VANDERBILT UNIVERSITY

EFFORT REPORTING POLICY

Effective Date: January 1, 2002

BACKGROUND

On July 23, 1982, the Office of Management and Budget (OMB) revised Circular A-21 "Cost Principles for Educational Institutions" to allow institutions to develop effort systems other than monitored workload and personnel activity report systems for the purpose of identifying costs associated with federal sponsored activities. In addition, effective July 1, 1987, OMB revised Circular A-21 to eliminate the need for faculty to certify to their administrative effort. Faculty members are still required to certify direct effort on sponsored programs, as are staff members. In response to these changes in federal requirements, Vanderbilt University began utilizing the plan confirmation system effective July 1, 1989. The plan confirmation system allows effort to be certified directly on the Personnel Action Form (PAF) or time sheet.

In an OMB clarification dated January 5, 2001 to OMB Circular A-21, there is an indication that most federally funded research programs should have some level of committed faculty (or senior researchers) effort, either in the form of a direct charge or committed voluntary cost sharing. This effort can be provided at any time within the fiscal year (summer months, academic year, or both). Some types of research programs such as programs for equipment and instrumentation, doctoral dissertations, and student augmentation do not require faculty effort, paid or unpaid by the federal government.

Faculty and staff members are required to certify direct effort (and direct cost shared effort) on federal (or federal flow through) sponsored programs through the plan confirmation system. An annual after the fact certification process will occur for faculty members paid summer salary from federal restricted funds (see Special Considerations).

STANDARDS

OMB Circular A-21 sets forth the following standards for the plan confirmation system:

(a) A system of budgeted, planned, or assigned work activity will be incorporated into the official records of the institution and encompass both sponsored and all other activities on an integrated basis. The system may include the use of subsidiary records.

(b) The system will reasonably reflect only the activity for which the employee is compensated by the institution.

(c) The system will reflect activity applicable to each sponsored agreement and to each category needed to identify Facilities and Administration (F&A) costs (i.e. indirect costs) and the functions to which they are allocable. The system may treat F&A cost activities initially within a residual category and subsequently determine them by alternate methods.

(d) The system will provide for modification of an individual's salary or salary distribution commensurate with a significant change in the employee's work activity. Short-term (such as one or two months) fluctuation between workload categories need not be considered as long as the distribution of salaries and wages is reasonable over the longer term, such as an academic period or budget period of a project.

(e) Certifications must be signed at least annually by either the employee, principal investigator, or responsible official(s) with firsthand knowledge using suitable means of verification that the work was performed, stating that salaries and wages charged to sponsored agreements as direct charges, and to residual, F&A cost or other categories are reasonable in relation to work performed.

(f) The system will provide for independent internal evaluation to ensure the system's integrity and compliance with the above standards.

(g) In the use of this method, an institution shall not be required to provide additional support or documentation for the effort actually performed.

FACULTY

Vanderbilt University is responsible for obtaining effort certifications no less frequently than annually on faculty only when their salary is charged directly on federal sponsored agreements, including direct cost shared effort. This is accomplished by incorporating a certification statement into the personnel action form (PAF) when any portion of a faculty member's salary is charged to a federal sponsored agreement (Attachment A).

Federal sponsored agreements are defined as those centers with a federal attribute of "Y" attached to the center. Federal flow-through funds received from industry, other universities and the State are included. The federal attribute is assigned by the Office of Contract and Grant Accounting for centers in University Central and Department of Finance, Academic & Research Enterprise for centers in Medical Center and can be found in M&D on the U01U4 screen. This attribute should correspond with specific center number ranges (Attachment B).

Payroll distribution changes involving sponsored agreements must be processed using personnel action forms and must follow Vanderbilt's Cost Transfer Policy (see http://www.vanderbilt.edu/ocga/vupolicies/costtransfers/costtransfers.htm).

Example:
Professor Jones is paid 100% from departmental unrestricted instructional funds. In September he receives a grant from the National Institutes of Health (NIH) that is budgeted to pay 20% of his academic year salary starting October 1st. The department submits the personnel action form on file in time to affect October payroll, adding the center number for the NIH grant @ 20% and reducing the departmental unrestricted center to 80%. No certification is needed at this point. The form is processed through the regular channels. When the new personnel action form is received, it will reflect the new payroll distribution and will have a certification statement printed on it. The certification statement must be signed the next time that Professor Jones' salary distribution is revised.

In January, Professor Jones receives a grant from IBM that will pay 10% of his salary for the remainder of the academic year. The personnel action form is retrieved and revised to reflect 70% departmental, 20% NIH and 10% IBM. The certification that was pre-printed on the personnel action form must now be signed. The person signing will be certifying that the previous salary distribution (80% departmental and 20% NIH) was reasonable in relation to effort expended on the NIH project.

The person signing the certification must have first hand knowledge of the work performed by Professor Jones or a suitable means of verifying that the salary charges to the NIH project was reasonable in light of the effort expended on the project.

NON-EXEMPT STAFF

Vanderbilt is responsible for obtaining certifications on staff effort for salaries charged directly on sponsored agreements.

Hourly timesheets for all non-exempt staff paid from academic departments will contain the certification statement (Attachment C). Personnel action forms for hourly individuals will not have certifications and are not required for short-term changes in payroll distribution.

The certification on the timesheet must be signed by an individual with first hand knowledge of (or have suitable means of verifying) work performed by this individual and that the salary distribution for the period covered is reasonable in relation to the work performed.

EXEMPT STAFF

Exempt staff members paid directly from federal sponsored programs are required to certify effort no less frequently than annually. This is accomplished by incorporating a certification statement into the personnel action form (PAF) when any portion of an exempt staff's salary is charged to a federal sponsored agreement (Attachment A).

Federal sponsored agreements are defined as those centers with a federal attribute of "Y" attached to the center. Federal flow-through funds received from industry, other universities and the State are included. The federal attribute is assigned by the Office of Contract and Grant Accounting for University Central centers and Department of Finance, Academic & Research Enterprise for Medical Center centers and can be found in M&D on the U01U4 screen. This attribute should correspond with specific center number ranges (Attachment B).

The departmental administrator is responsible for obtaining the effort certification signature from the individual that has first hand knowledge of (or has used suitable means of verifying) work performed by this individual and the salary distribution prior to the effective date of the change is reasonable in relation to work performed.

SPECIAL CONSIDERATIONS

FACULTY SUMMER SALARY
If summer salary is paid to faculty from federal restricted funds, an after the fact certification must be obtained. The Office of Contract and Grant Accounting will send a certification form (Attachment D) to the departmental administrators on an annual basis for each faculty member in their department that was paid from federal funds during the previous summer. The departmental administrator is responsible for obtaining the effort certification signature from the individual that has first hand knowledge of the work performed or a suitable means of verifying that work was performed and returning the signed form to the Office of Contract and Grant Accounting in a timely manner.

TIMELINESS OF PERSONNEL ACTION FORMS
It is critical to process personnel action forms in a timely manner so that they reflect the current salary distribution especially if federal funds are involved.

RETROACTIVE ADJUSTMENTS TO SALARY DISTRIBUTION
Retroactive salary transfer requests will be processed using personnel action forms and will be reviewed by the Office of Contract and Grant Accounting (University Central) and the Department of Finance, Academic & Research Enterprise (Medical Center) for reasonableness and consistency within federal guidelines.

Personnel action forms that reflect retroactive adjustments to payroll distribution involving contracts and grants must be accompanied by written documentation addressing the circumstances that led to the need for a retroactive distribution correction (see Cost Transfer Policy).

CERTIFICATIONS
Certification used on personnel action forms for faculty and exempt staff:

"I certify that I have first hand knowledge of (or have used suitable means of verifying) work performed by this individual and the salary distribution prior to the effective date of this change is reasonable in relation to work performed."

Certification used on timesheets for non-exempt staff:

"I certify that I have first hand knowledge of (or have used suitable means of verifying) work performed by this individual and that the salary distribution for the period covered is reasonable in relation to work performed."

ACADEMIC AND ADMINISTRATIVE RESPONSIBILITIES

DEAN'S OFFICE AND ACADEMIC DEPARTMENT RESPONSIBILITY

• Maintain an effective system of processing personnel action forms, timesheets and additional pay forms to ensure timely, reasonable distributions to sponsored projects and other departmental centers.
• Maintain an effective system of verification of work performed to ensure that certified payroll distributions are a reasonable reflection of the actual work performed.
• Maintain an effective system to ensure that individuals signing effort certifications do, in fact, have first hand knowledge of the activities of the appropriate faculty and staff or a suitable means of verifying that the work was performed.
• Maintain an effective system of processing after-the-fact effort certifications administered outside of the plan confirmation system in a timely manner.

HUMAN RESOURCES RESPONSIBILITY

• Assist in the review of personnel action forms to ensure that all certification statements are properly signed.
• Retain and archive all original personnel action forms.
• Provide access to information for external and internal audit purposes.

PAYROLL / MEDICAL PAYROLL RESPONSIBILITY

• Retain and archive all original timesheets and additional pay forms.
• Provide access to information for external and internal audit purposes.
• Assist in the review of all timesheets and additional pay forms to ensure that certification statements are properly signed.
• Medical Payroll will also assist in the review of all Medical Center personnel action forms to ensure that all certification statements are properly signed.
• The Payroll Office will process memoranda received from the department concerning retroactive distribution changes on unrestricted centers.

OFFICE OF CONTRACT AND GRANT ACCOUNTING (OCGA)/ DEPARTMENT OF FINANCE, ACADEMIC & RESEARCH ENTERPRISE RESPONSIBILITY

• Process memoranda received from the department concerning retroactive distribution changes on centers (OCGA processes memoranda on University Central restricted centers and the Department of Finance, Academic & Research Enterprise processes memoranda on Medical Center restricted and unrestricted centers). Review for signed effort certifications, reasonableness, compliance with Cost Transfer Policy and sufficient written documentation.
• OCGA will process and retain after the fact certification forms for faculty summer salary paid from federal sources.

COMMONLY ASKED QUESTIONS

Question: Is the budget a reasonable method for allocating payroll distribution charges and certifying effort on restricted centers?

Answer: No. A person should be charged and certified on the center(s) where the actual work was performed.

Question: How long should the personnel action forms, timesheets, or additional pay forms be retained?

Answer: We are required to retain all records pertinent to a federal grant or award until 3 years after the date of submission of the final expenditure report (per Office of Management and Budget Circular A-110, Subpart C, .53(b)). For example, a 5-year project that began in March 1993 where the final expenditure report was submitted in June 1998 requires retention of all records until July 2001.

Question: Does cost shared effort on a federal award have to be certified?

Answer: Yes.

Question: Can anyone sign the effort certification?

Answer: Anyone can sign the effort certification IF they have first hand knowledge of the work performed or a suitable means of verifying that the work was performed.

Question: What happens if effort is not certified when it should be?

Answer: A variety of possible outcomes could occur, such as audit findings, disallowance by sponsors, large settlement amounts, and newspaper headlines. There is also a risk of extrapolation of findings to other grants and grant years.

CONTACTS

Office of Contract and Grant Accounting:

Department of Finance, Academic & Research Enterprise: