Policy number: 10.15

Policy section: Research

Revised Date: December 16, 2019

1. Definitions

Definitions of capitalized terms are set forth in Appendix A.

2. Policy Statement

In requesting Funding, the University must ensure that the proposed Effort commitments are reasonable and conform to the University’s expectations of the Principal Investigator/Project Director and key personnel. If the proposed Sponsored Project is awarded, the University must assure the Sponsor that the Effort proposed will be effectively managed within the parameters of the Sponsor’s requirements and University Policies and that the Effort expended on the Sponsored Project is at least commensurate with the salaries and wages charged to that Sponsored Project. In addition, Sponsors must be assured that Effort committed to a Sponsored Project (in addition to Funding provided by the Sponsor) is performed and that the Principal Investigator/Project Director and other personnel have properly accounted for such additional Effort.

3. Purpose

This policy establishes responsibilities and procedures for documenting the distribution of salaries and wages charged to Sponsored Projects in compliance with Federal regulations and policies.

4. Calculation of Effort and Summer Salary

1. For reporting purposes, Effort of faculty, exempt staff, and post-doctoral and graduate student employees is calculated in percentages, not hours, with Total University Effort equaling 100%. For example, if a faculty member works an average of 50 hours per week during an Effort Reporting period and works an average of 10 hours per week on a Sponsored Project, Total University Effort towards that Sponsored Project is 20%.
2. For faculty, Total University Effort includes, but is not limited to, teaching, office hours, student advising, research activities, committee service, departmental meetings, professional development, and community service at the University or to the University.
3. The following activities are included in Total University Effort:
   1. Instruction or other University supported academic Effort – including all teaching and training activities whether offered for credit or non-credit, student mentoring and advising (unless specifically part of a Sponsored Project);
   2. Sponsored Project activities – includes activities devoted to Sponsored Projects for purposes of research, research training, and public service. Also included are activities contributing and integrally related to work under the Award such as reporting, participating in related seminars, meetings, and conferences, and consultations with colleagues, graduate students or other staff supporting the Sponsored Project;
   3. Departmental Research/University Research – includes unfunded research Effort and peer review of manuscripts;
   4. Administrative or University service – administrative assignments such as department chair, institutional committees, advisory boards, other departmental or university activities, and Proposal and bid preparation;
   5. Public service on behalf of the University including institutional community service; and
   6. Unpaid service to professional organizations or societies related to one’s field of work.
4. The following activities are not included as Total University Effort:
   1. Compensation for external consulting, serving on scientific advisory or similar external boards, and other types of professional work;
   2. Volunteering as an individual for community or public service;
   3. One-time, extra payments for special activities;
   4. Activities over and above the individual’s job requirements, such as overtime or faculty overload; and/or
   5. Other activities outside of those included in Total University Effort within this table.
5. Faculty Summer Salary is determined in the following manner: The basis for calculation of an individual faculty member’s Summer Salary that can be charged to a Sponsored Project is the regular compensation received during the period of appointment. As an example, for faculty on a 9-month (academic year) appointment, each month of summer compensation will be limited to and calculated at the rate of 1/9th of the salary for the academic year preceding the summer Effort. Effort performed during the academic year does not count toward the summer Effort and Summer Salary may not be paid for Effort performed during the academic year. A faculty member with significant (exceeding 5% of Total University Effort) academic, administrative or other non-Sponsored Project responsibilities during the summer, will be precluded from devoting 100% Effort to Sponsored Projects and thus from requesting full Summer Salary from those Sponsored Projects.

5. Effort Reports

1. It is the policy of the University that Effort Reports will be based on after-the-fact activity records. Effort Reporting will be submitted monthly and is required of all individuals who are either paid from Funding or who commit time as Cost Sharing to Sponsored Projects. Individuals working as volunteers without compensation are exempt from Effort Reporting requirements, provided that the Department of Human Relations must approve use of volunteers on a Sponsored Project.
2. Effort Reporting (originally derived from payroll distribution records) requires that an adjustment be processed if there is a significant change in Effort. Personnel Activity Reports (“PARS”) exclude Incidental and Related Work for which additional compensation is allowed under University policy and is separately identified and documented in the financial system. Certain classifications of employees are paid on an hourly basis and utilize the University’s time-keeping system. Effort Reports for these employees will reflect only the hours charged to a Sponsored Project and are not based on percentages of Effort. Because hours reported in the timekeeping system do not reflect hours worked on a Sponsored Project, the Effort Report is the University’s mechanism for obtaining confirmation of hourly Effort. Effort Reports are issued monthly for payrolls during the prior month. The Effort Report documents the proportion of time devoted to Sponsored Projects, and to non-Sponsored Project activities for which the employee is compensated by the University, each expressed as a percentage of Total University Effort. The denominator of the Effort percentage must always be Total University Effort, irrespective of the total number of hours worked during the Effort Reporting period.
3. Salaries and benefits charged to Sponsored Projects or contributed as Cost Sharing, must be reasonable, allocable, allowable, consistently treated, commensurate with Effort expended, and confirmed in a timely manner based on appropriate documentation. Faculty salary charged to Sponsored Projects must be commensurate with the direct Effort provided to the Sponsored Project for each reporting period and must not include any significant portion associated with administrative work or activities related solely to instruction or Departmental Research. Summer Salary charged to each Award must be in direct relation to the Effort actually expended on the Sponsored Project funded by that Award during the summer period. Faculty members receiving three months of Summer Salary charged to a Sponsored Project, must only perform activities for that Sponsored Project during that period.
4. While salary charges to Sponsored Projects are made initially based upon the planned or estimated workload of faculty and others, the actual Effort of each individual working on Sponsored Projects must be monitored by each Principal Investigator/Project Director or his/her designee, with charges modified as necessary based on variances between the estimated and actual Effort if a Significant Difference is indicated.
5. All Principal Investigators/Project Directors are required to certify their own Effort as well as the Effort of project staff and students, unless they delegate this task to other individuals who have sufficient technical knowledge and suitable means of verifying that the work was performed. This required Effort certification is accomplished and documented by completion of the Personnel Activity Report. Certain classifications of employees may be paid on an hourly basis, in which case a Personnel Activity Report listing the hours charged only to the Sponsored Project must be completed and certified by the Principal Investigator/Project Director or designee. Personnel Activity Reports must be returned to Grant and Contract Accounting within 30 days from the end of the month in which Effort is reported to avoid reallocation of associated charges to school, college, department, division, center, or institute resources. Except for rare circumstances with the approval of the Vice President for Business and Finance or designee, once certification of salary has been completed, reallocation is not allowable. If it is necessary to adjust salary charges for a previously certified Effort period, documentation must provide a detailed explanation of the need for salary adjustment and subsequent recertification.

6. Roles and Responsibilities: Principal Investigator/Project Director

The Principal Investigator/Project Director is responsible for:

1. taking responsibility for understanding the principles of accurate Effort Reporting;
2. providing reasonable estimates of Effort in order to carry out the aims of the proposals and fulfill other University obligations;
3. meeting commitments to Sponsor regarding Voluntary Committed Cost Sharing and Mandatory Cost Sharing;
4. initiating or causing to be initiated the Payroll Authorization Forms (“PAFs”) necessary to charge Sponsored Projects with employee salaries based on estimates of the level of Effort to be performed;
5. notifying the Office of Research and Graduate Studies when reductions in Effort of key personnel are the lesser of 25% or the Sponsor’s requirement;
6. identifying situations where the charges for salary representing the Effort devoted to an Award is more than the actual percent of Effort devoted to the Award;
7. correcting the Effort Report/Personnel Activity Report when there is a significant variance between the estimates of level of Effort anticipated on PAFs and actual level of Effort experienced;
8. certifying his/her own Personnel Activity Report and certify Personnel Activity Reports of others working on his/her awards in a timely fashion. If the Principal Investigator/Project Director is not able to sign the form, an employee, designated by the Principal Investigator/Project Director, who has a suitable means of verification that the work was performed, may sign;
9. completing the Effort Report (Personnel Activity Report), in accordance with University Policy, within 30 days from the end of the month in which Effort is reported; and
10. ensuring that the Effort related to the receipt of Summer Salary is performed within the summer and that the monthly rate does not exceed the base monthly salary for the academic period.

7. Roles and Responsibilities: Deans, Associate Deans, Assistant Deans, and Department Chairs

The Deans, Associate Deans, Assistant Deans and/or department Chairs are responsible for:

1. understanding and ensuring compliance with the University’s Effort Reporting policy and procedures, including providing oversight, effective processes and controls, and problem resolution;
2. approving Voluntary Committed Cost Sharing and Mandatory Cost Sharing, as appropriate; and
3. reviewing proposed sponsored activity to ensure that other activities required of the faculty member will not conflict with the proposed Effort commitment.

8. Roles and Responsibilities: The Office of Research and Graduate Studies

The Office of Research and Graduate Studies is responsible for:

1. ensuring that proposals submitted to Sponsors are reviewed in accordance with the requirements of this policy and the Sponsor;
2. reviewing Awards to ensure that appropriate cost sharing accounts are created for both Voluntary Committed Cost Sharing and Mandatory Cost Sharing;
3. reviewing, approving, and/or seeking Sponsor approval for University requests for reductions of Effort as required by Sponsor terms and conditions;
4. maintaining a University-wide policy on Effort Reporting and salary certification that complies with federal requirements; and
5. providing guidance on requirements and procedures as requested or as needed.

9. Roles and Responsibilities: Grant and Contract Accounting

Grant and Contract Accounting is responsible for:

1. preparing and distributing Personnel Activity Reports, within five business days of month-end for all individuals charged to Sponsored Projects through the payroll system;
2. ensuring that Effort Reports are completed and certified timely;
3. initiating corrective action for Effort Reports that are not certified in a timely manner which includes notifications and potential reallocation of resources of the school, college, department, division, center, or institute;
4. making any necessary adjustments to Sponsored Project charges when Effort changes/variances are reported;
5. retaining supporting documentation related to salary and Effort distributions;
6. assisting with questions regarding Effort Reporting principles and/or process; and
7. coordinating audits of Effort Reporting and/or providing supporting information to auditors or agencies as requested.

10. Sanctions and Non-Compliance

1. All individuals involved in the Effort certification process must abide strictly by the provisions of this policy. Failure to follow the provisions of this Effort Reporting policy may place the University and those involved at considerable risk.
2. If Effort Reports are not completed and returned in a timely fashion, salary costs associated with uncertified grant activity may be charged to a departmental account.
3. Work on Sponsored Projects and/or submission of any new proposals on behalf of a noncompliant Principal Investigator/Project Director may be suspended until Effort Reports are current and properly completed.
4. Consequences for violation of this policy could include financial penalties and fines, unallowable expenditures to the Award and damage to the University’s reputation that may hinder its ability to attract future Awards. In addition, criminal charges may be brought against an individual certifying a falsified Effort Report. Certified Effort Reports that are inaccurate or fraudulent and provide the basis for institutional claims for reimbursement of direct and indirect charges under a federal Contract or Grant may give rise to civil penalties; criminal sanctions, if the violation was willful, of imprisonment and fines; and an order to reimburse the government for damages sustained by the government because of the individual’s act. Institutional sanctions may include the payment of costly settlements or even debarment from participating in federally funded Grants or Contracts.

11. Related Policies, Procedures, and Guidelines

• University Policy 10.1, Sponsored Research and Activities
• University Policy 10.2, Compensation from Research and Sponsored Projects
• University Policy 10.14, Sponsored Project Cost Sharing
• Research Handbook

Appendix A: Definitions

“Award” means a Grant, subgrant, Contract, subcontract, or Cooperative Agreement that provides for Funding.

“Committed Cost Sharing” means a binding commitment of the University to provide resources for a Sponsored Project which the University must provide as part of the performance of the Award. Committed Cost Sharing may be Mandatory Cost Sharing or Voluntary Committed Cost Sharing.  These costs must be documented and reported.

"Contract" means a legally enforceable agreement between the University and a Sponsor that provides Funding when a primary purpose is delivery to the Sponsor of property or services for the benefit of the Sponsor, in addition to the research, educational, or service benefit to the University.

"Cooperative Agreement" means a legally enforceable agreement between the University and a Sponsor that provides Funding when substantial interaction between the Sponsor and the University is anticipated during the performance of the Sponsored Project.

“Cost Sharing” means that portion of the costs of a Sponsored Project not borne by the Sponsor. Cost Sharing may be in the form of direct costs (personnel or non-personnel) or F&A costs subject to a Sponsor’s restrictions. Cost Sharing may be In-Kind, Matching, Mandatory Cost Sharing, Voluntary Committed Cost Sharing, Committed Cost Sharing, or Voluntary Uncommitted Cost Sharing. These costs are borne by the University or other third parties (including non-federal third parties in the case of a federal Award), rather than by the Sponsor. Since faculty salaries at the University are usually paid for by a faculty member’s or staff member’s department, Cost Sharing of Effort represents a redirection of departmental resources from teaching or other departmental activities to support a Sponsored Project.

“Departmental Research” means research, development and scholarly activities that are not organized research and, consequently, are not separately budgeted and accounted for.

“Effort” means the time spent on Sponsored Projects and all other activities for which an individual is compensated by the University. Effort on a Sponsored Project is expressed as a percentage of the individual’s Total University Effort and includes the time spent working on the Sponsored Project to which salary is directly charged or contributed as Cost Sharing.

“Effort Report” is the After-the-Fact Activity Report (also known as the Personnel Activity Report or PAR) reflecting the percentage of time (Effort) an employee has spent on each specific activity for which the University compensates the employee.

“Effort Reporting” is the process by which the University determines and documents the Effort expended on Sponsored Projects during each Effort Reporting period.

“Funding” means financial support for a Sponsored Project, including money, property, services or anything of value in lieu of money.

"Grant" means a legally enforceable agreement between the University and a Sponsor that provides Funding when:

1. the Sponsor has no expectation of delivery of a specific product or service other than a final written report;
2. no substantial interaction between the Sponsor and the University during performance is anticipated; and
3. the agreement contains general terms and conditions that stipulate a period of performance and minimal reporting requirements.

“Incidental and Related Work” contributes to and is integrally related to work under an Award, such as delivering special lectures about specific aspects of ongoing activity, writing reports and articles, developing and maintaining protocols (human, animals, etc.), managing substances/chemicals, managing and securing Sponsored Project-specific data, participating in appropriate seminars, consulting with colleagues and graduate students, and attending relevant meetings and conferences.

“Institutional Base Salary” means the annual compensation paid by the University for an employee’s appointment, whether that employee’s time is spent on research, teaching or other activities and whether the individual is employed full-time or part-time. Institutional Base Salary does not include bonuses, one-time payments or incentive pay. Also excluded from Institutional Base Salary is salary paid directly to the employee by another organization and income that an employee is permitted to earn outside of the employee’s University responsibilities under University Policy 2.9, Consulting and Sponsored Projects.

Institutional Base Salary:

1. is established by the University in an annual letter and/or Pay Rate Change (“PRC”) form regardless of the source of funds;
2. includes regular salary, a second assignment such as chair of a department or director of a program;
3. excludes bonuses, honoraria, and extra compensation; and
4. may not be increased as a result of replacing University salary funds with Sponsored Project funds.

“Mandatory Cost Sharing” is Cost Sharing that a Sponsor requires the University to provide as a condition of obtaining an Award. It must be included or a Proposal will receive no consideration for Funding by the Sponsor.

“Matching” is synonymous with “Cost Sharing”.

“Organized Research” means all research and development activities of the University that are separately budgeted and accounted for. It includes Sponsored Projects that are categorized by the Office of Research and Graduate Studies as “research” and University Research activities that are not Sponsored Research, but are separately budgeted and accounted for by the University.

“PAFs” are Payroll Authorization Forms. PAFs identify each individual, his/her employee identification number, frequency of pay, Sponsored Project to be charged, rate of pay and time period during which each individual will be paid.

“PARs” are Personnel Activity Reports as described herein.

"Principal Investigator/Project Director” means the individual solely responsible for technical conduct of a Sponsored Project, technical contact with the Sponsor, expenditure of Sponsored Project Funding, and fulfillment of technical performance and reporting obligations under an Award. "Principal Investigator” (PI) includes an individual designated in an Award as "Project Director" (PD), when performing the functions of a Principal Investigator, or other individuals performing the functions of a Principal Investigator. For the period of the Award, the Principal Investigator/Project Director must be a full-time employee (staff, tenured or, tenure track faculty, Research Professor, Research Associate Professor, Research Assistant Professor, or, if approved by the Provost or his or her designee, a non-tenure track, non-tenure eligible faculty member) appointed pursuant to University Policy 2.3, Faculty Ranks, Academic Titles, and Voting Rights.

“Proposal” means the document submitted to a Sponsor requesting Funding for a Sponsored Project which includes, without limitation, (i) Financial Obligations, Regulatory Obligations, Reporting Obligations or Accounting Obligations, as described under “Sponsored Projects”, (ii) a Statement of Work and (iii) a budget.

“Research Handbook” is a document maintained by the Office of Research and Graduate Studies outlining current procedures and requirements for the proposing, acceptance, execution, and oversight of Sponsored Projects.

“Significant Difference” is a variance of 5% or more above or below an employee’s Total University Effort.

"Sponsor” means any external entity that provides Funding to the University. Sponsors may be (i) governmental agencies (for example, federal, state or local governments, or their administrative organizations); (ii) nonprofit organizations (for example, universities, nonprofit corporations, foundations, or associations); (iii) for profit organizations (for example, corporations, partnerships, sole proprietorships, and other business entities); or (iv) individuals.

"Sponsored Projects” means all projects, programs, research, training, public service and other activities that receive external Funding through Grants to the University or through Contracts or Cooperative Agreements between the University and a Sponsor, where one or more of the following obligations applies:

1. Financial Obligation. The University is required to comply with conditions imposed when a Sponsor awards Funding for the performance of services or delivery of products described in a Statement of Work;
2. Regulatory Obligation. The University is required to comply with Sponsor regulations.
3. Reporting Obligation. The University is required to provide to the Sponsor technical performance reports or regulatory or administrative reports; or
4. Accounting Obligation. The University is required to establish a separate accounting record of Sponsored Project expenditures to demonstrate allowability of costs, to maintain financial accountability, to make financial reports to the Sponsor, and to preserve appropriate records for audit.

“Statement of Work” means the component of a Proposal or an Award that describes the specific work to be undertaken and the products that will be produced by the Sponsored Project.

“Summer Salary” is compensation to faculty for Effort performed beyond their period of appointment.

“Total University Effort” is defined as all activity for which the University compensates an individual, whether on a full-time or part-time basis, including students who are working as teaching or Research Assistants.

“University Policies” means, for the purposes of this policy, all University Policies included in the University Policy Manual and all other procedures, guidelines and requirements of the Office of Research and Graduate Studies and the Office of Grant and Contract Accounting included in the Research Handbook, and the procedures, guidelines and requirements of all University colleges, schools, departments, centers, institutes and divisions.

“Voluntary Committed Cost Sharing” represents quantified University resources offered in the proposal by the University when the Sponsor does not require a specific contribution.

“Voluntary Uncommitted Cost Sharing” is defined as Effort by University faculty (including senior researchers) that is over and above that which is committed and budgeted for in an Award.

Revised: December 16, 2019

Adopted: January 15, 2015