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What is an Effort Report (ER)?
The ER is the receipt that auditors use to document the amount of effort actually performed (both directly charged and pledged as cost sharing) on a restricted grant or contract.
Why do we have ERs?
Effort reports are required by federal regulation (OMB Circular A-21 section J-10). Auditors use ERs to validate that the percent of salaries charged or cost shared to the project, are justified by comparing them to the effort percentages reported on the effort report. If, for example, an auditor could not find an ER, or the percentage of salary charged to the project is more than the percentage of effort reported (effort %), the auditor will request a refund of the difference. All Universities receiving grants, cooperative agreements or contracts from the federal government must have an effort reporting system.
Who has to complete ERs?
Only those individuals with salary charged, or committed as cost sharing, to projects funded from the Federal Government, the State of Michigan, or from other agencies that specifically require salary/cost sharing documentation (i.e. most sponsored project RC, federal MSUE RE and federal AgBioResearch RA accounts). The time reports for students and on-call/temp employees paid by CATS serve as their effort receipt, therefore, they will not have ERs.
MSU used to have Semester Effort Reports (SER’s), why did the system change?
The SER system was based on the payroll system that was replaced in December 2010 when MSU implemented SAP. Because the system had to be rewritten to be compatible with the SAP data structure, several enhancements were also incorporated.
What has changed with the new system?
As little as possible, but there are two main changes. First, the system is now web-based, so there will be no lost forms and the ER can be completed anywhere with an internet connection, and second, the frequency of reporting has changed to two times a year (equates to a 33% reduction in paperwork!).
In addition, academic year salary is identified separately from summer pay, to help clarify the impact on pay percentages as a result of including ½ of the summer semester in each effort period. The web format also allows the details behind to payrolls to be shown with a single click!
How should I complete my Effort Report when the numbers in the Total Commitment column don’t add to 100%?
The difference should be related to rounding (yes, our programmers have had fun chasing this one – not!) so please complete the numbers in the red boxes so they add to 100%. The federal government actually allows for a small margin of error (less than 5%) due to the imprecise nature of effort reporting. We suggest you do the rounding on the total unsponsored percent and if there is no unsponsored account, then on the account with the largest commitment. For example, if the Total Commitment column added to 101 or 99, and there is no unsponsored account, but one of the sponsored accounts shows 80%, there will be no audit issues if you put 79 or 81 (whatever is needed to fix the rounding) in the red box for that account.
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Why is the new system based on 6 month periods instead of semesters?
To reduce the administrative burden on faculty, and to address the National Science Foundation (NSF) two months of salary policy (for senior project personnel) by averaging summer over the two 6 month periods. Many divisions within NSF (MSU's largest federal agency) hold a belief that AY salaries should be supported by the institution, but have historically allowed summer salaries (limited to 2 months). By splitting the summer payrolls evenly between the first effort reporting period (1/1 – 6/30) and the second reporting period (7/1 – 12/31), it more accurately reflects the efforts being performed over the reporting period(s).
Now that we have 6 month effort reporting periods do we still need the Federal Summer Load and Salary Certification Form?
No. The Federal Summer Load and Salary Certification Form was created for Academic Year (AY or 9 month) appointments receiving 2.5 months or more of summer salary when summer salary was certified as one period. Please be aware that 100% time during the summer on sponsored projects may be problematic as the academic year salary rate does not include vacation and generally writing proposals or performing departmental duties are not allowable expenses on federal awards.
I'm the Principal Investigator (PI) on a project but I don't see any Effort Reports to certify. Is something wrong with the system?
Probably not. ER’s are a federal requirement that we extend to State of Michigan projects because many State projects have a federal component. We also turn on effort reports for projects that have cost sharing because effort reporting is the easiest way to document those commitments. ERs are also not required for federal fixed price accounts as they are evaluated based on performance milestones. If you have a federal or State project that you would have thought should have effort reports for, please send an e-mail to firstname.lastname@example.org or email@example.com and we will verify how the account is setup.
Will I have an Effort Report in the web portal if I’m not paid by MSU, for example emeritus appointments?
MSU policy allows (encourages) retired faculty to continue to serve as the PI of their projects. However, because our Effort System is payroll based and emeritus appointments usually don’t include salary, there will not be an Effort Report in the CGA portal. For those accounts that require cost sharing, or a confirmation that the effort listed in the proposal was fulfilled, the non-paid PI will need to prepare a short email to CGA certifying the effort on the project. Language similar to the following works best. “I certify that for the time period from X to Y, I have devoted approximately xx% of my effort (assuming a regular MSU full time appointment) to the project titled “name of project from the eTransmittal” which is setup in account RCxxxxxx and funded by the Agency Name. This email should be done on a semi-annual basis corresponding to the effort reporting period (Jan-June, July-Dec). CGA will then calculate the value of cost sharing using the last salary rate the employee was paid by MSU.
How often are ERs necessary?
ERs are required two times per year.The effort reporting periods are: Effort Period 1 = January 1 – June 30 and Effort Period 2 = July 1 – December 31.
What is the timing of ER during the year?
For the January – June 30 period, referred to as Effort Period 1 201x, an email will be sent to the Departmental Effort Reporting Administrators in early September, so they can review the department’s effort reports and process any necessary payroll changes. PI’s and other individuals will be sent an e-mail in October notifying them their ER’s are ready for completion. First period ERs must be completed by 12/31. For the July – December 31 period, referred to as Effort Period 2 201x , an email will be sent to the Departmental Effort Reporting Administrators in early February, so they can review the department’s effort reports and process any necessary payroll changes. PIs and other individuals will be sent an e-mail in March notifying them their ERs are ready for completion.Second period ERs must be completed by 6/30.
What if the ER is not completed?
Salaries and/or cost sharing commitments that do not have the proper supporting documentation, i.e. a completed ER, will be removed from the account. CGA will work with the department to transfer the salaries to the department’s GA01 account, unless an alternative unrestricted account is provided by the department.
How do I access my ER?
Log in to CGA’s website and under “Effort Reporting” on the left hand side, click on “My Effort”. You can also access your ER from your Portal after logging into CGA’s website (click on “Portal” at the top right side of the webpage).
How do I complete the ER?
Report the percentage of effort actually performed during the 6 month period in the red boxes. Then click on the “Certify” button at the bottom of the effort report. Please use whole numbers only and do NOT enter the percent sign. The system will not allow the Effort Report to be certified until the total effort reported for all accounts equals 100%. Do NOT click on the "recertify" button unless you made a mistake and need to recertify.
What if I made a mistake when I certified my effort?
The good news about the federal requirements for effort reporting is that the numbers you record in the red boxes don't have to be backed up by a shadow system that keeps detailed time records. As a professional, they expect that you will reasonably and accurately report your effort you devoted to the project(s). As a result, requests to change ERs are closely reviewed by CGA. However, honest mistakes do happen and the system was built to allow corrections/recertification's for the first 14 days after original certification date without the need for additional documentation. If the request to recertify the effort report is made after the 14 day period (or after the certification period for an effort reporting cycle), a letter of justification or email from the individual (with a copy to the PI and chair) must be submitted to firstname.lastname@example.org in order for CGA to consider allowing recertification. The letter/email should include:
Who can certify the ER?
Can my Effort Administrator certify my delegated effort reports or my own?
Generally, no. OMB A-21 requires effort reports to be confirmed by a "responsible individual with suitable means of verification that the work was performed." This means that the individual certifying the effort report needs to have an understanding of the individual's regular duties, as well as direct knowledge of the work performed (typically supported by some form of written documentation). Examples of written documentation include a detailed calendar, meeting notes, lab notes, time/attendance sheets, travel reports, or award work products (presentations, reports, events held, etc.). Effort administrators are typically not responsible for ensuring the individuals are working on a sponsored project as committed and generally do not have direct knowledge of the work performed. In the rare case that an Effort Administrator is the responsible individual with suitable means of verification, appropriate supporting documentation, as noted above, must be maintained.
How do I certify an effort report that is not my own?
If one of the above conditions has been met, you will need to be set up as a delegate in order to certify the individual’s effort report. Please note that the first PI listed on a restricted sponsored account is automatically set up as a delegate for all individual’s paid or cost shared on the account. Please contact your Effort Reporting Administrator or Contracts & Grants Administration (email@example.com) if you need to be set up as a delegate for another individual’s effort report. Once you are set up as a delegate for the individual, you will have access to their effort report and will complete it based on how the individual actually spent their effort.
When I certify the ER, what am I agreeing to?
You are certifying that you spent at least as much effort as reported in the red box (under the % Effort Worked column) on that project for the period. Auditors sampling the accuracy of the ER will begin their review with the person that certified the ER.
Who should certify an ER for an employee who is paid from two departments?
The employee should personally certify the ER, unless the employee is a grad student, in which case one of the PIs for whom the student is working should certify the ER.
Should effort/work for which I received Health Service Related Component (HSRC) payment be included in the ER?
No. HSRC activities and payments are not guaranteed and therefore are not (currently) considered part of what MSU considers Institutional Base Salary (IBS). As a result, efforts and payment for HSRC activities should be excluded from the Effort report.
Should I use a 40 hour work week as a base for computing the effort percent to be reported?
Generally, no. You should calculate the effort percent based on the time it took to perform the duties for which you were paid. If, for example, an individual can fulfill his/her obligation to the University in a 40 hour work week, the ER needs to be completed, adding up to 100%, based on the distribution of those 40 hours. If an individual needs an 80 hour work week to fulfill his/her obligation, the ER needs to be completed, adding up to 100%, based on the distribution of those 80 hours. The federal government does not recognize the concept of donated effort if it is considered part of your university assignment. For example, a 100% federally paid faculty member cannot "donate" time to teach a class. Rather, the effort report must reasonable cover all of the duties that are expected of your position.
Can I count time spent writing proposals, serving on departmental committees, or teaching scheduled courses as effort on restricted accounts?
No. Per federal regulations (A-21 section J28), time spent writing new proposals is included in the overhead calculation and cannot be charged directly to federal projects. However, proposal efforts spent on non-competing renewals (for example, a 3 year award where each year’s award is released once a satisfactory progress report is completed) are allowed. Time spent serving on general departmental committees (chairman search, tenure review, etc.) is also considered overhead and therefore not chargeable directly to a federal project. Efforts devoted to scheduled instruction are not normally chargeable to federal projects unless that instruction is part of the deliverables for that project. While the concept of buying faculty time out of instruction to perform research is reasonable well understood, the proper way to process the paperwork is to charge the correct proportion of faculty time to the research project and then use the departmental salary savings to hire someone else to perform the instructional duties.
If I have a half time appointment, should the red boxes still total 100%?
Yes. The red boxes on all ERs should total 100% regardless of percent employment or percent of the period worked. If a person only worked two weeks of a semester, the red boxes should still total 100% (based on the distribution of those two weeks). Please feel free to add a note at the bottom of the ER, indicating the period worked, if appropriate.
How do I complete my effort report if I was on leave (ex. maternity, extended disability, sabbatical leave) during the effort period?
Maternity and Extended Disability Leave: If an employee’s salary was charged to a sponsored project before they went on leave (and the salary was in line with their effort), then the maternity and extended disability leave pay may continue to be charged to the sponsored project. However, cost share cannot be reported during the leave period. Complete the effort report based on what you expected your effort to be had you not gone on leave. Do not report any effort on cost sharing commitments. Please include a note on the effort report that you were on leave during the effort period and include the dates of your leave. You may also include a note that you were working on the projects listed on the effort report before you went on leave.
Sabbatical Leave: If you are paid on the sponsored project(s) and put forth effort while on sabbatical leave, you should report your effort spent on the project(s). Required federal cost share should not be reported on the effort report, however voluntary cost share may be reported. It is not necessary to include a note on your ER indicating you were on sabbatical leave.
If I was paid from more than one restricted project, should I complete the red box for each one?
Yes, and the total of all activity should add up to 100%. You should complete a separate red box for each restricted project, and one red box for the total of all other unsponsored accounts to which you committed effort. The effort for all accounts must total 100%.
What if I'm working on a restricted project that hasn't been assigned an account number yet?
Below the section of sponsored projects, search by APP, the application (e-transmittal) number, enter the APP number in the blank box to the right and select the APP in the drop down. Then click on the green box “Add Effort on a Sponsored Project Not Listed Above”. This will add the APP number and a red box to the sponsored project section of the effort report. Then fill out the % effort worked in the red box for that project.
The phrase "Total Unsponsored" appears near the bottom of some ERs. What does "Total Unsponsored" mean?
ERs are generated ONLY if you are paid or cost shared on a federal or State of MI account(s). For federal and State of MI accounts/projects we need to know - by account/project - how much time was spent on each project. Since federal regulations specify that the ER must account for total/100% of your effort, a residual group of account(s) must be included. For lack of a better phrase "Total Unsponsored" lists the pay from that group of account(s) that don't require ERs. The phrase appears on the ER when there are one or more non-ER accounts.
What if the title printed on the ER is not correct?
Please send an email to firstname.lastname@example.org with the correct title. The title listed is normally the same as the title on the eTransmittal from the original proposal.
What is cost sharing or match?
Cost sharing, sometimes referred to as match, is a commitment made in the proposal to put forth effort on a project but not to charge the project a like amount of salary. Cost sharing that is required by the funding agency is listed on the ER in the “Cost Sharing” Or “Target Effort” column. Please click on the percentage listed in the column to see whether the % is cost sharing or target effort.
Why does my effort report show cost sharing even though there is no cost sharing required for my project?
For principal investigator(s) and other key MSU personnel, granting agency officials want to know if there is a significant change in a project’s scope of work and/or if there is a 25% reduction in the time devoted to the project. The way MSU monitors this requirement is to setup a type of cost sharing called Total Effort. Total Effort is calculated such that when added to the percentage paid from the project equals what was committed to in the proposal/negotiated final approved budget. It is okay to report a lesser percentage of effort than is shown on the Effort Report, it just might lead to a notification to the agency about the change by the PI or those tagged as key personnel.
PI effort of 1% is also set up for sponsored RC accounts, It will show on the effort report under the "Cost sharing or Target Effort" column of the effort report if they are not paid on the RC account. Some agencies discourage cost sharing because they feel it provides a competitive advantage to large research organizations (like MSU). NSF is a prime example. In these cases it is still important to set up 1% cost sharing commitment, even though not required, so that the PI will be reminded of the commitment.
Should work for which I received overtime pay be included in the ER?
No. First, OT for faculty is extremely rare and must have agency prior approval. The time report/pay document will serve as the ER/certification for overtime payments.
How is it determined which department is responsible for ensuring the effort reports are certified by the deadline?
There are two ways to review the effort reports for which a department is responsible. Below “Effort Reporting” on the left side of CGA’s website, click on “Effort by Bookkeeping Unit”. Then select your department and this will populate the list of accounts requiring effort reports for which the selected department has bookkeeping rights. The participants listed for each account have pay or cost share on the account and therefore requires an effort report. Click on the names to view the effort reports.
Alternatively, below “Effort Reporting” on the left side of CGA’s website, click on “Effort by Home Unit”. Then select your department and this will populate the list of people whose “Org Unit” in SAP is the selected department and was paid or cost shared on a restricted account. Click on the names to view the effort reports.
After an individual has certified their effort, a message next to the individual’s name will appear on the above reports indicating the date the effort report was certified.
What if the total commitment as identified on the ER (”Total Commitment” column) and the way I spend my effort are different?
Complete the “% Effort Worked” column (red boxes) based upon how you actually spent your time. Please include any notes that might explain a shortage of effort on the sponsored account, i.e. Cost Redistribution, plans to make up the effort during the next period, etc. If the effort report is certified with a difference between the Total Commitment shown on the effort report and the % Effort Worked greater than 5 % points, your department administrator will be notified via email. From that point, you will have 14 days (and within the certification period for an effort reporting cycle) to make changes and recertify the ER, if the shortage of effort was reported in error. Click on the "recertify" button on the effort report to recertify. If the shortage of effort is appropriate, your department administrator will need to submit a cost redistribution in SAP to reduce the pay to equal the % effort worked. Effort in excess of pay will be shown as additional cost sharing.
How can I find out which payrolls are being used to generate the percentages listed on the ER?
Great question, please note that the payroll and cost sharing numbers on the ER are hyperlinked! That means you can click on them to drilldown to see which payrolls and cost sharing commitments have been included. This payroll information has been harvested out of the SAP system (not an easy task) and can provide you with a tool to verify salary and cost sharing commitments for your project. We have plans to include a salary report in the Account Explorer (AE) to show all salary charges to an account in this format.
What if the payroll information listed for the effort period is not correct?
First, complete the ER based upon how the effort was actually performed. Then, check with your business office so that they can process the necessary payroll adjustments to resolve the difference. When changes are necessary, please add a note on the effort report. Also, a cost redistribution in SAP will not be approved unless the proposed change is supported by the ER.
Which payroll periods are used to compute the pay percentages that are listed on the ER?
The dates for each type of employee are list in the upper right portion of the ER. For Academic and Annual Faculty and monthly paid employees (including summer pay) effort period 1 dates are: January 1 – June 30, and effort period 2 dates are July 1 – December 31
Grad Assistants and CTs: all full pay periods between January 1 – June 30; July 1 – December 31
How are the percentages (under the Academic/Annual Pay and Summer Pay columns) shown on the effort report calculated?
Click on the hyper-linked numbers to see the details!
For Annual (AN) appointments - To calculate the percentage paid on an account, divide the total account pay into the total pay on all accounts for the period. Total account pay can be found by clicking on the pay percentage listed for that account. Total pay on all accounts for the period can be found by clicking on the Total Academic/Annual or Summer pay percentages reported below the Total Unsponsored line of the ER.
For Academic (AY) appointments - To calculate the percentage paid on an account for the academic year, divide the total AY account pay by the total pay on all accounts for the period. To calculate the percentage paid on an account for summer, divide the total summer account pay by the total pay on all accounts for the period.
To calculate the total number of summer months paid on the effort report, divide the total summer pay for the effort period into the FTE monthly salary.
Why does one month of summer salary equate to 17% on my effort report?
If I divide one month (assuming it summer salary) by the 12 months that I get paid (assuming I receive the full 3 months of summer salary) doesn’t that equate to 8%? Yes, the math is correct, however the effort reporting period only covers 6 months, not the full (12 month) year. Since the effort reporting period is only 6 months, and if one of your summer months was spent all in one of the two effort reporting periods, then 1 month divided by 6 months equals 17%.
How do I convert work done for part of an effort period into percentages?
Divide the number of months worked on the project by the number of months in the effort period. Then, multiply that by the percentage of effort you spent on the project. For example, if you were paid for a full 6 months during the first effort reporting period (January 1 – June 30), you spent 50% of your time on a project until May 15, you would divide 4.5 months (1/1 – 5/15 equals 4.5 months) by the 6 month effort period, i.e. .75, and then multiply by .5 (50% effort) to equal 38% effort (37.5% rounded) for the Jan 1 – June 30 period.
For an AY employee, they may not be paid a full 6 months during the effort report period. Divide the number of months working on the project by the total number of months paid during the effort report period. Then multiply by the percent working on the project.
How do I convert work done for part of an effort period into percentages when the employment % changes within the period, for example 75% employed from 1/1 through 5/15 then 100% until 6/30?
First, calculate the effort period FTE work months (no longer 6 months). 4.5 months at 75% employment (1/1 – 5/15: 4.5*.75 = 3.375) plus 1.5 months at 100% employment (5/16 – 6/30: 1.5*1 = 1.5) = 4.875 FTE work months for the effort period. Second, calculate the effort period FTE project months. 4.5 months at 75% (1/1 – 5/15) times 50% effort on the project (3.375*.5) = 1.6875 FTE project months for the effort period. Last, divide the FTE project months by the FTE work months for the effort period. 1.6875 / 4.875 = 34.6% which rounds to 35%. (this is why the most important step to perform when you first receive notice of an award is to appoint the people to the project and let the system make the calculations!)
What is the NIH Salary Cap and how does it affect my effort report?
In 1990, Congress directed the National Institutes of Health to impose a salary cap that limits the rate of pay at which salaries can be directly charged to NIH sponsored projects. For awards made from January 1, 2010 until December 31, 2011, the salary cap is $199,700 for annual (12 month) appointments which equates to $163,390 for academic (9 month) appointments. In order to ensure compliance with this regulation, the percentage of total salary charged to an NIH account needs to be accompanied by companion cost sharing at a ratio that base salary exceeds the NIH cap. The formula is: X + X*(total MSU Sal / NIH Sal Cap - 1), where X is the percentage of salary charge to the NIH project.
For example, if a 12-month (AN) faculty member with a base MSU salary of $250,000 submitted a proposal and it was awarded and the PI planned to devote 50% of their effort to the NIH project, the award would have been made for $99,850 (50% * 199,700) plus fringes and F&A, and not $125,000 (50% * $250,000) because of the NIH salary cap. The Effort Report will show pay of 40% (99,850/250,000) plus companion cost sharing of 10% for a total commitment of 50%.
The potential problem arises if the Effort Report is not adjusted for the companion cost sharing. For example, if we simply showed the payroll percentage on the Effort Report, i.e. 40% and the PI only reported 40%, then the Effort Report would only support $79,880 in salary (40% * 199,700), instead of the $99,850 that was charged, i.e. a $19,970 potential disallowance.
Wasn’t that easy!
December Update: Congress, in their infinite wisdom, just passed legislation to reduce the NIH salary cap to $179,700 (and accordingly $134,775 for AY), a $20,000 reduction! We expect to have a clarifying notice from NIH in the near future.
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