Towson, Md. (September 14, 2011): What is effort reporting? Simply put, it is the federally-mandated procedure by which the salaries charged to sponsored projects are certified as being reasonable in relation to the effort expended in meeting all goals of those projects. Effort is any and all time that an investigator puts into a project, regardless of whether or not the sponsor is paying the investigator’s salary.
Effort reports comprise one of the primary auditable documents that support a sponsored project’s salary costs. In recent years, the federal government and its auditors have become increasingly diligent in their review of effort reporting requirements. As a result of audit findings, several universities have incurred penalties entailing the loss of millions of dollars per institution. As indicated by the Society of Research Administrators at its 2010 conference, Harvard University had to pay $3,250,000 in settlements to the Department of Justice over multiple noncompliance issues that included the failure of appointed researchers to meet their 75% effort commitments, and multiple discrepancies in the reported salaries of researchers and a principal investigator. The imposition of fines and penalties is but one result of noncompliance. Other potential consequences for an institution may include settlement costs or damages arising from actions under the Federal and State False Claims Act, the loss of funding and draw down privileges for future research activity, and damage to institutional reputation. A project’s principal investigator may be personally penalized by debarment, suspension, or criminal and/or civil sanctions.
Towson University is very sensitive to the importance of effort reporting. When you are asked to certify your time, it is because the University has an obligation to the Federal government – to the taxpayers – to properly use federal funds for the conduct of research and other sponsored activities. A few important points to keep in mind:
· The effort expended on a project must meet the commitment made in the approved proposal for that project.
· As previously stated, “effort” means all of the effort put into a project. If an investigator is working on a project, it is the institution’s responsibility to properly report the effort. Time put into a project that is not paid for by the sponsor is a cost share on the institution’s part and must be documented as such.
· A reduction in level of effort on a sponsored project of 25% or more generally requires the sponsor’s prior approval. Likewise, if a project requires more time than offered in the approved proposal, the investigator should contact the Office of Sponsored Programs & Research to discuss required approvals.
· It is vital that the individual approving effort reports have actual knowledge of the effort expended on the project.
· Effort has nothing to do with hours; it is the percentage of a faculty member’s time expended on a project. All effort on all activities cannot exceed 100%.
The Office of Sponsored Programs & Research (OSPR) carefully reviews all proposals for effort commitment; many times, a proposal narrative will commit effort not quantified in the budget. It is the OSPR’ responsibility to ensure that budget match proposals and that all university signatories are aware of actual time commitments at the time of proposal approval.
The guidelines governing effort reporting for colleges and universities can be found in the Office of Management and Budget (OMB) Circular A-21, Cost Principles for Educational Institutions, section J.10. The Office of Sponsored Programs & Research is always available to provide guidance and clarification on any aspects of the effort reporting process.
Office of Sponsored Programs & Research