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Time and Effort Reporting Policy

Document Type:                        Policy
Policy Number:                        1000-002
Origination Date:                       Fall 1996
Revision Date:                          February 9, 2006
Responsible Party:                   Vice President for Research
Originating Requirement:           Federal OMB Circular A-21
Additional Requirements:          UT System Guidance on Effort Reporting
                                              UT System Effort Reporting Education Program
                                              UT System Effort Reporting Principals


I.    Purpose:

This policy establishes institutional requirements for reporting payroll distribution activity on sponsored projects.  Compensation for personnel services is the largest expense charged to sponsored projects and effort reporting is a required process by the federal government to verify that direct charges for salary to federally sponsored projects are reasonable and reflect actual work performed.  The Office of Management and Budget (OMB) Circular A-21, “Cost Principles for Education Institutions”, Section J.8c(2) “After-the-fact Activity Records” describes the requirements UTA must follow in ensuring a compliant effort reporting system. 

Salary appointments are approved before or as services are actually performed.  UTA’s effort reporting system provides an “after-the-fact” confirmation that the salaries paid to individuals reasonably reflects the actual amount of effort expended on a project.  Faculty members who serve as Principal Investigators on sponsored projects are personally responsible for reviewing, and where appropriate, certifying the effort they and other employees spend on sponsored projects under their direction.

II.    Definitions:

Effort:     Effort is the percentage of time spent towards particular Work-Related Activities, such as sponsored projects, instruction, proposal preparation, or other administrative duties.  Effort is not based  on a 40-hour work week, but is calculated as a percentage based on the total hours spent on work-related duties.   For example, if a person averages 60 hours per week during a reporting period and spends an average of 15 hours on a Sponsored Project, that person has spent 25% effort on the sponsored project and 75% effort on other activities. 

Effort Report(s):    Effort Reports are the mechanism used to provide  a sponsoring agency with a reasonable assurance that salaries paid from a grant are appropriate and reflect a reasonable estimation of the time spent working on the project.

Committed Effort:  The total percent (%) of Effort committed to a sponsored project. It is the total of Contributed Effort (unpaid by the sponsor) and Effort proposed to be paid from the sponsoring agency.

Contributed Effort:  The percent (%) of Committed Effort that is contributed (to be paid and cost shared) by UT Arlington. 

Institutional Base Salary (IBS):  Annual compensation paid and guaranteed by UTA for an employee’s appointment, whether that individual’s time is spent on research, teaching, or other activities as defined in the employee’s appointment letter, contract, tenure code, or as established in the appointment process.  IBS excludes any income an employee earns for activities or duties outside of their compensated responsibilities to UTA.  Academic appointments are annualized to determine an IBS monthly rate for quantifying the Committed Effort in proposals.  IBS is the required basis for determining salary in proposal budgets. 

Total Effort:  For any given time period, the total appointed time in the DEFINE payroll system and totality of all Work-Related Activities paid is the Total Effort or 100% effort of the employee.  If an employee is only appointed at 80% time in the payroll system, this appointment or time constitutes that person’s 100% Total Effort.  The total number of hours worked does not affect Total Effort.  For example if a person worked 20 hours or 40 hours a week, either equates to 100% of their Total Effort

Work-Related Activities:  For the context of the Time and Effort Reporting Policy, Work-Related Activities are areas in which faculty time or Total Effort is spent and helps determine the allocation of financial information for determining the university’s Indirect Cost Rate with the Federal Government.  Activities typically include:  Research (sponsored projects), Instruction (teaching/instructing students), Administrative duties (Chair, Dean, Proposal Preparation etc.), and other activities (as assigned).  Only activities for which the employee is paid by the university to perform (as part of IBS) are considered “Work-Related Activities”.  Excluded from Work-Related Activities are fringe benefit payments, reimbursed expenses, temporary or supplemental compensation for incidental work, and any income earned outside of the duties to the institution.

Effort Training Program:   Every Principal Investigator committing effort to a sponsored program is expected to complete the Time and Effort Training module within the Profile System.  (www.uta.edu/expertise)

III.    Roles and Responsibilities:

Vice President for Research:  The VPR is responsible for the university’s compliance to the Time and Effort Reporting policy.  The centralized administrative offices for facilitating compliance with Time and Effort Reporting report to the VPR.

Office of Grant and Contract Services (GCS):  Is responsible for reviewing Committed Effort and IBS in proposal submissions.  GCS is the centralized steward for Effort Reporting.  GCS oversees payroll corrections or Cost Transfers as necessary, implements the training program and monitors compliance. 

Office of Grant and Contract Accounting (GCA):  GCA reviews and creates any necessary journal entries to correct payroll.

Principal Investigator/Project Director (PI/PD):  Is responsible for understanding the Time and Effort Policy, review and certification of Effort Reports for sponsored project under their direction, proposing salary costs at IBS in proposals, fulfilling Committed and Contributed Effort requirements, and the timely certification of Effort Reports.  Each PI/PD must verify that the report includes the names of all individuals who were paid from project funds; that the percent time listed on the report is accurate with variances during the month being reflected; and that the contributed time section is completed if the PI/PD or any staff spent time on the project while being paid from non-federal sources.  If, after reviewing the Effort Report, the PI/PD determines that corrections are needed to the actual payroll charges, these corrections must be made immediately and supported by retroactive appointment forms. The Personnel Appointment Form (PAF) should be sent to Human Resources. Copies should be sent to the Office of Grants and Contracts.

Directors, Chairs, Deans, Administrative Personnel, and Employee Supervisors:  Are responsible for reviewing and considering the reasonableness of their faculty or employee Committed Effort and Total Effort for proposals submitted.  The GCS Proposal Review and Certification Form (Blue Sheet) is the document signed by administrative personnel acknowledging and approving faculty and employee time and university resources committed to proposals.  Consideration for the allocation of Work-Related Activities should include course release/buy out, administrative duties etc., to ensure employees have reasonable time to fulfill their Committed Effort. 

IV.    Scope:

This policy applies to all individuals who have salaries or wages paid from or committed effort to externally or internally funded sponsored programs.
 
V.    Policy:

PI’s or person’s having firsthand knowledge of employee effort on sponsored programs must reasonably certify that effort paid from their grant funds was reasonably expended.  For determining “reasonableness”, OMB Circular A-21 states “In an academic setting, teaching, research, service and administration are often inextricably intermingled.  A precise assessment of factors that contribute to costs is not always feasible, nor is it expected.  Reliance, therefore, is placed on estimates in which a degree of tolerance is appropriate… The payroll distribution system will … (ii) reasonably reflect the activity for which the employee is compensated by the institution…”

Each PI or individual’s certified Effort may not exceed more than 100% and must be consistent with his/her duties as agreed with his/her supervisor.  This is accomplished as Committed Effort is considered during the proposal process in conjunction with the Blue Sheet and subsequently approved by respective chairs and deans for the effort being reasonable. 

Consideration for Minimum Level of Effort:
For Federal Research projects, there must be a minimum of 1% committed effort of any one key personnel time either paid or unpaid by the sponsor.  Equipment and instrumentation grants or dissertation grants do not require a minimum level of effort. 

Consideration for Maximum Level of Effort:
Consideration for maximum effort should be reasonably accounted for.  For example, any person who has administrative duties, instructional requirements, or office duties may not be charged 100% to sponsored projects as they must have some measurable amount of effort to account for these activities.  The maximum level of effort is 100%.

Cost Transfers:
Any changes to an effort certification form must be accompanied by a corresponding change to the payroll system to correct the expense.  The PI and their department should make corrections as soon as possible.

NIH (Sponsor) Salary Cap:

Sponsors, in particular the National Institutes of Health (NIH) may impose a cap on the reimbursement of salaries.  By law, NIH may not reimburse salaries under NIH awards at an annual rate that exceeds the cap (Currently NIH Salary Cap http://grants.nih.gov/grants/policy/salcap_summary.htm ). Sponsor imposed salary caps restrictions require additional consideration for the commitment and certification of effort for individual’s whose IBS exceeds the salary cap.  For example: 

Professor John Smith:
Actual Salary (Annual) 240,000 (% of Effort - 20%) 48,000
NIH Salary Cap (Annual) 196,700 (% of Effort - 20%) 39,340
Difference: 48,000 - 39,340 = 8,660 (Must be cost shared)
Difference / Actual Annual: 8,660 / 240,000 = 3.6%
NIH Salary Cap / Actual Annual: 39,340 / 240,000 = 16.4%

Salary Cap restrictions force an automatic situation of Contributed Effort (where Total Effort is split between Contributed Effort and effort allowed to be charged to the sponsor – under the salary cap).  The salary cap restriction requires consideration for Proposal Submission (tracking of cost share and Committed Effort) and Effort Reports. 

Criminal charges may be brought against any individual who certifies a falsified report.