effort?

• The purpose is to comply with Federal
  regulations.
• OMB Circular A-21 mandates that payrolls be
  certified on a periodic basis.
• Indiana University utilizes an after the fact
  effort reporting based on periodic effort period
• Effort Periods are based on classification, for
  example
• 12-Pay Professional
• M01 - July 1 to December 31
• M02 - January 1 to June 30
• 10-Pay Academic
• A01 August 1 to December 31
• A02 January 1 to May 31
• A03 May 1 to August 31
• Hourly / non-exempt / Bi-weekly
• B01 July 1 to September 30
• B02 October 1 to December 31
• B03 January 1 to March 31
• B04 April 1 to June 30

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Scenario 1 The Basic Effort Report

• One Sponsored Project.
• One Departmental Account.

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Scenario 2 Multiple Projects

• Consider an investigator with multiple projects
  or a research assistant who works with multiple
  investigators.
• If the investigators pay is already distributed
  to all the relevant accounts, all will be
  displayed on the effort report.
• If some accounts are not listed, they will need
  to be added to the effort report.
• If projects are underway but the award is not yet
  finalized, request an underwrite account be
  established for the project so that effort is
  charged to the project account up front, rather
  than moving salary charges later.
• These underwrite accounts also pull into the
  effort report so effort can be distributed
  properly.

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Scenario 3 Start and Stop Dates in mid-Period

• Most projects do not start and stop on same dates
  of the Effort Report periods.
• When calculating effort, the start and stop dates
  need to be taken into account.
• Review start/stop dates on awards
• Drill down into the account to view start/stop
  dates
• Drill down into labor ledger to view salary
  posted
• Ensure pay distribution okay for accounts
  beginning/ending within report period.
• Drill down to review actual pay during month per
  account

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Justifying Changes in the Effort Reports

• Understanding why justifications are important.
• What should your justifications include?
• What do you know now that you didnt know when
  the initial pay was reviewed or the original
  effort report was certified?
• How was the incorrect effort distribution
  determined?
• What is being done to prevent similar occurrences
  in the future?
• Please dont use the phrase To correct Effort.

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Cost Share

• Cost sharing or match is defined as the portion
  of the project or program costs that are not
  borne (paid for) by the funding agency.
• Mandatory Committed Cost Share
• Voluntary Committed Cost Share
• Voluntary Cost Share
• Cost share is either provided by the university
  or provided by a third party.

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Mechanics of Cost Share

• Research Administration Activities
• Establish Main Account
• Establish a Cost Share Sub-account
• Dept. source account
• Department charges expenses to the CS sub-account
• Pay distribution e-doc
• Travel
• EPIC purchases
• Etc.
• The System transfers cash to cover the expenses.
• Transfer of Funds document (TF) is automatically
  generated, posting a contra-expense into the
  cost share sub-account to offset the cost share
  expenses incurred each day (object code 9915).
• The Dept source account shows a Transfer of
  Expense to reflect the cash transfer (object
  codes 9920, 9956, etc.).

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Cost Share
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Scenario 4 Cost Share

• Expense sub-accounts are aggregated with the main
  account into one line on the effort report.
• Cost share sub-accounts are entered on a separate
  line to allow users to identify the departmental
  source accounts. This helps users correctly
  allocate effort to the source account that is
  covering the cost share.
• Most accounts only have one cost share
  sub-account, but some have multiple sub-accounts
  to reflect the various departmental source
  accounts which are funding the cost share.

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Scenario 5 NIH Salary Cap

• NIH (and a few other DHHS agencies) have limited
  the amount of salary that they will reimburse.
  This limit has been in effect since 1990.
• The limits for current year funding from NIH are
  available at
• http//grants.nih.gov/grants/policy/salcap_summar
  y.htm
• The limits are for a full 12-month 1.0 FTE
  position at 100 effort. (100 effort should be
  reduced in individual has other activities within
  an appointment.) If an individual works less than
  100 on a project, the limit is prorated.
  Likewise, the limit is prorated for 9-month
  academic employees, or employees with less than
  1.0 FTE.
• IUs policy is that any salary above the cap may
  not be paid by NIH accounts, but instead must be
  cost-shared.

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NIH Salary Cap Example 1

• A 12-month faculty member making 200,000/year.
• The current NIH cap is 191,300.
• If the faculty member spent 100 of his/her
  effort on an NIH grant, only 191,300 could be
  charged on the main account, and 8,700 would be
  cost-shared using the standard cost share
  sub-account process.
• If the faculty members effort was 50 on the NIH
  grant, the limit is prorated to 50 as well.
  Therefore, only 50 of the cap (95,650) could be
  charged directly on the main account, and 4,350
  would be cost shared.

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NIH Salary Cap Example 2

• A 9-month faculty member making 160,000/year.
• The current NIH cap is 191,300, but prorating to
  9 months means the applicable cap for a 9-month
  appointment is 143,475.
• If the faculty member spends 100 of his/her
  effort on an NIH grant, only 143,475 could be
  charged on the main account, and 16,525 would be
  cost-shared using the standard cost share
  sub-account process.
• If the faculty members effort was 50 on the NIH
  grant, the limit is prorated to 50 as well.
  Therefore, only 50 of the 9-month cap
  (71,737.50) could be charged directly on the
  main account, and 8,262.50 would be cost shared.
• If the faculty member earns summer-session
  salary, the cap must continue to be applied. The
  same prorating process is required.

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Scenario 6 Supplemental Pay

• Supplemental Pay is usually on object code 4580
  (some other object codes as well)
• Supplemental Pay object codes are not included in
  the Effort Reports.
• If you believe that Supplemental Pay is showing
  on an Effort Report, contact FMS Payroll or
  Research Administration. It is possible that the
  Supplemental Pay has been incorrectly charged as
  a normal-pay object code.
• It is important to get this corrected it
  impacts the employees fringe benefits.
• Indiana University defines Supplemental Pay as
• Outside appointment
• Across departmental lines
• Non-recurring

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Scenario 7 - Fellowships

• Know the situation understand the relationship
  between the individual and the institution
• Fellowships recipients do not have an
  employee/employer relationship.
• Fellowship payments are not considered
  compensation, and therefore are not included in
  the Effort Reports.
• Fellowship payments are typically on object codes
  5820 or 5821.
• Within accounts, fellowships are only allowed on
  Training or Fellowship grants.

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Scenario 7 Fellowships (cont.)

• Occasionally, a paid position is called a
  fellowship when it truly is not a fellowship.
  Units may define fellowship differently.
• For purposes of Effort Reporting, a fellowship is
  an award which provides support for a researcher.
  It does not constitute an employer/employee
  relationship.
• Do not confuse a fellowship with a Fellow.

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Scenario 8 Split Appointments

• Staff members with two appointments
• One salaried, exempt position
• One hourly or bi-weekly position
• Most often seen with Graduate students
• Two Effort Reports one for exempt, one for
  non-exempt
• Be aware of staff who fall into this category, so
  that you can focus on the duties of each position
  when completing the Effort Report.
• Also be aware of employees who change
  appointments within an effort period
• Staff members with one appointment and one
  fellowship
• Frequently seen with post-docs who receive a
  fellowship and a part-time instructor or
  researcher appointment.
• Consider that the fellowship will not be included
  in the Effort Report, so only include activities
  that relate to the part-time appointment.

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Effort Reports and the Labor Ledger

• The Effort Reports are primarily a mechanism to
  satisfy OMB Circular A-21 requirements for a
  method of Payroll Certification.
• For that reason, Effort Reports are linked to the
  salaries which have been posted to the FIS labor
  ledger.
• Any changes to Effort Reports result in changes
  to the labor distribution. The individuals
  salary distribution among accounts is
  automatically adjusted to reconcile with the
  effort distribution on the approved Effort
  Reports.
• The automatic salary transfers occur after the
  Effort Report has been fully approved and inserts
  the final approvers name into the salary
  transfer document as the Initiator.
• Remember that these automatic salary transfers
  will not move salary to an expense subaccount

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Salary Transfers and Effort Reports

• Salary transfers change the Labor Ledger
  distribution and therefore
• affect effort reporting.
• Once individual effort periods are opened for
  reporting, initiation of
• salary transfers are no longer allowed
• Notification is provided regarding upcoming
  effort report
• generation and cutoff of salary transfer
  initiation. If salary
• transfers are not fully approved by the date
  individual effort
• periods are opened, they will be disapproved to
  maintain the
• accuracy of effort reporting

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Top 10 Reasons for A-21 Recreates

• 10. The account wasnt set up in time for me to
  post salaries.
• 9. Its a cost reimbursable account thats about
  to expire, and it still has money left.
• 8. Its a fixed-price account who cares what
  gets charged to it?
• 7. I finally have the signed copies of the Effort
  Reports from the PI, but it looks like shes made
  changes.
• 6. Im trying to move that overdraft Research
  Administration keeps complaining about.

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Top 10 Reasons for A-21 Recreates (cont.)

• 5. Im trying to get the accounts residual funds
  under 50,000.
• 4. If I put more effort on the prior effort
  report, I wont have to allocate any effort on
  the next one.
• 3. I know we just certified the original effort
  report, but that was before the other grant came
  in.
• 2. I need to allocate effort to the cost share
  subaccount.
• 1. I just approved the Effort Report you
  recreated for me, but I forgot to make the
  changes!

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Typical Questions

• Why, when I change the effort, do the dollars not
  come out correctly?
• Why, when I change the effort, do the fringe
  benefits not balance?
• Why, when I allocated effort to the expense
  sub-account, didnt it book to the expense
  sub-account?
• The Effort Report doesnt show supplemental pay.
  How do I distribute supplemental pay?
• I have a person with a split appointment. How do
  I move salary for their monthly pay when they
  have an outstanding biweekly effort report?
• Why cant I transfer salary between non-grant
  accounts?

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Questions Additional Training

• Tim Burris
• ACE Team (Audit, Compliance, Effort)
• Office of Research Administration
• Indiana University
• 509 E. 3rd Street
• Bloomington, IN 47401-3654
• Telephone [phone]
• Fax [phone]
• E-mail thburris_at_indiana.edu
• http//www.researchadmin.iu.edu/gc-ace.html