Effort Training Part II Issues and Concerns

1. Effort Training Part IIIssues and Concerns Office of Sponsored Programs July, 2011

2. Proposed vs. Actual Effort

3. Understanding Effort Commitments • Made at proposal time • Binding at award time • Effort reports get values from budgeted amount in project team page • Commitments are based on a budget year for the award • Flexibility in cost-shared vs. direct-charged • Flexibility in academic vs. summer time

4. Problem: Insufficient effort

5. Untimely Completion of Reports • UD policy allows 50 days for completion Reports released 10 days after period ends. Reports due 60 days after period ends. • Late reports are a violation of UD policy • Audit risk • Dunning letters escalate as time passes • Risk because memory fails after time • Mismanagement of sponsored funds

6. 90-day JVs NIH Grants Policy Statement (NIHGPS): “Cost transfers to NIH grants by grantees, consortium participants, or contractors under grants that represent corrections of clerical or bookkeeping errors should be accomplished within90 days of when the error was discovered. The transfers must be supported by documentation that fully explains how the error occurred and a certification of the correctness of the new charge by a responsible organizational official of the grantee, consortium participant, or contractor. An explanation merely stating that the transfer was made “to correct error” or “to transfer to correct project” is not sufficient. Transfers of costs from one project to another or from one competitive segment to the next solely to cover cost overruns are not allowable.”

7. Why are 90-day JVs problematic overall? • Sponsor trust is compromised • Sponsors question our ability to manage funds • Improper invoicing • Salary transfers require recertification of effort • Salary that has to come off a project doesn’t mean it is then transferred to another award. May require cost-sharing of effort. • Audit findings – A-133, sponsor audits, and any federal audit where UD may be a subrecipient

8. 90-day JV Liabilities • Makes our institution look as if we are not practicing sound financial processes • Sponsors may question our overall stewardship of funds • “Monthly review of award activity along with consultation with PI is recommended to promote UD's established guidelines for responsible stewardship of funds.”

9. JVs Between Sponsors • UD’s Cost Transfer Policy 6-18 states that cost transfers must normally be made within 90 days of the incurred expense and in order to maintain consistency in the treatment of cost transfers, UD applies this policy to all federal and non-federal projects.

10. Effort Revisions/ Recertifications • Revisions to active reports vs. complete reports Reallocations in active reports are acceptable when needed. Reports must not be completed before reallocations are complete. • Accounting changes  vs. Effort revisions (really) Accounting changes do not create changes in effort (ex: a change of account or moving effort to cost-share). Effort revisions (ex: project changes) require thorough explanation & should be rare.

11. Effort Revisions/ Recertifications • Revisions to active reports vs. complete reports  • Accounting changes  vs. Effort revisions (really) • Effort revisions • Admission of guilt • “Knowingly certifying a false effort report is a violation of University policy and could potentially result in civil or criminal penalties for fraud.” • Requires detailed explanation from employee • Request may be denied • May result in expense to department

12. Problems with 100% sponsored funding* • UD Policy 6-5 • “Non-sponsored funding must be used to support the following effort unless the award documentation clearly allows them: instruction, course development, and advisement of students if not for a specific research award, administrative assignments such as department chair or dean, writing of grant proposals unless for a non-competitive renewal, service on committees or review boards or as a primary journal editor, review of peer manuscripts, fundraising, and lobbying. Since most faculty members participate in activities such as these, it should be extremely rare for any faculty member to be 100% grant-funded” • *Means NO time was spent on non-sponsored activities

13. Charging Salary when Effort is not performed • An individual’s salary may only be charged to an award if their work is directly benefiting that award. • Salary may only be charged during the time period in which effort is provided. • Work benefiting multiple awards must be charged to each award in the proportion to which it applies. • Sponsored projects must not be used as clearing accounts.

14. Overlapping Effort • Overlap, whether scientific, budgetary, or commitment of an individual's effort greater than 100 percent, is not permitted. The goals in identifying and eliminating overlap are to ensure that sufficient and appropriate levels of effort are committed to the project; that there is no duplication of funding for scientific aims, specific budgetary items, or an individual's level of effort; and only funds necessary to the conduct of the approved project are included in the award. Budgetary overlap occurs when duplicate or equivalent budgetary items (e.g., equipment, salary) are requested in an application but are already provided for by another source.

15. http://www.udel.edu/research

16. Case Study in Commitments UD receives an award from NSF in which Prof. X was listed as key personnel with an effort commitment of 5%. The award consists of 3 12-month budget periods, with a start date of 9/1/11. Q1: Which statement is most correct? 1. Her effort over the life of the grant must be at least 5%. 2. Her effort must average 5% in each budget period. 3. All effort reports must show 5% while the grant is active.

17. Case Study in Commitments UD receives an award from NSF in which Prof. X was listed as key personnel with an effort commitment of 5%. The award consists of 3 12-month budget periods, with a start date of 9/1/11. Q1: Which statement is most correct? 1. Her effort over the life of the grant must be at least 5%. 2. Her effort must average 5% in each budget period. 3. All effort reports must show 5% while the grant is active.

18. Case Study in Change of Personnel UD receives an award from NSF in which Prof. X was listed as key personnel with an effort commitment of 5%. The award consists of 3 12-month budget periods, with a start date of 9/1/11. After the grant is awarded, Prof. Y actually performs the work planned for Prof. X. Q2: Which statements are correct? 1. Prof. X’s salary may still be charged to the grant 2. The lead PI must approve this change. 3. Prior approval is needed from the sponsor

19. Case Study in Change of Personnel UD receives an award from NSF in which Prof. X was listed as key personnel with an effort commitment of 5%. The award consists of 3 12-month budget periods, with a start date of 9/1/11. After the grant is awarded, Prof. Y actually performs the work planned for Prof. X. Q2: Which statements are correct? 1. Prof. X’s salary may still be charged to the grant (NO!) 2. The lead PI must approve this change. (Yes) 3. Prior approval is needed from the sponsor (Yes)

20. Case Studies in Effort Revisions Example #1: Grad student, John, is paid 100% from a single award. He certifies his effort report and the effort admin completes the report. Next week, effort admin requests a revision in order to reallocate his last month’s salary to a new award. The award started last month, but the project was only recently assigned. Problems: 1. John already agreed that he spent 100% of his time on the 1st award & did not acknowledge any (16%) work on a new project. 2. The first award was knowingly overcharged. Appropriate solution: Transfer last month’s pay from award to discretionary funding source.

21. Case Studies in Effort Revisions Example #2: Grad student, John, is paid 100% from a single award. He certifies his effort report and it is completed. When the award is being closed, it is found to be overspent and John’s salary is the only expense that can be removed. Appropriate solution: Request an effort revision so that the overexpenditure can be reallocated from a direct charge to cost-share. Inappropriate: Request a revision so that pay can be reallocated to another award on which John was working at the time.

22. Review True or False? • On a given effort report, the amount “committed” must always be met. • Effort commitments which are not listed in the budget are not binding. • Effort commitments can typically be reduced up to 25% without prior approval. • A change in scope requires prior approval.

23. Review Answers • Q: On a given effort report, the amount “committed” must always be met? A: Not usually necessary on every report because most budget years are covered by more than 1 report. • Q: Effort commitments which are not listed in the budget are not binding.A: Commitments quantified anywhere in the proposal are binding. • Q: Effort commitments can typically be reduced up to 25% without prior approval.A: True under expanded authority. • Q: A change in scope requires prior approval.A: Always true.

24. Review True or False? • It doesn’t matter which grad student’s salary is charged as long as someone is working on it. • Faculty can get summer salary for work done during the AY. • If a new project is pending, it’s OK to keep charging the old temporarily. • Division of salary allocations must equate to % of effort.

25. Review Answers • Q: It doesn’t matter which grad student’s salary is charged as long as someone is working on it.A: False, effort is only allocable to a project for the individual who is working there. • Q: Faculty can get summer salary for work done during the AY.A: False, effort must be reported/paid in the same period in which it is performed/earned. • Q: If a new project is pending, it’s OK to keep charging the old temporarily.A: False, this would be misuse of funding. Use a clearing account instead. • Q: Division of salary allocations must equate to % of effort actually provided.A: True, when salary/effort is charged to multiple projects, it must be distributed among them in proportion to the % of effort provided to each project.

26. Review True or False? • UD Policy allows 90 days for completion of reports. • If a PI has a grad student whose work is related to any of 3 different awards, it doesn’t matter which one covers his pay. • Delayed certifications are less reliable. • A 100% grant-funded employee may spend minimal time writing proposals for new funding.

27. Review True or False? • When new effort reports are created, you have 90 days to make adjustments via JV. • Revised effort reports over-write previously completed versions. • A request for a revised effort report will be granted if requested prior to the due date for that effort period.

28. Review Answers • Q: When new effort reports are created, you have 90 days to make adjustments via JV.A: False, you only have a 50 day window before the reports are due to be completed, & JVs must be done before the report is complete. • Q: Revised effort reports over-write previously completed versions.A: False, a completed report cannot be changed. Revisions are a 2nd version. • Q: A request for a revised effort report will be granted if requested prior to the due date for that effort period.A: Not necessarily. Once a report is completed, a revision might not be approved, even if the due date has not been reached.