KEY PRINCIPLES IN EFFORT REPORTING

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KEY PRINCIPLES IN EFFORT REPORTING

• Cindy Kiel, JD, CRA
• Executive Director
• Tammy Freeman
• Effort Reporting Specialist
• UNR Office of Sponsored Projects
• www.unr.edu/ospa
• ospadmin_at_unr.edu
• 775-784-4040

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EFFORT REPORTINGGENERAL

• The Effort Reporting Regulations have been in
  place for over 20 years.
• UNR has not historically provided robust
  education regarding what the rules are. (this is
  changing).
• Effort Reporting and commitment tracking is the
  current hot-topic in the regulations under the
  Single Audit Act and with a variety of sponsors
  Inspector General offices.
• Effort Reporting is one of the 1 highest
  monetary and legal liability issues facing
  federally funded research universities today.

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PRINCIPLE 1ALLOCABILITY

• Only salary paid for time that benefits a project
  can be charged to a project.
• Do not charge salary to a project for reasons of
  convenience or simply because the money is there.
• Cost Transfers of Salary from one project to
  another or from one funding source to another are
  highly suspect by auditors.

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PRINCIPLE 2CONSISTENCY

• PAFs should be processed to reflect promises made
  in proposals (Committed Effort)
• Proposals should reflect actual salary amounts
  using Total Institutional Salary Base.
• Awards should be expended using the same salary
  base as what was included in the proposal
• Reported Effort should be consistent with other
  University paperwork including
• Terms of employment, medicare/medicaid charges,
  annual evaluations, role statements, service and
  administrative activities, class loads, digital
  metrix, etc.

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PRINCIPLE 3100

• An individual can not exceed 100 effort
  including ALL institutional activities
• Instruction
• Clinical Time
• Writing Proposals
• Research (including cost-shared time)
• Administrative Duties
• Service
• Time spent on these activities may not
  normally be charged as a direct cost to a grant
  or contract

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PRINCIPLE 4Work Week Total Hours Worked

• Salaried employees are paid to use whatever time
  is necessary to complete institutional work
  requirements.
• There is no such thing as a 40 hour work week for
  salaried employees.
• Institutional activities can occur evenings,
  weekends and holidays and are part of
  institutional work.

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PRINCIPLE 5Effort Confirmation Drives
Payroll(not the other way around)

• A PAF sets up how a person believes he/she will
  spend their time in the future. It may or may
  not reflect reality as projects unfold.
• Effort Reporting (Confirmation via Certification)
  is an after-the-fact report of how an employee
  actually spent his or her time.
• If Effort does not match how payroll was
  originally set up, PAF revisions and/or cost
  transfers must occur immediately to make sure the
  certified effort is charged in the right amounts
  to the right accounts.

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PRINCIPLE 6Timeliness

• Auditors believe that the more timely an effort
  report is, the more accurate and correct it is.
• Hourly employees report monthly, salaried
  employees report on a semester basis.
• Late reports are the same as if there was no
  report.
• Missing or Late effort reports may result in cost
  disallowances and/or removal of salary costs from
  a project.
• Late cost transfers are highly suspect.

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PRINCIPLE 7REASONABLENESS

• Effort charges must be allocated within or
  5 salary accuracy.
• Additional contract periods must have a
  reasonable base salary calculation that is
  consistently treated regardless of source of
  funds (private, state, federal, gift all treated
  similarly).
• Post Docs vs. Grad Students pay-scales must be
  reasonable, etc.

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PRINCIPLE 8SALARY SUPPLEMENTATION

• You can supplant (replace) existing base salary
  amounts but you may not supplement base salary
  amounts solely due to receipt of or because of an
  increase in grant or contract funding.
• You can pay additional amounts of funding for a
  separate and distinct employment contract.
  However, pay during this additional contract
  period must be reasonable and use a calculation
  based on what the employee makes during his/her
  normal contract period.
• Example B Contract Faculty can contract for
  summer effort in addition to academic effort.
• Incentive pay programs can be utilized only if
  the basis for the additional pay is not solely
  due to receipt of federal grant/contract funds.

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PRINCIPLE 9Significant Changes Require Sponsor
Approval

• Changes to committed effort by more than 25
  require PRIOR approval from a sponsor.
• Key Personnel absences for more than 90 days
  require PRIOR approval from sponsor.
• Changes of effort less than 25 should be
  reported to the sponsor as part of your quarterly
  or annual progress reports.

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PRINCIPLE 10COST SHARED EFFORT

• OMB requires cost shared effort to be tracked in
  the same manner as directly charged effort.
• The University tracks all mandatory cost share
  (matching).
• The University tracks all voluntarily committed
  cost share (matching).
• The University is not required to track voluntary
  uncommitted cost share.
• For DHHS projects subject to the salary cap, the
  amount of salary over the cap should be tracked
  as cost share on a project.
• Note Cost Share is the cost associated with
  that portion of time spent on a project that is
  not charged to the project.

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THE PROBLEM

• Lack of education regarding key effort reporting
  principles.
• Current system of generating PARs has been broken
  for two years (No LOA pickup, dropping first pay
  account from report (classified), no follow-up.
• Lost, missing, late, incorrectly completed
  reports.
• Charging salaries on the basis of convenience
  rather than how projects were benefited.
• Cost Transfers after the fact that dont reflect
  certification of effort.

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THE PROBLEMContinued

• PARs sent to employee home department, but effort
  may have been for project across department
  lines.
• Some employees never saw or lost reports
• Failure to recognize importance of timely and
  accurate reporting.
• No transparency for Chairs and Deans.
• No transparency for PIs re employees working on
  their projects
• Administrators without suitable means of
  verification certifying on behalf of employees

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AUDIT FINDINGS - UNR

• UNR A-133 Audit Findings under the Single Audit
  Act Effort Reporting Findings in 2003, 2004,
  2005 (Missing, Late, Cost Transfers)
• Too many significant findings can result in
  debarment and suspension from receipt of federal
  funds due to insufficient institutional fiscal
  system controls.
• Additional Internal and Inspector General Audit
  findings regarding effort reporting in 2006.
• Reno Gazette Journal Article stating It is
  common practice at UNR to charge salaries to
  projects that were not benefited by the time
  charged.

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AUDIT FINDINGS -ELSEWHERE

• 2003 Northwestern University
• Penalties 5.5M for overstating effort in
  inconsistency in proposing and expending practice
  plan income.
• 2004 Johns Hopkins
• 2.6 M for overstating time and effort on NIH
  grants
• 2004 Harvard
• 3.3 M for billing salaries to govt unrelated to
  projects charged
• 2005 Florida International University
• 11.5 M penalties for improper allocation of
  charges to federal projects
• 2006 U Penn
• Chronicle Article re significant findings
  regarding effort reporting
• 2006 University of Connecticut
• 2.5 Million Settlement with DOJ for inaccuracy in
  contract salary base amounts, claiming additional
  compensation (overload) salaries in violation of
  OMB A-21 and failure to appropriately and
  accurately document cost share
• 2006 Yale
• Currently undergoing investigation
• 2006 Clark Atlanta University
• 5 Million Settlement, DA stated that salary funds
  were used to run the school rather than support
  the funded projects.

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THE SOLUTION

• Hired Full-Time Effort Reporting Specialist
  Tammy Freeman.
• Purchased MAXIMUS electronic Web-based Effort
  Reporting System (GO LIVE January 2007).
• Designing Effort Reporting Policy to identify
  what is considered Institutional Base Effort
  and what salary elements are included in Total
  Institutional Salary at UNR.
• Audit finding responses included new Cost
  Transfer Policy (90 days for JVs 30 days for
  PR-45s after certification of effort).
• Providing Training Materials and Opportunities

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THE SOLUTIONBENEFITS

• Education on new system will also provide
  education regarding key principles and importance
  of Effort Reporting
• Web Based System allows for effort reporting
  anytime, anywhere using UNR NET ID Password for
  logon.
• Easy Certification of effort (two mouse clicks
  and you are done)
• Easy Change of Effort (modified can be typed
  in easily- account for cost-shared time can be
  added easily).
• Easy Cost Transfers (PR-45s completed within the
  electronic system to make sure payroll matches
  certified effort)

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THE SOLUTIONBENEFITS

• Transparency of paperwork and process
• E-mail Alerts to individuals and PIs for late or
  missing Effort Reports
• Chairs and Deans Offices have ready access to
  system to ascertain levels of compliance for
  their area.
• No more lost paper
• Electronic historical record kept of who did what
  in the system
• More accountability and reliability

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THE SOLUTIONCHALLENGES

• Short Timeline
• Cant do pilot for first round due to
  inadequacies of existing system
• HR database still requires manual data entry of
  cost transfers
• Financial system cant separately track PR-45s
  done in MAXIMUS vs. as paper
• LOA contracts, cost share etc. must be completed
  prior to payroll capture dates timely
  processing of salary set-up
• Employees (especially high risk faculty funded
  over 80 FTE on grants/contracts) must ensure
  time billed to project is for time spent on
  project not for admin duties, writing
  proposals, other services and/or for running the
  school.
• Lack of sufficient administrative personnel for
  higher level of research management.

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THE SOLUTIONCHALLENGES Continued

• May result in higher levels of captured cost
  shared effort which can hurt the Universitys
  bottom line.
• No more after-the-fact cost transfers
• Departmental Administration must be available to
  assist faculty and PIs in the certification
  process (individuals not always readily available
  or dont see themselves as instrumental to
  research administration within their department).
  
• Higher emphasis on usage of memo accounts instead
  of cost transfers to manage time and effort when
  awards are late in arriving.
• Not everyone has e-mail or net IDs

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EFFORT REPORTING SYSTEM DETAILS

• Reporting period for hourly employees will
  continue to occur monthly.
• Reporting period for salaried employees will
  occur on a semester basis.
• Fall Semester January reporting
• Spring Semester June reporting
• Summer Semester September reporting
• Reporting period for academic term LOAs will
  occur annually in April

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EFFORT REPORTING SYSTEMDETAILS

• Department Coordinators, Pre-Reviewers and
  Post-Reviewers (administrators responsible for
  fiscal oversight for college/departments) must be
  identified early for training and implementation
  support.
• The system draws initial data from the payroll
  system as set up on individuals PAFs.
• The system will include PR-45 (cost transfer)
  information processed during the reporting
  period.
• Cost share capture details are still being
  determined at this time.

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EFFORT REPORTING SYSTEMIMPORTANT PEOPLE

• Central Administrator Initiates Effort Reporting
  Cycle by capturing payroll data and sending out
  notification to Department Coordinators that
  Reporting Cycle has begun.
• Department Coordinators either begin pre-review
  or notify delegated pre-reviewers to look at
  pre-review screens
• Does what is reported in system match what was
  planned, or has there been a significant change
  in committed efforts?
• If so, communicate with PI regarding reason for
  change discuss whether sponsor approvals must
  take place.
• Have over the cap salaries been appropriately
  accounted for?
• Has the project met required cost share
  commitments?
• Does something look wrong with data, salary
  amount, names, etc.?

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EFFORT REPORTING SYSTEMIMPORTANT PEOPLE contd

• Certifiers
• Preference Individuals who spent their time on
  sponsored projects paid or cost shared time
  certify for themselves.
• Certification on behalf of someone else
• Must have suitable means of verification
  (e-mails, documented conversations, first hand
  oversight, lab notebooks, etc. can qualify).
• Only if the individual is not otherwise able or
  available to certify on their own behalf.
• Certifications by the individuals can not be
  over-riden by a supervisor or administrator
  unless initial report is allegedly fraudulent.

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Effort Reporting SystemImportant People contd

• Principal Investigator
• Designs proposals and commits effort
• Works with DCs to plan budgeted activities
• Communicates cost share requirements on projects
  to DCs
• Oversight to ensure all individuals who worked on
  project provide timely effort reports.
• Chair
• Ensures all effort reports are submitted in a
  timely manner for all PIs and individuals in
  his/her Department.
• Dean
• Ensures all effort reports are submitted in a
  timely manner for all PIs and individuals in
  his/her College.

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Effort Reporting SystemImportant People contd

• Post Reviewers (Department Coordinator)
• If an individual reports effort that is different
  from what was pre-reviewed, the post reviewer
  opens post review screen to create cost
  transfers, if necessary, to ensure proper
  charging of effort to projects.
• Person must have authority to approve cost
  transfers.
• The Post Reviewer can not change an individuals
  certified effort, but can allocate effort to cost
  share accounts or other activities as reported by
  the certifier.
• This review must occur and any necessary cost
  transfers must occur within 30 days after
  certification was completed .

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CONTINUED NON-COMPLIANCEIS NOT AN OPTION

• Rule 1 No one goes to jail
• Rule 2 UNR does not get fined
• Rule 3 UNR does not get debarred or suspended
  from receipt of federal funds (80 Million
  annually)
• Rule 4 UNR employees maintain the highest
  level of ethical and professional standards in
  performing and fiscally managing sponsored
  projects.
• Consequences of Non-Compliance
• Suspension from OSP services
• Salaries moved off of OSP accounts to PI, Chair,
  and Dean fa accounts if no timely certification
  of effort.