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Effort Certification Associated with Personal Service Payments from Federal (and Federal Flow-Through) Grants / Contracts

Section II. Item 32.

Purpose

To set forth in writing NIU's responsibilities for ensuring the proper charging of labor costs to federally funded sponsored awards.

Reason For Policy

As a recipient of federal funding, NIU is required to comply with Federal regulations 2 CFR 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal awards ("Uniform Guidance"). NIU has an obligation to assure federal sponsors that the assignment of time and associated salary and fringe benefit costs to the project they support are fair, consistent, and timely.

Uniform Guidance 2 CFR 200.430 contains specific regulatory requirements for internal controls for documenting salary charges on sponsored awards. To comply with these requirements, NIU uses an after-the-fact verification process to confirm that all salaries charged to federally sponsored awards are reasonable and consistent with the work performed. These records must reasonably reflect the total activity for which the employee is compensated, including federally funded and other sponsored activities as well as non-sponsored activities, not exceeding 100%.

NIU's certification process provides the means for verifying that salaries and wages charged to the award are consistent with the employee's effort on the project. Severe penalties and funding disallowances can occur from inaccurate, incomplete, or untimely effort reporting.

Definitions

Effort: Actual amount of time spent by an employee on a sponsored project. Effort is expressed as a percentage of the total amount of time spent on all NIU work-related activities for which the employee is compensated. Effort is not defined in the context of a 40-hour workweek or any other standard workweek since the number of hours each week may vary. All effort must equal 100%.

Institutional Base Salary (IBS): The annual compensation set by the University (through an academic unit or administrative unit) for an employee's regular appointment, whether that employee's professional effort for the University is spent on research, teaching, outreach, administration, or other activities, and whether that employee is appointed full-time or part-time.

Sponsored Project: An externally funded activity that is separately budgeted and accounted for and governed by specific terms and conditions of the sponsoring organization. A sponsored program may be in the form of grants, contracts, or cooperative agreements for research, instruction, and public service activities.

Policy

All faculty, staff, and students wo receive pay from a federally sponsored award must verify the accuracy of their time (i.e., effort) per the procedures established by NIU. Effort for hourly employees is verified via their time sheets and effort for salaried employees is verfied via an Effort Statement.

The Effort Statement should be reviewed and signed by the person who has knowledge of the work performed on the project. This may be the individual, the Principal Investigator (PI), and/or a responsible university official(s).

For all faculty, as well as non-faculty who are serving as PI:

  • The Effort Statement must reasonably reflect the time for which the PI is compensated for all NIU activities. Therefore, a PI cannot typically certify 100% effort on sponsored projects unless they are on sabbatical from their teaching, outreach and administrative responsibilities and are devoting their time solely to working on the project.
  • Federal regulations recognize that teaching, research, and administration are often inextricably intermixed in an academic setting and a precise assessment of factors that contribute to costs is not always feasible, nor expected. A reasonable estimate (-/+5%) of how time was expended is generally acceptable for certification.
  • The PI and his/her department and college (unit/division if the PI is from a non-academic unit) have the responsibility to ensure that the salaries of all individuals paid from federally funded sponsored projects are verified in compliance with this policy.

Certification Procedures

Salary verifiction is done twice a year covering periods January 1 to June 30 and July 1 to December 31.

At the end of each period, Sponsored Programs Administration (SPA) prepares Effort Statements for all individuals who have been paid from federal funds during the verification period. These individuals are required to certify that the salaries and wages charged to an award accurately reflect the work performed on the project.

The following table shows the estimated distribution schedule for each verification period:

Effort Period Distribution* Collection**
January 1 thru June 30 Approx. Sept. 1 Approx. Oct. 1
July 1 thru December 31 Approx. Mar. 1 Approx. Apr. 1

Effort Statements

  • Each Effort Statement indicates the distribution of the employee's total compensation for the verification period across all NIU functions, including sponsored and non-sponsored work. Sponsored work lists each federally sponsored project for which an individual received compensation.
  • The sum of all sponsored and non-sponsored work must total 100%.
  • Individuals are generally expected to sign their own Effort Statements; however, the PI and/or other responsible university officials who have firsthand knowledge of the actual work performed on the project may also sign the Statement.
  • If an individual is no longer employed at NIU or is otherwise unavailable for signature at the time the statements are distributed, the employee's supervisor will certify the employee's Effort Statement using suitable means of verification, which includes but is not limited to: first-hand observations of the work being performed, written confirmation from the individual, physically verifiable information, notebooks, and/or sign-in sheets.
  • The signature on the Effort Statement is an endorsement by the individual that, to the best of his or her knowledge, the salary charges accurately reflect their work on the project(s) for which they are paid during the verification period.

Changes to Effort Statements during Certification

  • If the payroll distribution reflected on an Effort Statement does not accurately display how the employee spent his or her time the employee must contact SPA.
  • SPA will adjust salary charges accordingly where the actual project effort differs from the payroll distribution.
  • Salary charged to a sponsored project must never exceed the amount of actual effort devoted to that project.

Certification

  • All Effort Statements must be received by SPA by the verfication deadline. Report forms should be directed to Sponsored Projects Administration. Forms can either be hand delivered to SPA, 203 Lowden Hall, or scanned and submitted electronically to grantsfiscal@niu.edu. Never put Effort Statements in campus mail.
  • Once an Effort Statement form has been certified and accepted by SPA as final, no further changes will be allowed unless the Assistant Vice President for Research and Sponsored Programs approves an exception.
  • SPA may impose corrective action such as suspension of sponsored project accounts in the event of consistent failure to complete Effort Statements.
  • SPA processes Effort Statements and follows up as necessary with the PI's and department administrators to achieve 100% completion.

Timing

Effort Statements use all relevant HRS source data posted into the general ledger during the verification period, all PAY journals posted during the verification period, plus SPA initiated adjusting entries made in the beginning of the verification period, to support the Effort Statements. It is imperative that all entries made to adjust personnel activity charged to a grant happen in the actual verification period.

Impact to University

Departments need to make sure that salary charges are posted to grants in a timely manner, as well as ensure that salary adjustments are made in accordance with SPA's cost transfer policy.

Failure to ensure the accuracy of salary charges on sponsored awards can result in disallowed costs, fines, or suspension or loss of federal funding.

Approved by APPM Advisory Committee January 4, 2007
Modified February 27, 2017