1. What is time and effort reporting?

2. Why should USF be concerned about time and effort reporting?

3. How does USF prevent such problems from occurring here?

1. Cost Sharing for Federal Grants

2. Effort Reporting for Federal Grants

USF Policy on Time and Effort Reporting for
Federally Sponsored Projects

Approved by USF Provost’s Council April 2, 2004

What is time and effort reporting?

    Time and effort reporting is a Federal requirement (OMB A-21. Section J(8)) to ensure that individuals confirm “after-the-fact” any effort they have expended on federally funded activities. The reports are used in the audit process, to ensure compliance with the level of effort specified in the award document, and/or to document any cost sharing effort.

    All individuals paid from either Federal or Federal Flow-through funds must complete a time and effort report supplied by Business and Finance (B&F) each academic term (fall, spring, and summer).  Personnel that have received compensation from federal sources must certify that they have expended effort on the federally funded project, at a minimum, in the same percentage amount that they have been paid or have agreed to cost share.

    In addition to fulfilling audit and compliance requirements of federal granting agencies, time and effort reporting is provided to the university’s public accounting firm and is subject to OBM Circular A-133[1]. Eventually time and effort reports will be used to calculate the faculty effort cost sharing included in the Facilities and Administrative (indirect cost) proposal for the University.[2]

Why should USF be concerned about time and effort reporting?

     If the amount of time a faculty or staff member charges directly to a federal grant is overestimated, the federal government pays us more than it should and this constitutes a “false claim.” The False Claims Act imposes liability for treble damages against anyone who knowingly submits a false statement to the government in an effort to obtain federal funds.

     If the time of a faculty or staff member is “cost-shared” on a federally funded project, these matching funds become an obligation for USF, and failure to accurately track and provide this cost-share can result in loss of funding and jeopardize the amount of external funds USF is eligible to receive for the project.

    Two recent stories in The Chronicle of Higher Education illustrate the problems that can arise from inaccurate time and effort reporting given the current audit climate for institutions of higher education:

The Johns Hopkins University agreed to pay $2.6-million to settle claims that scientists there had overstated the amount of time they were spending on medical-research projects financed by the federal government.  The university agreed that its researchers had promised the government they would spend a greater percentage of their time working on particular clinical-research projects than they actually did. (The Chronicle of Higher Education, March 2, 2004.)

The U.S. Department of Energy is withholding $7-million from an environmental-research center at Florida International University after an audit raised questions about past spending there. The federal government is examining $28-million in grants given to the university's Hemispheric Center for Environmental Technology from 1993 to 2000 for research on cleaning up nuclear waste. The expenditures that auditors are studying closely concerned both travel and how some researchers accounted for splitting their time among different endeavors. (Chronicle of Higher Education, March 16, 2004.)
 

Quick Overview of Things Project Directors
Should Know about Cost Sharing and Effort Reporting

Cost Sharing for Federal Grants

If USF offers cost sharing in a proposal to a Federal agency and the proposal is funded, even if cost sharing was not mandatory, USF is obligated to provide the cost sharing described in the proposal if the award is accepted.

If a Federal agency makes an award but reduces the amount of funding support that was requested in the proposal, USF may renegotiate its cost share before accepting the award.

Evidence of USF cost sharing on Federal projects must be tracked for the USF auditors and the Federal government.

If a third party offers cost share in a USF proposal to the federal government, USF is responsible for the third party’s cost share and must demonstrate this cost share to the USF auditors and the Federal government.

Any Dean or VP that approves the submission of a proposal that includes cost share from their college/unit or third party participant is responsible for providing this cost share and assisting B&F in tracking it.

Research projects must include some contribution of faculty time.  For other types of projects, it is better not to offer cost sharing unless it is mandatory.

Only certain types of costs are allowable for cost sharing.

Project Directors/Principal Investigators are responsible for assisting their College/Unit to track cost sharing for B&F

Please click here for The Perils of Voluntary Cost Sharing

Effort Reporting for Federal Grants

Faculty/staff cumulative time commitments on proposals can sometimes exceed 100% because not every proposal is funded.

Faculty/staff effort on funded projects and USF duties may never exceed 100%.

Faculty/staff effort on Federal projects may be charged to the project or cost-shared.

False claims for charges to the Federal government can result in treble damages against USF.

Insufficient cost share after accepting an award can result in loss of funds from the funding agency.

Effort reporting is required to track the time commitment of all persons paid from Federal or Federal flow through funds.

Faculty/staff effort for cost sharing also must be tracked.

Effort reporting at USF is done “after the fact” every semester.

The following must be reported to the Federal government during a federal project period:

Significant faculty/staff absenteeism
            Faculty/staff withdrawal from project
            A significant reduction (25%) in faculty/staff time

For example, if the proposed effort on the project is 25% and the personnel can only commit to 18% actual effort, a 28% (7% divided by 25%) reduction of effort has occurred and therefore requires prior approval from the funding agency.

Faculty and staff that serve as Project Director or Principal Investigators of a Federal project at USF must certify their own effort- reporting forms and those of other personnel on the grant.

Faculty and staff that devote more than 25% cumulative effort on sponsored projects also must have their Dean/VP review and cosign their effort report each semester.

The University of San Francisco
Cost Sharing Policy

DEFINITION:

Cost sharing is defined as all contributions, including cash and third party in-kind project or program costs, which are not supported by the sponsoring agency. The term “Matching Funds” refers to a specific kind of cost sharing known as “Mandatory Cost Sharing” that must be provided to be eligible for an award. 

Cost sharing can take the form of:

•    Personnel time contributed by individuals employed under a continuing contract by USF

•   Funds designated for non-personnel costs (e.g., supplies, travel, contractual services, and equipment purchases) from a USF account

•    Contributions of personnel time or other allowable costs from third parties

•     Waivers of the University’s Facilities and Administrative costs (F&A)

Facilities and administrative costs are also known as indirect or overhead and can be waived or reduced to provide cost sharing when allowed by the federal agency and then only with the approval of the Associate Provost/VPPB.[1]

In order to qualify as USF cost sharing, the cost must:

•  Not already be committed and not be paid for by the federal government under another sponsored award (except where authorized under federal statute to be used for cost sharing)

•    Be directly identifiable with the project or program (not used for another purpose).

•    Represent costs incurred during the period of performance of the award (not something already purchased).

•   Be allowable under the guidelines of the OMB Circular A-21 entitled, "Cost Principles for Educational Institutions." (A list of unallowable costs is presented in Table 1.)[2]

•     Be verifiable from the University's official records

•  Be necessary and reasonable for proper and efficient accomplishment of project or program objectives

•   Be provided for in the approved budget when required by the Federal awarding agency

•    Conform to Circulars A-110[3] and A-133[4] as applicable.

Types of Sharing Cost

There are three types of cost sharing, but only two types are applicable at the initial proposal stage[1]:

Mandatory cost sharing must be tracked and reported in the final financial report for the award.  Voluntary committed cost sharing also needs to be tracked and becomes part of USF’s F&A calculations.

To Cost Share or Not To Cost Share

    When an award results from a proposal submitted to a federal agency with mandatory or voluntary committed cost sharing, the cost sharing commitments become a condition of the award, and therefore, obligatory.  Both mandatory and voluntary committed cost share expenditures must be documented and auditable within the University of San Francisco’s financial system.

    Voluntary committed cost sharing on federal proposals should not affect the evaluation of the scientific merit of the proposal. Given that voluntary cost sharing becomes obligatory if an award is made, the University of San Francisco discourages commitments of voluntary cost sharing. 

    However, most federally funded research programs are expected to show some level of committed faculty effort, paid or unpaid by the federal government.  This effort can take place at any time during the fiscal year (summer months, academic year, or both).  The decision to cost share a faculty member’s time and how much time to cost share should be evaluated against what is necessary for the success of the research and the faculty member’s commitments to USF as well as other sponsored projects.  Principal Investigators should work with their Dean/VP to determine an appropriate amount of time and effort to contribute to their research project/s.

    The percentage of time to be contributed must be reasonable in view of the individual's commitments to other extramural funded research projects and the terms of their appointment. Total effort expended on sponsored projects and University-related duties may not exceed 100 percent.

USF Contributions

    Any mandatory or voluntary committed cost sharing by USF must be described by type and source of cost share on the Proposal Routing Form.  Cost sharing that involves something other than personnel time should be used only if there is a way to track and verify these costs from University records and data. The signature of the Dean or VP indicates their commitment to providing this amount and type of cost share should the proposal be funded.  By signing the Proposal Review Form, each party accepts their responsibilities (see below) and approves their cost share commitments.

    Third-party commitments must be described in a letter from the third-party signed by an authorized individual or official and received by the Office of Sponsored Projects prior to the submission of the proposal.  When an award is received, the proposed University cost share (including any third-party cost share) becomes a University obligation.

    If the amount of the award differs substantially from the amount of funding requested in the proposal.  The University may then reassess its commitment to the project, adjust its cost share accordingly, and request an amendment of the original award conditions from the funding agency.

Third Party Contributions

    Volunteer services furnished by professional and technical personnel, consultants, and other skilled and unskilled labor may be counted as cost sharing or matching if the service is an integral and necessary part of an approved project or program. The pay rate for volunteer services needs to be consistent with the rate paid for similar work at USF. In cases in which an appropriate rate of pay has not been established at USF, the rate of pay for volunteers should be commensurate with that paid for similar work in the labor market. Fringe benefits that are reasonable, allowable, and allocable may also be included in the valuation.

    When an employer other than USF furnishes the services of an employee, these services shall be valued at the employee's regular rate of pay (plus an amount of fringe benefits that are reasonable, allowable, and allocable, but exclusive of overhead costs), if these services are in the same skill for which the employee is normally paid. Third-party contributions of costs other than personnel time must be allowable costs, i.e. something one could purchase with federal funds. 

Responsibilities: 

Principal Investigators or Project Directors are responsible for:

Proposal Stage

1)      Securing the approval signature on the Proposal Routing Form from the Dean/VP of any and all administrative units providing cost sharing on the proposed project

2)      Providing an official letter of commitment from any Third-party contributing cost share on the proposed project to the Office of Sponsored Projects prior to the date of submission

Post Award Stage

1)      Maintaining all necessary records needed to explain and demonstrate fulfillment of their project/s cost sharing commitments

2)      Identifying and documenting USF’s obligated cost share by completing a Cost Sharing Contribution Report, in coordination with the Business Affairs Manager of their College, School, or Unit each semester; non-personnel cost shared amounts must be verifiable through the University’s Financial Records System (FRS)

3)      Obtaining documentation of any Third-Party cost share and submitting this documentation along with each Cost Sharing Contribution Report to the Office of Business and Finance

College, School, or Unit Business Affairs Manager is responsible for:

Proposal Stage

1)      Assisting the Dean/VP to determine what percentage of faculty or staff time reasonably can be committed as cost sharing on the proposed project

2)      Assisting the Dean/VP identify College/School/Unit funding sources for any non-personnel cost sharing commitments

Post Award

1)      Assisting the Dean/VP to determine what adjustments will be needed in the faculty or staff member’s other responsibilities to ensure that the faculty and staff member’s time and effort commitment does not exceed 100%

2)      Assisting the Principal Investigator or Project Director to develop a plan for recording and documenting any required cost share throughout the life of the project

3)      Helping the Principal Investigator or Project Director to document all personnel time commitments and non-personnel contributions as needed

School or College Deans are responsible for:

Proposal Stage

1.      Identifying any potential faculty/staff time and effort conflicts that may occur if the proposed project is funded and discussing any faculty/staff time and effort adjustments that may be needed

2.      Approving all mandatory and voluntary committed cost sharing (personnel and non-personnel) made by their school or college described in any proposal submitted by USF

3.      Approving any release time for faculty and staff within their college and ensuring that this release time will not be detrimental to the ongoing instructional, research, or service activities of the faculty/staff member’s department or unit should the proposal be funded

Post Award Stage

1.      Working with the Business Manager of the College/School/Unit to ensure that all cost sharing commitments are being met in a timely fashion

2.      Ensuring that faculty/staff time and effort commitments within their College/School/Unit do not exceed 100% for all USF and sponsored project activities 

3.      Approving the time and effort reports of faculty and staff that have over 25% of their assigned time (paid or cost-shared) committed to sponsored projects

Office of Sponsored Projects is responsible for:

Proposal Stage

1. Reviewing program specific guidelines and agency requirements to determine the necessity for cost sharing on any proposal submitted by USF.

2. Ensuring that all cost sharing commitments (personnel and non-personnel) have been approved by the Dean/VP of the appropriate College/School/Unit prior to submitting the proposal to the Associate Provost/VPPB for final institutional approval.

3. Assisting the Principal Investigator to identify the level of cost sharing needed and potential sources of cost sharing from USF sources. 

4. Contacting federal agency personnel to determine if un-recovered F&A is an allowable cost sharing contribution to a proposal.

5. Reviewing the proposal to ensure that all of the USF cost share commitments described are allowable per federal agency guidelines and correctly stated in the proposal.

6. Negotiating/renegotiating appropriate cost sharing levels with funding agency program personnel as needed.

Post Award Stage

Renegotiate/request for award amendment, from funding agency, to reflect appropriate cost sharing levels if voluntary cost sharing commitments are not in line with the individual’s other USF’s obligations.

Business & Finance is responsible for:

Post Award Stage

1. Sending all Principal Investigators and Project Directors involved with federally funded sponsored projects a Cost Sharing Certification form each semester;

2. Collecting and reviewing the approvals on completed Cost Sharing Certifications on a timely basis.

3. Notifying the Principal Investigator or Project Director and the Dean/VP if cost sharing commitments are not in line with USF’s obligations to the funding agency.

4. Reporting mandatory cost sharing on financial reports submitted to federal funding agencies.

5. Preparing cost sharing information as needed for A-133 audit purposes.

The Associate Provost/VPPB is responsible for:

Proposal Stage

Ensuring that all appropriate approvals for institutional and third-party cost sharing have been obtained prior to authorizing the submission of any proposal for sponsored projects supported by federal funding agencies, or sponsored projects involving research or USF faculty time commitments. 

Post Award Stage

Ensuring that all appropriate approvals have been obtained prior to authorizing the acceptance of any external award for sponsored projects supported by federal funding agencies, or sponsored projects involving research or USF faculty time commitments.