Revisions to UNH Effort Certification Policy - 2011

Revisions to UNH Effort Certification Policy - 2011

Description of Policy Changes

Revisions to the UNH policy on effort certification were accepted by President Huddleston in March 2011.


The revised policy is entitled “Proposing, Managing, and Certifying Effort for Employees Engaged in Externally Sponsored Programs.”


The revised policy can be accessed at: http://www.usnh.edu/olpm/UNH/VIII.Res/S.htm.

The revisions were undertaken following a review of UNH’s effort reporting policies and practices by the Huron Consulting Group and an audit of UNH’s payroll distribution system by USNH Internal Audit. A set of committees was established to work through the recommendations resulting from the reviews and the revised policy is the product of the committees’ extensive and comprehensive efforts.


The federal government requires an effort report for each individual who has agreed to contribute to a federally sponsored program in exchange for compensation. To maintain consistency, UNH policy requires effort certification for all externally sponsored programs (not only funding that is federally sourced). An effort reporting system must provide records on how individuals participating in sponsored projects actually spend their time. It’s incumbent upon institutions receiving federal funding to maintain accurate and auditable effort certification systems and records; failure to do so can be cause for institutional or individual disallowances, which can result in serious financial penalties for institutions. In addition, criminal charges may be brought against individuals certifying to falsified effort.


In recent years federal auditors have increased scrutiny of effort reporting, and a number of major research universities have paid multimillion dollar settlements due to effort reporting problems: Northwestern University settled for $5.5 million a False Claims Act suit brought by a former employee and the US Justice Department alleging the university had failed to comply with effort reporting requirements; Johns Hopkins University and an associated hospital agreed to pay $2.6 million to settle a False Claims Act lawsuit which alleged that researchers had overstated the amount of time they were spending on research projects financed by the federal government; Harvard University agreed to pay the federal government $3.3 million to settle claims that it had overbilled the National Institute of Health for work done on several research and training grants.


The requirement for an effort certification system is based on the federal Office of Management and Budget’s (OMB) Circular A-21 “Cost Principles for Educational Institutions.” Circular A-21 defines what costs are allowable and allocable to federal grants and other “assistance” agreements. Section J.8 of A-21 sets forth criteria for acceptable methods of charging salaries and wages to federally sponsored projects. It requires a payroll distribution system that directly charges salaries to appropriate projects and an accompanying mechanism to confirm how individuals actually expend effort during periods in which they are compensated by sponsored programs.


Effort certification is not just a verification of the salary or payroll distribution: confirmation of payroll distribution and certification of effort are not the same thing. Payroll records show the distribution of an individual's salary charges, while effort reports describe the allocation of an individual's actual time and effort spent on specific projects.


The significant changes to the UNH effort certification policy are highlighted below:


Enhanced definitions:


1.3.4 Total University Effort:
• TUE is defined as all work performed on behalf of UNH, regardless of where or when performed. Weekend and evening work on behalf of UNH is considered part of TUE. The policy includes a chart on activities allowable as direct charges on sponsored programs.


1.3.3 De minimis Effort:
• Infrequent, irregular activity normally considered “so small” that it cannot and should not be accounted for. Activities can be considered de minimis if in the aggregate they constitute less than 1 percent of the individuals TUE.


Enhanced policy statements:


3.2.3 Maximum Allowed Regular Pay from Externally-Sponsored Programs:
• Activities that do not directly benefit a sponsored project may not be charged directly to the sponsored project – these normally “unallowable” activities include proposal preparation unless otherwise specified by the sponsor.
• With the understanding that grants may only be charged for effort that directly benefits the project, an employee’s pay may be charged to externally-sponsored programs up to 95% of regular pay (as long as the employee is devoting the corresponding percent effort to the projects).
• For employees who will contribute 100% effort to sponsored projects, an exception may be requested from the SVPR (see /research/effort-reporting-and-certification-0).

3.3 Summer Pay and Effort for Faculty with an Academic Year Appointment:
• A request for summer salary on one or more sponsored projects indicates a commitment to expend corresponding effort on those projects during the summer, i.e., summer salary from sponsored projects must not pay for summer activities unrelated to the sponsored project (e.g., teaching, proposal writing). Some grants include funds to support teaching and advising and therefore are exceptions.
• Pay from sponsored projects may not be received during the summer period to pay for work performed during the academic year.
• While personal time off may be taken during the summer, it is not appropriate to concentrate significant time off when receiving 3 months summer salary.


3.4 Post-Award: Revising and Monitoring Effort and/or Salary Commitments on Sponsored Awards:
• It is the PI’s responsibility to monitor his/her salary charges and that of his/her staff to ensure that salary distribution reflects effort distribution and to promptly communicate changes to the BSC.


3.5 Certifying Effort:
• Each UNH employee with pay charged to a sponsored program must certify his/her effort. Departments that maintain other effort certification systems that comply with the UNH effort reporting policy may rely on these departmental effort certification systems and employees of these departments may not need to certify effort during the general UNH annual certification process.
• Faculty members must certify for their graduate assistants. When an individual certifies for someone else, he/she must have “suitable means of verification” regarding how the employee spent their time.
• Annual certifications must be submitted to Sponsored Programs Administration by September 30 of each year.


3.6 Training:
• Each PI and any employee who receives pay from a sponsored program must complete the very brief effort certification training module (see /research/effort-reporting-and-certification-policy-training). Students and non-permanent employees who receive a one-time payment from a sponsored program are exempt from this requirement.


3.7 Consequences of Non-Compliance:
• If a PI does not complete the training, SPA will not set up the PI’s next award until such time as the training has been completed.
• If a PI does not submit his/her effort certification, SPA will neither establish new awards nor submit proposals until the certification is completed and submitted.

August 2011

Contact Information

Sponsored Programs Financial Management
Service Bldg., 2nd Floor
51 College Road
Durham, NH 03824

David Browning, Manager

603-862-0609
david.browning@unh.edu

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