Procedure | Effort Certification
The federal government, through the Office of Management and Budget (OMB) Circular A-21, Section J.10, requires effort certification on externally-sponsored activity. In order to receive and maintain eligibility for funding, sponsoring agencies require accurate and reasonable documentation to support that labor charged to sponsored accounting units are consistent with the effort expended.
The fundamental principle regarding the methodology to be used is that an individual’s effort on a particular project must be reported as a percentage of his/her total effort for the institution (“total institution effort”) during the relevant time frame. This percentage is derived from a fraction where the numerator represents the researcher’s time/effort on the project. The denominator must encompass both sponsored and all other activities and must “reasonably reflect the activity for which the employee is compensated by the institution.” This means that all (except extra compensation-related activities) of the researcher’s effort in teaching, research, service, and administrative activities must be included in the denominator. Sponsored research projects; scholarly activities; mentoring graduate students; service on departmental, college, or university committees, or panels, etc. are all part of an employee’s “total institutional effort;” and time spent on these activities must be included in accurate effort reports.
Tennessee Technological University’s Effort Certification Policy is intended to meet this federal requirement.
A. Employee Effort Certification Reports
Employee Effort Certification Reports will reasonably reflect the percentage distribution of efforts expended by Tennessee Tech faculty and exempt professional staff involved in federally-funded grants, contracts, and cooperative agreements. The report will account for 100% of an employee’s actual effort for the given time period.
100% effort is defined as the effort expended to accomplish the full set of activities encompassed by Tennessee Tech appointments regardless of the actual number of hours expended on those activities. 100% effort is not defined as a single, standard number of hours or days per week because it will likely be different for each faculty/staff member and may vary during the year. The number of hours implicit in an individual faculty member's 100% must be reasonable and supportable to department, school, college, and external reviewers if requested.
The employee should indicate the percent effort (number of hours worked on an individual activity divided by the total number of hours worked for Tennessee Tech) for all sponsored research and curricular (i.e., instruction, administration, public service) activities.
The employee should provide an account of all effort expended on a sponsored activity, even if the sponsor did not compensate the employee for that activity, which constitutes “cost sharing.” This can occur on an involuntary or voluntary basis. Involuntary cost sharing occurs when it is required by the sponsor at the time of application. Voluntary cost sharing represents additional effort expended on a project that is not required by the sponsor. Although it is Tennessee Tech’s practice to minimize voluntary cost sharing, the PI must record all effort expended on their projects regardless the source of compensation.
Employee Effort Certification reports do not need to be completed by clerical staff or students who fill out a weekly time sheet.
Principal Investigators will be required to verify that the information provided by any employees working on their grants is accurate.
Employee Effort Certification Reports are required for three reporting periods annually (fall semester, spring semester, and summer) and must be submitted to the Grant Accounting Office no later than the 30 days after the end of the reporting period.
Completed Employee Effort Certification Reports will be filed in the Grant Accounting Office.
B. Other Items of Note
- If a PI will have a 25% (or greater) reduction in effort and/or an absence of three months (90 days) or longer on a specific project, approval must be obtained from the sponsoring agency.
- Changes in effort require approval from the chair, dean, and Office of Research prior to submitting to sponsoring agency.
- Time spent in the preparation of proposals cannot be charged to a sponsored accounting unit. Therefore, it is inappropriate for an employee to be paid from sponsored accounting units to prepare and submit proposals.
- Any person paid (or with a commitment) on a sponsored award must certify that the salary paid (or the commitment) is reasonable in relation to the effort (activity) devoted to the award.
- A principal investigator can certify efforts for graduate students and post-doctoral assistants on his/her sponsored projects.
- Effort refers only to the institutional base salary and does not include additional compensation (extra pay).
- Institutional base salary is the annual compensation paid by Tennessee Tech for employee’s appointment whether that individual’s time is spent on research, teaching, administration or other activities. Base salary excludes any income that an individual is permitted to earn outside of duties for the applicant/grant organization.
- Total institutional base salary must be distributed across all of a faculty member’s institutional activities (instruction, research, public service, administration).
- Voluntary uncommitted cost-sharing is effort expended or contributed to a project that is not required by the sponsor and it is not proposed in the budget. This effort is excluded from effort reporting.
- The variance between the committed effort and actual effort should be within a ± 5% range.
- Payroll distributions and effort reports are not the same thing. Payroll distributions are the distribution of an individual’s salary, while effort reports describe the allocation of an individual’s actual time and effort spent for specific projects, whether or not reimbursed by the sponsor. Thus effort reporting is separate from and can be independent of salary charges.
- Documentation on how individuals spend time on federally sponsored projects is subject
to federal audit and can be cause for institutional or individual disallowances.
Institutional disallowances can result if:
- The effort report was certified by an individual other than the employee or someone who has “first-hand” knowledge of 100 percent of the employee’s time;
- The effort report does not encompass all of the activities performed by the employee under the terms of his/her employment;
- The levels of effort reported do not appear reasonable, given the responsibilities
of the individual.
Individual disallowances can result if:
- The effort report certified by the individual is found to be falsified;
- The levels of effort reported do not appear reasonable.
It is imperative that information provided on effort certification forms is true and accurate. False claims as governed by the Federal False Claims Act (Title 31 of the U.S. Code, Subtitle III, Chapter 37, Subchapter III, §3729-3733) and the Tennessee False Claims Act (T.C.A. §4-18-103) can result in severe civil and criminal penalties. Penalties for violation of the Federal False Claims Act include a civil penalty of not less than $5,500 ad not more than $11,000 for each false claim plus 3 times the amount of damages sustained by the government. Penalties for violation of the Tennessee False Claims Act include a civil penalty of not less than $2,500 and not more than $10,000 for each false claim. Additionally, any civil liability opens the possibility for criminal investigation which can result in imprisonment for up to five years and possible fines as indicated in Title 18 of the U.S. Code, Part I, Chapter 15, §287.
For further information, contact the Research Office at ext 3202.