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Business and Finance

Effort Reporting (II.C.1)

Volume II: Business and Finance
Chapter C: Payroll
Responsible Executive: Senior Vice President for Business Services and Assistant Treasurer
Responsible Office: Comptroller
Date Issued: February 15, 2010
Date Last Revised: November 18, 2011

TABLE OF CONTENTS

Statement of Policy
Reason for This Policy
Individuals and Entities Affected by This Policy
Who Should Know This Policy
Exclusions
Web Site Address for This Policy
Contacts
Definitions
Responsibilities
Procedures
Related Documents, Forms, and Tools
History and Updates
Appendix

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 timeframes 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 individualís salary charged to a Sponsored Project may not exceed the percentage of the individualís 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 220 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.

REASON FOR THIS POLICY

The purpose of this policy is to ensure that compensation and commitments in connection with Purdue Universityís Sponsored Projects comply with federal regulations as defined in Office of Management and Budget (OMB) Circular A-21, 2 CFR Part 220, Section J.10.

Failure to comply with federal regulations regarding Effort Reporting and Certification could jeopardize future Sponsored Projects and could result in penalties and damage to the Universityís 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 their Effort toward a Sponsored Project are governed by this policy.

WHO SHOULD KNOW THIS POLICY

President
Chancellors
Vice Presidents
Vice Chancellors
Vice Provosts
Deans/Directors
Department Heads/Chairs
Faculty
Principal Investigators
Graduate Students
Sponsored Program Services Staff
Business Office Staff

EXCLUSIONS

There are no exclusions to this policy.

WEB SITE ADDRESS FOR THIS POLICY

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

CONTACTS

Subject Contact Telephone E-mail/Web Address
Policy Clarification University Comptroller (765) 494-7536 www.purdue.edu/comptrlr/
Calumet Campus Questions Director, Sponsored Programs (219) 989-4131


Fort Wayne Campus Questions Associate Comptroller (260) 481-6325


North Central Campus Questions Associate Vice Chancellor for Business and Budget (219) 785-5404


West Lafayette Campus Questions Director, Sponsored Program Services (765) 494-1063 www.purdue.edu/sps/
Associate Comptroller/Costing Office (765) 494-7562 www.purdue.edu/account/

DEFINITIONS

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

Effort Certification and Certify Effort
Verification by the individual completing the Personnel Activity Report (PAR) form 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 OMB Circular A-21, the University utilizes the after-the-fact activity records method. The Personnel Activity Report (PAR) form 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. For nonexempt staff, a timecard is used for documentation instead of the PAR form.

Effort Reporting Period
There are three reporting periods to correspond with each academic semester. These periods are defined as follows:

Fall: September 1 to December 31
Spring: January 1 to April 30
Summer: May 1 to August 31

Sponsored Project
An externally funded activity that is governed by specific terms and conditions and is separately budgeted and accounted for according to the terms of the sponsoring organization. Sponsored Projects may include 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 Included:

  • Regular pay
  • Summer pay
  • Administrative supplements

Salary Components Excluded:

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

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 his or her Total University Effort.

When appropriate, request sponsor approval for changes 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. These activities should be allocated to departmental research and departmental instruction, respectively.

Identify and remedy situations where the salary allocated to a Sponsored Project is more than the actual percent of Effort devoted to the project.

Certify his or her own PAR form and those of staff and students working on his or her Sponsored Project.

Complete the Effort Report within 30 days from the time that the PAR form 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 PAR forms.

Make any necessary adjustments in cost distribution in accordance with the Universityís account management guidelines.

Collect all necessary PAR forms for each Effort Reporting Period, review them for completion, and forward 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 PAR forms for each Effort Reporting Period.

Monitor the Effort Reporting process.

Respond to questions regarding Effort Reporting principles and/or process.

Review PAR forms for compliance with this policy.

Retain original PAR forms.

PROCEDURES

Certification of Effort
Faculty members are required to Certify their own PAR forms. PIs are not to Certify Effort for other faculty working on their projects.

It is recommended that a PI Certify Effort of the project staff and/or students working on his or her Sponsored Projects. OMB Circular A-21 requires those Certifying Effort have a suitable means of verification that the Effort was expended. Therefore, at the PIís designation, a laboratory or project manager/director, using a suitable means of verification that the work was performed, may Certify the project staff memberís PAR form.

A department research administrator or business manager may not Certify Effort of project staff unless he or she has a written, after-the-fact confirmation from an individual having direct knowledge of the individualís Effort.

Knowingly certifying an inaccurate PAR form is a serious violation of University policy and may result in disciplinary action.

Timely Completion
PAR forms must be completed within 30 calendar days from the day that they become available.

Retroactive Payroll or Salary Changes
Salary charges may be made initially to Sponsored Project accounts on the basis of estimates of Effort made before services are performed. When such estimates are used, significant changes in the corresponding work activity must be identified and entered into the payroll distribution system. If a payroll allocation to a Sponsored Project during an Effort Reporting Period exceeds the percentage of Total University Effort certified on the project at the end of the period, the payroll allocation must be reduced to reflect the level of Effort actually expended based on the PAR form.

Payroll allocations and Effort allocations may not always be identical; for example, in the case of cost sharing, Effort may be allocated to a Sponsored Project account while salary is allocated to a university general fund account.

Charges for work performed on Sponsored Projects by faculty and staff members during the year will be based on the individual faculty and staff members?regular compensation for the continuous period.

Consequences for Policy Violations
Non-compliance with the Effort Reporting procedures set forth in this policy may subject the responsible individuals and departments to disciplinary action in accordance with university policies and procedures.
Failure to properly Certify and return PAR forms as required by this policy may result in salary costs being charged to a departmental account, rather than to the Sponsored Project.

Sponsored Program Services may exclude non-compliant PIs from new Sponsored Project proposals until the PIís PAR forms are properly completed and certified.

RELATED DOCUMENTS, FORMS, AND TOOLS

HISTORY AND UPDATES

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.