Effort Reporting (II.C.1)

Volume II: Business and Finance
Chapter C: Payroll
Responsible Executive: Senior Vice President and Assistant Treasurer         
Responsible Office: Comptroller       
Date Issued: February 15, 2010
Date Last Revised: September 1, 2019

TABLE OF CONTENTS

Contacts
Statement of Policy
Reason for This Policy
Individuals and Entities Affected by This Policy
Exclusions
Responsibilities
Definitions (defined terms are capitalized throughout the document)
Related Documents, Forms and Tools
Website Address for This Policy
History and Updates
Appendix

CONTACTS

STATEMENT OF POLICY

In compliance with federal regulations, Purdue University has established Effort Reporting procedures, which document the Effort expended on Sponsored Projects. As a condition of receiving Sponsored Projects, the University must ensure salary percentages charged to a Sponsored Project are reasonable in relation to the Effort actually devoted to the project. The University provides this assurance by requiring periodic Effort Reports for each individual whose salary is charged to one or more Sponsored Projects during the Effort Reporting Period.

Principal Investigators (PIs) must track all Effort expended on Sponsored Projects. PIs must complete all required Effort Reporting and Certifications in accordance with the time frames outlined in this policy and communicate any significant changes in the level of Effort expended on Sponsored Projects to the department head and business office.

The percentage of an individual’s salary charged to a Sponsored Project may not exceed the percentage of the individual’s Effort expended on the project during an Effort Reporting Period. If the percentage of Effort expended on a Sponsored Project in a given Effort Reporting Period is less than the percentage of salary charged to the Sponsored Project during the same period, the salary charges must be reduced to reflect the actual effort.

Effort Reports must be completed for all individuals whose salaries are charged to Sponsored Projects or individuals who have committed Effort to a Sponsored Project in whole or in part.

This policy contains the basic reporting requirements for work on a Sponsored Project. The detailed cost accounting principles contained in 2 CFR Part 200.430 will control the allocation of costs under each Sponsored Project. Additionally, the specific terms and conditions of each Sponsored Project regarding cost allocation or reporting must be met.  

The Procedures for Documenting Effort on Sponsored Projects provide details for complying with this policy. Non-compliance with this policy and its supporting procedures may subject the responsible individuals and departments to disciplinary action in accordance with University procedures.

REASON FOR THIS POLICY

The purpose of this policy is to ensure that compensation and commitments in connection with Purdue University’s Sponsored Projects comply with federal regulations as defined in Office of Management and Budget (OMB) Uniform Guidance. Failure to comply with federal regulations regarding compensation and personnel services could jeopardize future Sponsored Projects and could result in penalties and damage to the University’s reputation and integrity.

INDIVIDUALS AND ENTITIES AFFECTED BY THIS POLICY

All units, faculty, staff and graduate students of Purdue University involved in the administration of or compensated for Effort toward a Sponsored Project are governed by this policy.

EXCLUSIONS

There are no exclusions to this policy.

RESPONSIBILITIES

Principal Investigators/Faculty

• Understand the principles of accurate Effort Reporting.
• Be aware of the level of Effort committed to a sponsor in relation to all other professional activities included in their Total University Effort.
• When appropriate, request sponsor approval for reductions in committed Effort greater than 25%.
• Ensure that only Effort expended on tasks that benefit individual Sponsored Projects is allocated or charged to those projects. Charges to Sponsored Projects may include reasonable amounts for activities contributing and intimately related to work under the Sponsored Project, such as delivering presentations about specific aspects of the project, writing reports and articles, participating in appropriate seminars, consulting with colleagues and graduate students, and attending meetings and conferences. Activities that do not benefit a Sponsored Project may never be allocated or charged to a Sponsored Project account. These include, but are not limited to, writing proposals for new (different) projects and general instructional activities.
• Certify their own Personnel Activity Report (PAR) and those of staff and students working on their Sponsored Project.
• Complete the Effort Report within 30 days from the time that the PAR is made available.
• Certify Effort during the Effort Reporting Period in which it is expended regardless of the period for which salary is budgeted. For example, academic year faculty receiving summer salary must ensure that the Effort was expended during the summer Effort Reporting Period for which they were funded.

Business Office Personnel

• Ensure that sponsor-imposed salary caps are calculated and appropriate salaries are recorded properly.
• Assist covered individuals with the completion of Personnel Activity Reports (PAR).
• Make any necessary adjustments in cost distribution in accordance with the University’s account management guidelines.
• Monitor all necessary PARs for each Effort Reporting Period, review them for completion and submit them to the Costing Office.
• Retain supporting documentation related to the salary and Effort distributions.

Sponsored Program Services Staff

• Review requests by faculty for reductions of Effort as required by sponsor terms and conditions.

Office of the Comptroller, Costing Staff

• Notify faculty and staff regarding the availability of Personnel Activity Reports (PAR) for each Effort Reporting Period.
• Monitor the Effort Reporting process.
• Respond to questions regarding Effort Reporting principles and/or process.
• Review PARs for compliance with this policy.
• Ensure that records of the PAR certifications are retained and able to be retrieved for account management and audit purposes.

DEFINITIONS

All defined terms are capitalized throughout the document. Additional defined terms may be found in the central Policy Glossary.

Effort
Work dedicated to and expended on a Sponsored Project by an individual.

Effort Certification and Certify Effort
Verification by the individual completing the PAR that the distribution of charges reflects a reasonable estimate of the work performed during the given Effort Reporting Period and that the percentage of Total University Effort expended on each Sponsored Project during the reporting period meets or exceeds the percentage of salary allocated to the project.

Effort Reporting
The process by which Purdue University documents the compensated Effort expended on Sponsored Projects during each Effort Reporting Period. In accordance with the Uniform Guidance, the University utilizes the after-the-fact activity records method. The PAR documents the Effort devoted to Sponsored Projects expressed as a percentage of Total University Effort regardless of the total number of hours worked during the Effort Reporting Period. Residual non-sponsored activities may be grouped within accounts reflective of those activities.

Effort Reporting Period
There are three reporting periods, as outlined below, that correspond approximately with the fall and spring semesters and the summer session. These periods vary slightly for individuals paid on a bi-weekly basis insofar as the beginning or end date corresponds with the nearest pay period date.

Fiscal-year employee reporting periods

• Fall: August 1 to December 31
• Spring: January 1 to May 31
• Summer: June 1 to July 31

Academic-year employee reporting periods

• Fall: See the definition of Fall Semester in the policy on Academic-Year Employment (VI.F.12)
• Spring: See the definition of Spring Semester in the policy on Academic-Year Employment (VI.F.12)
• Summer: First day of summer employment to the last day of summer employment.

Institutional Base Salary
The annual compensation paid by the University for an individual’s appointment, whether that individual’s time is spent on research, instruction, administration or other activities. Institutional Base Salary excludes any income that an individual earns outside of duties performed at the University. Unless there is prior approval by the federal awarding agency, salary charges to a federal award must not exceed the proportionate share of the Institutional Base Salary for the period during which the individual worked on the award.

Sponsored Project
An externally funded activity, either federal or non-federal, that is governed by specific terms and conditions and is separately budgeted and accounted for according to the terms of the sponsoring organization. Federal Sponsored Projects may include appropriations, grants, contracts and cooperative agreements for research, training, and other public service activities.

Total University Effort
The total professional activity for which an individual is compensated by Purdue University.

Salary Components considered Institutional Base Salary include:

• Regular pay (includes overtime pay and shift differential)
• Summer pay
• Administrative supplements

Salary Components not considered part of Institutional Base Salary:

• Overload payments
• Special merit pay or bonus awards
• Distinguished faculty supplements
• Additional pay
• Income from outside professional work (e.g., consulting and other approved outside activities)

Uniform Guidance
The Office of Management and Budget’s Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards. As it applies to this policy, specifically 2 CFR Part 200.430.

RELATED DOCUMENTS, FORMS AND TOOLS

• Cost Distribution/Effort Reporting
• Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards
• University Account Management Guidelines
• SEEMLESS online application for Personnel Activity Reports
• Cost Distribution/Effort Reporting resources
• SPS Handbook (PDF)

WEBSITE ADDRESS FOR THIS POLICY

www.purdue.edu/policies/business-finance/iic1.html

HISTORY AND UPDATES

September 1, 2019: Updated Contacts section, definitions of Effort Reporting Period and Total University Effort, and links in Related Documents, Forms and Tools section.

June 1, 2016: Contacts section updated.

April 11, 2016: Policy was put into the new template, and accordingly, the procedures were separated from the policy. Updates were made throughout to refer to the new Uniform Guidance and a definition for Institutional Base Salary was added.

November 18, 2011: Policy number changed to II.C.1 (formerly II.5.1) and website address updated.

January 1, 2011: Various edits were made to the interim policy as a result of stakeholder feedback. This policy supersedes Effort Reporting, Interim (II.5.1), dated February 15, 2010.

February 15, 2010: This policy is the first to formalize guidelines for Effort Reporting.

APPENDIX

There are no appendices to this policy.