The federal government requires an effort report when an individual is compensated by or has agreed to contribute time to a federally sponsored project. All faculty who serve as investigators on sponsored agreements are personally responsible to certify the amount of effort that they and their employees spent on sponsored activities.
The university fulfills the effort reporting requirement through the use of paper certifications mailed to the department coordinator. The reports are generated three times a year (January-May, June-August, and September-December). A grace period of approximately 6 weeks is given from the time the reports are mailed to department coordinators until the time they are due back to Research Accounting with original signature certification. Once an effort report has been certified, payroll cannot be reallocated to an alternate fund. Changes to an effort report should be accompanied by a copy of the Assignment Appointment Form (AAF) that supports those modifications.
Effort is defined as the amount of time spent on a particular activity. It includes the time spent working on a sponsored project in which salary is directly charged or contributed (cost-shared).
Individual effort is expressed as a percentage of the total amount of time spent on work-related activities for which the university compensates an individual.
Effort reporting is the mandated method of certifying to the granting agencies that the effort charged or cost shared to each award has actually been completed.
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.
The Office of Management and Budget’s (OMB) "Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards" (Uniform Guidance), 2 CFR Chapter I, Chapter II, Part 200 et al. is the government's cost principles for colleges and universities. It defines what costs are allowable and allocable to federal grants and other “assistance” agreements.
The Uniform Guidance 2 CFR Section 200.430 sets forth criteria for acceptable methods of charging salaries and wages to federally sponsored projects. This requires a payroll distribution system that directly charges salaries to appropriate projects.
In addition, the Uniform Guidance requires that institutions develop a mechanism to determine or confirm how individuals actually expend effort during a specified time period. These effort reports must be performed on a regular schedule and must be certified by individuals who have first-hand knowledge of 100 percent of the employee's compensated activities. In most cases, that would be the employee or the employee's direct supervisor.
Risks of not complying with federal effort reporting requirements
In recent years, the federal government and its auditors have become much more active in their review of effort reporting requirements, and a number of universities have received large audit disallowances as a result.
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 their 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.
Federal audit disallowances can result in serious financial penalties for institutions. In addition, criminal charges may be brought against an individual certifying to falsified effort.
Reporting - Technical
Reporting on the use of grant funds is an essential part of the funding process. Timely reports are important to the individual researcher and to Lehigh University's continuing relationship with the foundation or agency. Lack of compliance with reporting could jeopardize review of proposals being submitted regardless of the role of the researcher.
- ORSP provides detail on required reporting through the distribution of a Fund Requirement, which provides a summary of the terms and conditions of the award. Reminder notifications are also provided via email.
Submission requirements vary. Most now are accomplished by the PI directly through agency websites. Copies of any transmittal document for the report and the report should be provided to ORSP through your Contract and Grant Specialist (CGS).
Reporting - Other
Financial Reporting is provided through Research Accounting. Invention/Patent Reporting and all other non-financial and non-technical reporting is provided by the CGS. Chronic noncompliance with sponsor regulations can result in nonpayment of university invoices. Ultimately, this might jeopardize future funding to the PI, as well as to the university as a whole. As a reminder, many sponsors will not remit final payment until satisfactory final program and financial reports have been received and accepted.
Requests for assistance should be directed to the researcher's Contract and Grant Specialist.