|Research Accounting Resources|
|Frequently Asked Questions|
1. Who audits Sponsored projects?
Sponsored awards are subject to audits by the following entities:
Should you be directly contacted by an external auditor, investigator, or an investigator of law enforcement, first refer them to the Director of Research Accounting so that an authorized audit may proceed.
2. What should I do with an “Audit Confirmation Letter” I received?
You may receive three types of audit confirmation letters:
These letters are usually sent by sponsors to Research Accounting directly. Occasionally, sponsors may use department addresses by mistake. If you receive this type of letter, forward them to Research Accounting – ADM 210C.
3. Is a Fixed Price Contract subject to an Audit?
A fixed price contract implies that specific contractual conditions have to be met within a specified time period and that the costs can be no more or less than the agreed upon amount stated in the contract. This type of contract is limited in scope with applicable restrictions.
Generally any award may be audited by the sponsor. Sponsors are interested in auditing a fixed price contract for exposure to unallowable, unnecessary or excessive charges.
All sponsored projects including fixed price contracts are required to meet the following guidelines: Allowability, Allocability, Reasonableness, Consistency and Timeliness (refer to questions 9). These requirements stand fast and should not be diminished upon a waiver of Audit requirements.
4. Why are University re-charges scrutinized by auditors?
Auditors look for expenditure duplication.
Re-charges are expenditures that are recovered by another department within the University system. They include, but are not limited to, goods and services such as a copy center or telephone.
The service provider, regardless of the department is required by OMB Circular A-21 to operate on non-profit basis.
5. Who do I contact concerning on-line budget transfers for grants?
Sponsored Programs reviews and approves grant-related budget transfers. Please contact the Sponsored Programs office at 297-4234.
6. How do I determine which budget pool is appropriate?
Refer to the University account codes to determine the appropriate budget pool category, code and pool.
7. What banner screen is available to review budget availability?
8. My project is ending. What do I need to do?
If the end date of your project is approaching you need to work with Research Accounting to ensure all of the charges related to this project are processed in a timely manner. Typically, projects require all final documents 90 days after the end date. However, it is not uncommon for final documents to be due 30 to 60 days after the end date. If is important to anticipate that your end date is approaching. Research Accounting will send you notification that your account is about to expire.
Please work with your College Budget Coordinator to confirm that final project charges and credits are timely processed. Once these final transactions have been processed, notify Research Accounting who will prepare and submit final financial reports, as required. It is important to note that these reports may be due as early as 30, 60, or 90 days after the project end date.
9. How long must I keep documents relating to a closed-out project?
Under Federal OMB Circular A-110 the financial records, supporting documents, statistical records, and all other records pertinent to an award shall be retained for a period of three years from the date of submission of the final expenditure report or, for awards that are renewed quarterly or annually, from the date of submission of the quarterly or annual financial report, as authorized by the federal awarding agency. There are exceptions. (Refer to OMB Circular A-110 Sec. C53)
The Florida Department of State has similar record retention guidelines (refer to the General Records Schedule (GS1-SL) and the General Records Schedule for Universities and Community Colleges (GS5) on the Florida Department of State website.
The three year rule should be considered commencing after the final financial report or the quarterly or annual report (for incrementally funded grants) has been submitted. For example, records for an award beginning in 2005 and ending in 2008 should be kept until 2011 if the final financial report was submitted in 2008.
Conservatism generally in retention of records is operative depending on the structure of funding that the specific grant provides. The key work is final.
10. What is cost sharing (matching)?
Cost share is the portion of a project that is not funded by the sponsor. Cost share is funded by either (1) University resources or (2) a third (non-federal) party (with specific approval).
Cost share is further classified as either mandatory or voluntary:
Mandatory Cost Share:funding of a sponsored project that is required by the sponsor’s terms and conditions.
Cost Sharing of Effort
11. What does the concept of 100% effort mean?
For a full-time employee, 100% effort includes all of the time that an individual spends doing the work for which he is paid. For Faculty, A&P and Exempt OPS, compensation is not based on the number of hours worked. Compensation is for whatever amount of time it takes to get work completed. Any “extra” time an individual spends doing FAU work is part of 100% effort.
12. If an individual commits 50% effort to a project, what is that 50% of?
If a faculty member commits 50% effort to a project, half of ALL THE EFFORT put into FAU work will be directed toward the project.
13. A postdoc is funded 100% from three different projects. If the number of hours increases on one project without a decrease of effort on two other projects, then “extra” hours are being worked. Should we treat the extra effort as cost sharing?
Since there can be no more than 100% effort, there is no cost sharing. However in this situation, you need to adjust allocation of the postdoc's effort on all three projects.
Whenever anyone is funded 100% on sponsored projects, it is very important to assure that the distribution of time and effort is reasonably accurate. Effort is allocated over the base of ALL time spent doing FAU work. If a postdoc's % effort spent on one project increases, then the % effort on the other two projects needs to be reduced. Consequently, payroll costs on all three projects need to be adjusted according to effort certified.
REMINDER: Typically, NO faculty should be 100% funded on sponsored projects. Effort should be reserved and charged to non-sponsored accounts for any other academic and administrative duties of the faculty.
14. When I prepared the proposal, I committed to cost share a percentage of an individual's effort. Is my cost sharing commitment tied to the estimated dollar amount included in the budget or the percentage of effort?
The cost sharing obligation depends on the commitment stated in the proposal. If the proposal commits to cost share % effort of an individual, then only the % effort committed is required as cost sharing. If the proposal commits cost sharing a specific dollar amount for expenses, then dollar amount committed is the required as cost sharing obligation. If the proposal commits to both % effort and other direct costs, then both % effort and other direct costs are required to meet the cost sharing obligation.
15. When preparing my proposal budget, can I use the term "as needed" and not include any dollars as committed cost sharing when referring to a person who may be asked to consult or advise on the sponsored agreement?
Because it is difficult to determine the amount of time a person may be asked to contribute, you can use the term “as needed” when person is expected to contribute an undetermined, infrequent and insignificant amount of time. In this situation you do not need to include dollars as committed cost sharing or track them in a cost sharing account.
** "As needed" cannot be used when referring to Principal Investigator or key personnel who have a significant role in meeting objectives of the project.
16. When preparing my proposal budget can I use the term “part-time at no costs” and not include any dollars as committed cost sharing when referring to personnel who will be working on the sponsored agreement?
No, the amount of effort and cost of faculty, students, and staff who are expected to contribute on a part-time basis to a sponsored agreement needs to be estimated and stated in the proposal budget as cost sharing. It is highly recommended that PI or key personnel requests salary support for these individuals from sponsor directly to reduce creating cost sharing obligation.
17. If someone does work in support of a sponsored project, but the position was not put in the proposal and is paid by other non-sponsored account, is this effort cost sharing?
No, this voluntary uncommitted effort was not committed to the sponsor in the proposal and does not have to be documented as cost sharing. However, if this person is working in research space on other sponsored projects, then his total effort on all research projects has to be adjusted to reflect the reasonable effort expended on each project.
18. If a sponsor removes the effort of a specific person in the awarded budget, is cost sharing required? For example, 50% effort of a Research Assistant in proposal is not being funded by the sponsor.
Yes, if the Research Assistant still puts in 50% effort on that project as proposed and is funded with University funds, then this effort is cost sharing. However, if the PI revises the scope of work and the effort expectation is eliminated by the sponsor, then there is no effort and no cost sharing.
19. A Principal Investigator (PI) is submitting a proposal for a research project. He does not want to charge any of his salary to the project and lists no commitment of effort in the project budget. Is any effort that he puts in the project “voluntary uncommitted” and therefore not required to be cost sharing?
No, proposals should clearly state the amount of effort and equivalent salary committed by the PI or key personnel who have a significant role in meeting the objectives of the project. Principal Investigators or key personnel should request full salary support for the effort that they expect to expend in meeting the objectives of the project. FAU requires PI or key personnel to commit a minimum of 1% effort during the period in which the effort will be expended (academic year, summer term only, or both). When PI or key personnel effort is committed in the proposal and the related salary is not directly charged to a sponsored project, then the effort committed must be treated and documented as cost sharing.
The minimum 1% effort requirement for PI or key personnel does not apply to
20. If the PI proposes to contribute 10% of his effort to the project with no salary directly charged to this project, would the 1% mandated minimum effort be adequate for cost sharing?
If the PI expects to expend 10% of his effort directly on the project, then the PI should include 10% effort and 10% salary in the proposal. The PI's proposal commitment of 10% effort supersedes the 1% minimum effort mandated by FAU. If the project is awarded as proposed and the PI expends 10% effort, but does not charge any salary directly to the project, then 10% of the PI's salary must be treated as cost sharing.
21. If a Principal Investigator requests summer funding only, how is Academic Year effort related to that project treated?
There are a few possible answers to this question, depending on the circumstances.
22. A Principal Investigator commits effort and requests salary on a sponsored project. Mid-year, the PI re-budgets and reduces his budgeted salary without reducing his effort. Is this considered cost sharing?
Yes, if the PI is providing the effort committed in the proposal, then the PI's effort must be accounted for in the sponsored project or in a cost sharing account. If the PI re-budgets his salary mid-year without reducing his effort, then the PI should instruct the department budget coordinators to request a cost sharing account.
NIH Salary Caps
23. How do we account for effort on NIH grants for faculty over the NIH salary cap?
The amount charged to the grant cannot exceed the proportionate share of the salary cap. The proportion of salary over the cap must be set up in a separate account called “Salary over cap – Index.” For example, A PI commits 10% effort on a project and his annual salary is $250,000. The salary cap for FY 2010 is $199,700. Because the payroll labor distribution and the effort calculation will be based on the $250,000 salary, the 10% effort committed needs to be split into grant account and separate account entitled “Salary over cap- 999999,” where 999999 is the index of the NIH account set up for this project.
Salary over the NIH cap is unallowable as cost sharing expense.
24. If a graduate student is participating on a sponsored agreement with no salary requested and is supported partially by a training grant & GTAIDS/departmental funds, is the portion supported by GTAIDS cost sharing?
If the student is being paid a stipend, then this is not cost sharing. Stipends are paid to students for training rather than effort.
If the student has an appointment as a Research Assistant and is being paid a salary from another non-sponsored project source, then this is cost sharing. Salaries are paid for work being performed and effort should be treated as cost sharing.
25. If a proposal states that existing University equipment or facilities will be used to complete the project, can we account for this as cost sharing?
FAU does not allow cost sharing of existing equipment previously purchased by FAU. As an alternative to offering use of FAU equipment as cost sharing, PI may indicate in the proposal's budget justification or “resources and environment” section: 'The equipment is available for use in the performance of the sponsored agreement at no direct cost to the sponsor.”
University facilities costs are charged to sponsors through the indirect cost rate. The use of University facilities cannot be characterized as cost sharing. The proposal budget justification may state that the facilities are “available for the performance of the sponsored agreement at no direct cost to the project.”
26. If the project will require the purchase of a new piece of special-purpose equipment, can part or all of the equipment cost be offered as cost sharing?
Yes, proposals may include the offer of University funds to pay all or part of the cost of special-purpose equipment as a direct cost. The University portion is recorded in a cost sharing account.
27. What are the guidelines for estimating the value of Third-Party In-Kind contributions? How should I document a Third-Party In-Kind contribution that is used to meet part of a cost sharing commitment?
Third-Party In-Kind Contributions for services of an employee are to be valued at the employee's regular rate of pay (plus fringe benefits that are reasonable, allowable and allocable but exclusive of overhead costs), provided the services are in the same skill for which employee is normally paid. Principal Investigators must obtain from Third-Party In-Kind documentation of services actually provided and, to the extent feasible, supported by the same methods used by FAU for its own employees.
Third-Party In-Kind Contributions may include donated supplies. The value of supplies should be reasonable and cannot exceed the fair market value at the time of donation.
The basis for determining valuation for personal service, material, equipment, buildings and land from Third-Party In-Kind contributions must be documented. The method used for determining cost sharing or matching value for Third-Party In-Kind donations of equipment, buildings, and land may differ according to purpose of the award and may require approval of Federal awarding agency. For guidance of method and value to be used, refer back to Uniform Administrative Requirements for Grants and Agreements with Institutions of Higher Education, Hospitals, and Other Non-Profit Organizations OMB Circular A-110 Section 23 Cost Sharing or Matching. www.whitehouse.gov/omb/circulars/a110/a110.html. Please contact Research Accounting if you need additional information.
28. If the total amount in the proposed budget is reduced by the sponsor when the award is received, then is the difference between proposed amount and funding amount cost sharing?
If you are still expected by the sponsor to meet the commitments in the proposal, then you have to cost share whatever is needed to meet the commitments. However, if there is a corresponding reduction in the scope of the work and the commitments are reduced and project can be completed with all the funds provided by the sponsor, then there is no cost sharing. When the sponsor reduces the proposed budget, it is more prudent to submit to sponsor a revised scope of work and a revised budget to eliminate the expectation of cost sharing.
A contract is a procurement transaction between the sponsor and the University. The reduction in budget and scope must be clearly documented. Otherwise, the sponsor's share may be reduced while the University becomes responsible for a cost sharing commitment.
29. When a conference is funded by a grant and the amount of the grant plus the conference registration fees are not enough to cover the entire cost of the conference, is the amount borne by FAU considered cost sharing? How is it accounted for?
When preparing the budget for a conference grant, the estimated registration fees are included to fund a portion of conference costs and are accounted for as program income. If the actual registration fees received are less than anticipated and the combination of the awarded grant amount and the registration fees are inadequate to cover the COMMITTED conference costs, then the difference must be accounted for as cost sharing. Contact Research Accounting to request setting up a cost sharing account.
General Cost Sharing Information
30. Can funds from either a federal or non-federal source be used to cost share on another award?
Federal awards: No, funds from federal awards cannot be used as a source of cost sharing, except as authorized by statute. In this case, the cost sharing must be AUTHORIZED by BOTH FEDERAL sponsors.
Non-federal awards: Funds from non-federal awards may be used as a source of cost sharing ONLY with written authorization by the non-federal sponsor.
31. Does cost sharing policy apply to non-federal sponsors?
Yes, a commitment to cost share made to a non-federal sponsor must follow the Cost Sharing Policy. A cost sharing account will be set up for any mandatory or voluntary cost sharing committed because the organized research base includes both federal and non-federal research costs.
32. What is Project Enhancement?
Project Enhancement is a voluntary commitment of University resources to supplement externally sponsored projects. Project enhancement is not cost sharing if all of the following criteria apply.
Notice in the example that the resources are not quantified because the projected amounts are incidental and/or insignificant. Principal Investigators can use project enhancements as a way to make a proposal more competitive without committing the University to a cost share obligation. One Federal sponsor, NSF, refers to project enhancement as “Facilities, Equipment, and Other Resources.”
Caution: Once the amount of project enhancement is quantified in the proposal, then it becomes cost sharing and a binding obligation to the University.
“Dr Smart, a technical consultant, will contribute 25% effort to the project for six months.” The above statement, included in a proposal quantifies an amount and therefore, qualifies as cost sharing. If the funding is awarded, then principal investigator and FAU are required to document, certify, and report the effort cost shared for Dr. Smart.
33. What are Allowable Cost Sharing Expenses?
34. What are Unallowable Cost Sharing Expenses?
35. What are indirect costs (i.e. F&A / overhead)?
Indirect costs, also known as overhead and officially know as Facilities and Administrative costs (F&A) are costs that are incurred for common or joint objectives and therefore, cannot be identified readily and specifically with a particular sponsored project, instructional activity or any other institutional activity. They are real costs incurred by the institution that cannot be billed to individual projects. Examples of indirect costs include, but are not limited to, utilities to heat, cool and illuminate laboratories, library resources, central purchasing and payroll services, etc. A federally negotiated indirect cost (F&A) rate has been established to cover these expenditures.
In addition, OMB Circular A-21 requires that certain costs be normally treated as indirect cost which means that they cannot be charged to a federally sponsored project. These costs include administrative and secretarial salaries, postage, office supplies, local telephone costs, memberships and subscriptions, general purpose equipment, and general purpose software.
36. Why can’t I charge Administrative Salaries to my federally sponsored project?
OMB Circular A-21 states that “the salaries of administrative and clerical staff should normally be treated as F&A costs.” Therefore, direct charging of administrative salaries is usually not allowed.
Direct charging of these costs may be appropriate where a major project or activity explicitly budgets for administrative or clerical services and individuals involved can be specifically identified with the project or activity.
A CAS 502 Exception Form www.fau.edu/research/sponsoredprogs/cas502.php must be submitted to Research Accounting for approval in order to determine if a grant is considered a major project.
37. Why can’t I charge other Administrative Costs (office supplies, dues, postage, etc.) to my federally sponsored project?
OMB Circular A-21 states that “items such as office supplies, postage, local telephone costs, and memberships shall normally be treated as F&A costs. Therefore, direct charging of administrative costs is usually not allowed.
Direct charging of these costs may be appropriate where a major project or activity explicitly budgets for administrative costs that can be specifically identified with the project or activity.
A CAS 502 Exception Form www.fau.edu/research/sponsoredprogs/cas502.php must be submitted to Research Accounting for approval in order to determine if administrative costs are permissible.
38. How do I determine if an expense can be charged to a grant?
Direct costs must meet the allowability, allocability and reasonableness guidelines described in OMB Circular A-21 and consistency in OMB A-110, along with any sponsored agreement specific requirements.
Allowability: The direct cost must be allowable under the terms and conditions of the award, including the authorized budget and applicable regulations.
39. Who is responsible for approving and monitoring expenditures?
Principal Investigators and their designees are responsible for:
Research Accounting and Sponsored Programs are responsible for reviewing an approving direct cost requests.
40. How do I purchase something that was not in the sponsored approved budget (i.e. if you need to travel but travel was not in the proposed budget, or if you need to purchase equipment but equipment was not in the proposed budget)?
Most agencies will allow the University to depart from the original budget provided that:
The University requires prior written approval for budget revisions to buy equipment within 90 days of the project end date.
Prior approval requirements for budget revisions from sponsoring agencies are subject to change; the Principal Investigator should contact Sponsored Programs for guidance. When requesting prior approval for budget revisions, the Principal Investigator must submit the budget forms that were used in the application unless the Federal or Non-Federal awarding agency indicates that a letter suffices, following agency procedures.
41. How do I initiate a purchase requisition for a sponsored project?
Complete a purchase requisition (including index and account code). Forward the purchase requisition to Research Account ADM 210C for approval. Research Accounting will review the requisition for:
42. How do I determine which account code is appropriate for purchases and expenditures?
All expenditure requests require account codes to classify goods or services required for research projects.
Refer to the University account code listing for the appropriate expense category available at
43. What reports are available to review expenses on my project?
44. Costs were charged to the wrong sponsored grant index. How do I correct this?
When a cost transfer is identified as a necessary reallocation of costs, the following is required in order to process a transfer:
45. Why are excessive Cost Transfers considered a control weakness?
Excessive cost transfers may be an indication of too many errors, which should be minimal in a system with proper controls. This may cause auditors to question why and how these costs were charged initially.
46. What should I do if a payroll certification is inaccurate?
If there is an error on your payroll certification, complete a Labor Redistribution Form www.fau.edu/controller/payroll/PDF/Labor_Redistribution_Form.pdf to correct the error. Attach a copy of the signed payroll certification and provide a detailed explanation and justification of why the redistribution is necessary.
47. What can I do to ensure financial compliance for federally funded projects?
The key to financial compliance is to understand and follow OMB Circulars A-21 and A-110, and sponsor regulations. When managing your projects on a daily basis, consider the following questions:
Are you submitting:
48. What type of expenditure is not allowable at the end of a project?
The following is a list of unallowable project costs (this list is not inclusive):
49. Can meals or alcohol be charged to Grants & Contracts?
There are no instances when meals or alcoholic beverages would be either appropriate or allowable, unless the awarding agency “specifically” provides approval in the award notice.
50. How can I reduce the frequency of Cost Transfers?
To avoid cost transfers, ensure that the following steps are performed regularly:
51. How do I expedite expense requests through Research Accounting?
All expenditure requests must be submitted to the Grants Specialist in Research Accounting (ADM 210) for approval before the university will officially process the request.
52. If an award notification has not been received but the research project needs to start, is there any way we can start incurring costs for the project? What approvals are needed?
A Principal Investigator may request for a project account to be established in anticipation of the official award notice by submitting a request in writing to the Director, Sponsored Programs. The request must include the following:
53. What is A-21?
A-21 is short for OMB Circular A-21, a circular issued by the Office of Management and Budget. The full name of this Circular is Principles for Determining Costs Applicable to Grants, Contracts, and Other Agreements with Educational Institutions.
OMB A-21 outlines the cost principles to be used in determining the allowable costs of work performed by colleges and universities under sponsored agreements. The principles are used to determine the costs of work performed under sub grants, cost reimbursement subcontracts, and other awards received under sponsored agreements. The principles are also used as a guide in the pricing of fixed price contracts and subcontracts where costs are used in determining the appropriate price.
Please refer to www.whitehouse.gov/omb/circulars/a021/a21_2004.html
54. What is A-110?
A-110 is short for OMB Circular A-110, a circular issued by the Office of Management and Budget. The full name of the Circular is Uniform Administrative Requirements for Grants and Agreements with Institutions of Higher Education, Hospitals and Other Non-Profit Organizations. This circular is directed to Federal agencies. Grant policies issued by Federal agencies mirror requirements prescribed by A-110 and are organized in the following four major subparts:
55. What is A-133?
A-133 is short for OMB Circular A-133, a circular issued by the Office of Management and Budget. OMB Circular A-133 prescribes standards for audits of states, local governments, and non-profit organizations. This circular is issued pursuant to the Single Audit Act of 1984, P.L. 98-502, and the Single Audit Act Amendments of 1996, P.L. 104-156. Auditors use Circular A-133 as guidelines when they conduct the audit for major Federal programs. The audit for major Federal programs is also called single audit or A-133 audit. A-133 audit is intended to provide a cost-effective audit for entities in that one audit is conducted in lieu of multiple audits of individual programs.
Florida Atlantic University is subject to an A-133 audit on an annual basis. The A-133 audit report for the University is combined with the A-133 audit report for the State of Florida. Refer to http://www.fau.edu/research/researchacct/acctaudit.php for the most current audit completed.
Please refer to: http://www.whitehouse.gov/sites/default/files/omb/assets/omb/circulars/a133_compliance/2012/compliance-supplement_june-2012.pdf
56. How will I be notified when an award has been setup and an index number has been assigned?
Research Accounting will send an email notification to the Principal Investigator, business manager and/or budget coordinator. This notification includes the “Research Accounting Datasheet” which provides a summary of all the account and invoice requirements pertaining to the approved contract or agreement.
57. Who do I contact in Research Accounting about my sponsored project?
58. What reports are available to review expenses or encumbrances?
59. Who prepares invoices and financial reports for sponsored projects?
Research Accounting prepares invoices and financial reports for sponsored projects.
Time and Effort FAQs
60. What is Effort?
Effort is defined as the amount of time spent on any institutional activity expressed as a percentage of the total institutional activities of the employee. Total effort for an employee must equal 100% and is not based on a traditional 40-hour work week.
61. What is Effort Reporting/why is Certification necessary?
Effort reporting is a process required by the Office of Management & Budget (OMB) Circular A-21 to document the proportion of time devoted to professional activities. These effort reports must be generated on a regular basis (quarterly basis at FAU) and must be certified by an individual who has firsthand knowledge or suitable means of verification of the employee's activities.
62. Who is subject to Effort Reporting/Certification?
OMB Circular A-21 requires anyone receiving a portion of their salary from a sponsored project, or otherwise providing effort on a sponsored project, to self certify all effort.
63. When do I have to certify effort?
Effort is required to be certified quarterly and University policy requires effort to be reviewed and certified within 45 calendar days of the end of the reporting period. Any adjustments to payroll distribution must also be completed within this timeframe.
First Quarter (January-March) – Effort Certification due - May 15.
Second Quarter (April-June) – Effort Certification due - August 15.
Third Quarter (July-September) – Effort Certification due - November 15.
Fourth Quarter (October-December) – Effort Certification due - February 15.
64. Can a departmental administrator certify my effort for me?
No. To ensure that the effort reporting system reasonably reflects actual effort expended during the reporting period, the person completing the effort certification must have suitable means of verification and first-hand knowledge of the effort expended. FAU's policy requires all employees working on sponsored projects to certify their own effort. The PI is considered to have suitable means of verification and is the only one who can certify the effort for their project staff.
Certification of effort by a departmental secretary or any other staff is not permitted.
65. What should be used as “suitable means of verification”?
All Principal Investigators are responsible for assuring that they have reasonable means to verify their effort and any effort spent by employees paid from their grants. We recommend that the PI maintains a method to document this effort. Documents that can be used as suitable means of verification include, but are not limited to, journals, employee time records, schedules, logs, lab notebooks, etc.
66. How is “total effort” defined?
Total effort is defined as actual time spent on all the activities for which the employee is compensated regardless of the number of hours worked. For faculty total effort includes teaching, research, clinical activities, administrative and public-service activities. Most faculty members generally have responsibilities that would preclude them from devoting 100% of their time to sponsored activities. For non-professional staff positions, 100% effort consists of total hours worked including overtime.
67. How is effort calculated?
While hours worked may be used to calculate the percent effort spent on any project and/or activity, the calculation of percent effort is not based on a 40-hour work week and no actual hours are reported in the effort system. For example, if you worked on average a total of 50 hours per week, and spent 30 hours working on a project and 20 hours on teaching, your effort for the project represents 60% effort. 30 hours (hours worked on the project) / 50 hours (total # of hours worked) = 60% effort on the project.
Note that the total effort is 100%.
68. Why is effort calculated on a percentage basis?
Effort is calculated on a percentage basis because the government recognizes that different institutions have different policies with respect to the scope of their employees' duties. That is to say, 100% effort does not equate to any set number of hours. Using a percentage basis method allows an employee to estimate the amount of effort devoted to a particular sponsored project as a percentage of his/or her total activities.
69. How do I convert % effort to person-months?
To convert percent effort to person-months, multiply the total effort percentage by the number of months and the Full Time Equivalent in the appointment.
For example 30% effort for a 9-month faculty at 1.0 FTE, equates to 2.70 person-months (.30 x 9 x 1.0 = 2.70).
70. What is the difference between Full Time Equivalent (FTE) and effort?
One Full Time Equivalent (1.0 FTE) equals a full-time workload. For effort management and reporting purposes, the effort expended to accomplish the set of University compensated activities of an individual equates to 100% effort, regardless of the actual number of hours expended on those activities. Effort does not equate to a specific number of hours i.e. 40 hours.
71. How does effort relate to hours worked and FTE?
FTE and hours worked are tools used to determine effort, but they are not actual effort. Hours and/or FTE should not be reported as effort. FTE is the proportion of any activity against a full time equivalency. It is normally used to determine the breakdown of salary against several funding sources, and to identify part-time employees. When reporting your effort, you must account for 100% of your total professional effort whether you are 1.0 FTE or not. In other words, a person on a .5 FTE appointment is considered a part-time employee. An employee working on only one project should reflect 100% effort towards that project.
72. How was my effort certified in the past?
FAU used the FAIR System for activity and effort reporting. Because the FAIR System does not meet all requirements of OMB Circular A-21, FAU was required to implement a system that meets these requirements.
73. Why is certification necessary of all grants and contracts when this is only a requirement for the receipt of federal funds?
While this is a federal mandate, it is important to apply requirements consistently between all grants. Requiring effort certification only for federal and federal flow through grants would create inconsistencies and possibly result in audit criticisms. Therefore, certification is required for anyone working on a sponsored project regardless of whether the source of funding is federal or non-federal.
74. Is it necessary to certify effort associated with overload compensation?
No. Overload payments are not certified. When an employee receives compensation directly from another entity (e.g. outside consulting work) or for incidental work which supplemental compensation (i.e. overload compensation) is paid, this effort need not be considered.
75. What is incidental work?
Incidental work is the occasional occurrence of work which is in excess of the normal assignment. Incidental work is considered infrequent, and might include activities such as delivering special lectures.
76. How precise must my effort be?
OMB Circular A-21 recognizes that activities that comprise an individual's total effort (teaching, research, service, administration, etc) are often difficult to separate and that “an exact assessment of factors that contribute to costs is not always feasible, nor is it expected.” Certification must rely on a reasonable estimate of effort during a specified time period, and when estimating, a degree of tolerance is acceptable and appropriate. FAU recognizes this degree of tolerance to be no more than +/- 5%. For example: If your salary is allocated 30% to a project, you would not be required to make an adjustment if your expended effort can reasonably be determined to fall between 28.5 and 31.5%.
77. When is it necessary to make adjustments to effort or payroll distribution?
If payroll does not accurately reflect how the employee spent his/her time on the certified effort report by the degree of tolerance +/- 5%, an adjustment to the charges to the grant or cost-share account necessary. This will be done by completing a labor redistribution adjustment.
78. How do labor redistributions affect effort reports?
Effort reports reflect the allocation of an individual's actual time and effort spent on specific projects via the payroll system. Whether or not the person's salary is reimbursed by the sponsor, all effort must be included. Labor redistributions reflect the actual charges of an individual's salary charged to the grant or cost sharing account. In order to reflect the correct effort percentage the payroll amounts must be correct. A Labor redistribution adjustment might be needed in order to correct the effort percentage.
79. If I work for more than one Principal Investigator on more than one grant, who will certify for me?
FAU requires you to certify your effort. Typically you would self-certify because you are the individual most knowledgeable of how your time and effort was spent during the certification period. If you are a student, the PI will determine if you should self certify or if your effort will be certified by the PI. If the PI decides to certify, all PIs for each grant will have to certify for the student.
80. A faculty member requested, and received, two months of salary from NSF which they plan to use in the summer. How is the effort for the time worked on the grant during the academic year recorded?
Assuming that the proposal stated that effort would be expended during the academic year, the time worked on the project during the academic year is considered voluntary committed cost sharing and is required to be certified. In general, 9-month faculty are permitted to devote summer effort on one or more sponsored projects in the period beyond the academic year (June, July and August) and receive additional salary for that effort, subject to sponsor and University policy. Some sponsors limit the number of paid person months an investigator may work in one year. The National Science Foundation for example limits the salary of the investigator to two months regular salary in any one year from all NSF grants. Review the terms and conditions of all awards prior to devoting summer effort. Note that yearly salary from all NSF sources is capped at 2 months regular salary in any one year. Effort and related salary cost have to be reported during the period expended.
81. My salary is paid from contracts and grants and I do not have academic responsibilities. How do I account for effort towards preparing proposals and other administrative responsibilities?
Typically PI's should not certify 100% effort on externally-funded contracts or grants during any certification period. In addition anyone paid from sponsored projects cannot claim 100% effort to a project if they submit any competitive proposals during that period, and/or attend routine departmental or center meetings unrelated to a specific project.
82. If a 9-month employee is awarded salary for 100% of their effort during the summer term, can they still participate in non-grant related activities?
No. If an employee has been awarded 3-months (i.e., 100%) of their summer salary by an extramural agency, the agency expects that individual to devote 100% of their effort on the funded project(s). This means that normal academic year activities cannot occur during the summer months (e.g., teaching, advising, committee service, proposal writing, etc.).
83. How is effort reported when I am sick or on vacation?
FAU pays vacation and sick leave by distributing this time to all current fund sources, so this should be reported as if you were at work. Any extended leaves of absence (e.g. more than 1 month), warrant further review and discussion with your department administrator, sponsored programs, and/or Department Chair.
84. Can a faculty member be noted as contributing to a grant without committing effort?
NIH grants now have an "Other Significant Contributors" field available. This allows the PI to identify individuals who have committed to contribute to the scientific development or execution of the project but are not committing any specified measurable effort. The following is a quote from the NIH 424 (R&R) instructions: "OSCs are individuals who have committed to contribute to the scientific development or execution of the project, but are not committing any specified measurable effort (in person months) to the project. These individuals are typically presented at effort of zero person months or as needed (individuals with measurable effort cannot be listed as Other Significant Contributors). Consultants should be included if they meet this definition. This would also be an appropriate designation for mentors on Career awards."
85. If I am the PI on a grant that pays 100% of my summer effort, can I direct students working on my research during the academic year?
Yes. Effort associated with directing the research of students working on the PI's research is allowable effort.
86. In my proposal I listed 10% effort with no salary charged to the award. As the project progresses some costs are less than originally anticipated and I now have funds available to re-budget to cover my 10% commitment of effort. Am I allowed to direct charge my effort to the project?
The Office of Sponsored Programs should first be contacted to determine if the award from your agency sponsor contains terms and conditions that allow rebudgeting, and if prior approval is required. If rebudgeting is allowable, then you must establish a labor redistribution adjustment to direct charge the 10% budgeted effort to the project account and reduce your cost share commitment on the cost share account. Because you promised voluntary committed cost share, the cost share must still be met with funds other than the 10% of your salary which is now direct-charged.
87. Am I required to certify effort if I have committed effort without requesting a salary?
Yes. This is considered voluntary committed cost share, and must be documented. An Institutional Contribution Statement must be submitted to sponsored programs with your proposal.
88. What is Institutional Base Salary (IBS)?
Institutional Base Salary is the annual compensation paid by an organization for an employee's appointment, whether that individual's time is spent on research, teaching, patient care, or other activities, and is specifically set for a 9-month, 10-month or 12-month period depending on the individual's appointment. IBS does not include bonuses, one-time payments (lump sum), summer pay for 9 month faculty or incentive pay. Also excluded from IBS is any income that an individual is permitted to earn outside of duties at FAU.
89. Who defines what pay is included, or not included, in Institutional Base Salary?
The Office of Management and Budget (OMB) Circular A-21 sets forth the rules governing the eligibility and calculation of costs in support of sponsored research, development, training and other works produced in agreement with the U.S. Federal Government. A copy of the circular is on the OMB website at http://www.whitehouse.gov/omb/rewrite/circulars/a021/a21_2004.html. Because FAU receives funding from the federal government in support of sponsored research, we are required to comply with the OMB Circular A-21 Cost Principles for Educational Institutions and A-110 Uniform Administrative Requirements for Grants and Agreements with Institutions of Higher Education.
90. Is Institutional Base Salary the same as my salary that is paid by FAU, and reported to the Internal Revenue Service (IRS) each year?
Not necessarily. If you received incentive pay, lump sum payments, summer pay for 9-or 10 month faculty or payments for overloads, your IBS would not be the same as the salary FAU reports to the IRS. Incentive pay and lump sum pay are not listed on the Notice of Appointment (NOA) and are not considered part of IBS. However, these pay types represent compensation that may appear in your annual W2.
91. My IBS is above the NIH salary cap. Consequently, only 20% of my salary can be directly charged to the grant even though I am working 25% of my time on this project. How does this affect my effort?
If you are working 25% time on a project, then 25% effort must be reported. However, your NIH grant can only be changed for a proportionate percent based on the NIH salary cap. This is accomplished by certifying the 20% salary charged directly to the grant and 5% effort to the salary over cap account-999999, where 999999 is the index of the NIH account set up for this project.
92. What types of payments are excluded from effort reporting?
Payroll transactions that are not part of Institutional Base Salary are excluded when calculating effort. For example: terminal annual & sick leave, bonus payments and additional compensation.
93. What are the risks of not complying with Effort Reporting/Certification requirement?
Inaccuracies in effort reports can result in the misallocation of costs to sponsored projects and could result in substantial penalties to FAU. Intentional falsification, forgery, or fraudulent alteration of effort certification reports constitutes fraud. Non compliance can result in disallowances and financial loss to FAU. Disallowances are a result of audit findings and require the return of federally awarded funds.
94. What is the minimum effort required on a sponsored project?
Proposals should clearly state the amount of effort and equivalent salary committed by the PI or key personnel who have a significant role in meeting the objectives of a sponsored project. Principal Investigators and key personnel should request full salary support for the effort that they expect to expend in meeting the objectives of the project. FAU requires a minimum commitment of 1% effort for the PI or key personnel, during the period in which the effort will be expended (academic year, summer term only, or both). When the PI's or key personnel's effort is committed in the proposal and the related salary is not directly charged to the sponsored project, then the effort committed must be treated and documented as cost sharing.
The minimum effort of 1% requirement for PI or key personnel does not apply to:
95. What must be done before I can reduce my effort?
Depending on a sponsor's guidelines, Principal Investigators may be allowed to reduce their effort commitment. If the effort needs to be reduced, the PI should contact the Office of Sponsored Programs to discuss this matter. Prior sponsor approval may be required.
96. What are the typical effort requirements for Career Development (K) Awards?
A career award recipient meets the required commitment of total professional effort as long as:
97. To which component does reduction apply if there is a reduction in effort for an individual with both cost shared and directly charged salary?
Typically, the reduction should be proportionate but individual grant requirements may apply. For example if an individual has a reduction in their effort of 8% then the cost would be proportionately split between both the cost shared and direct charged accounts.
98. What happens when a faculty member maintains the committed level of effort but shifts how this effort is funded?
Typically committed effort should not be shifted between funding sources. However, if the funding source is shifted from grants to Education and General (E&G) then this becomes voluntary committed cost share and therefore has to be documented. For example, a faculty member notes 20% effort on a proposal with requested funding for the full 20%. After the proposal is awarded, the PI discovers a need to reduce his/her compensation from the award (gets paid at 15% from the award) but does not reduce his/her effort committed to the award (still at 20% effort). This creates a 5% cost sharing situation which must be documented.
99. How does a No Cost Time Extension affect my effort commitment?
During a No Cost Time Extension, the effort commitment should be the same as in preceding years. If a PI's effort needs to be reduced (greater than 25% of proposed effort), the sponsoring agency's policies and guidelines regarding a change in effort should be followed. Normally, the PI will be responsible for completing the original effort commitment. If the remaining grant budget is inadequate to pay for the necessary PI effort, the effort becomes voluntary committed cost-share.
100. The Principal Investigator of this project has left the University. Who should certify the effort for this project?
The Principal Investigator should certify effort relating to his/her project prior to leaving the university. If the Principal Investigator of the project is no longer affiliated with the University and a new Principal Investigator has not been assigned then please contact Michelle Gauntlett at firstname.lastname@example.org or 561-297-1147.
101. What happens if a PI refuses or otherwise fails to certify?
Failure to follow the provisions of FAU's effort reporting policies and procedures may subject the individuals and departments responsible for the violation(s) to administrative and/or disciplinary actions in accordance with University disciplinary procedures. Specifically, and without limitation:
102. Am I required to certify my effort if I am on a Leave of Absence or 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.
103. How do I access my effort report?
104. Who is able to access the Effort Reporting System?
Any employee who has effort on sponsored projects will have access to certify their own record. In addition, all Financial and Budget Managers will have access to review the data; however, they will not be able to certify any effort.
105. How do I know when it's time to certify effort?
You will receive an automated email notification to your FAU email address that your effort report is available.
106. When can I certify my effort?
Effort reports will be available to the Pre-Reviewers (Financial Manager) on the 1st of the month following the end of the quarter. For example second quarter April 1- June 30, reports will be available for pre-review on July 1st. The pre-reviewers are required to review the effort reports and acknowledge in the system that they have reviewed the effort reports. Once the reports are reviewed, they will be available to be certified starting the 16th of the month following the end of the quarter. Note that the reports will not be available for certification until the later of the16th or after they have been reviewed.
107. My effort report contains errors; how do I get it corrected before I certify it?
If you notice any errors in your report it must be corrected. Please contact your Financial Manager and have them complete a labor redistribution adjustment for that period.
108. Can a certified Effort Report be changed after Post Review?
No. Once certification of effort has been completed the record will be locked. Only in rare circumstances will subsequent salary adjustments be permitted. If it is necessary to adjust the salary charges for a previously certified effort period, documentation must provide a detailed explanation of the need for the salary adjustment. This documentation must be approved by the PI and the Department Chair and be submitted to the Director of Research for approval. If approved, an appropriate salary reallocation is required and the affected report(s) will have to be recertified.