Policies

In fiscal year 2014, federal awards represented approximately 77% of total grant and contract award activity at UNT Health. Salary expense represents the largest direct cost component on these projects.

In recent years, the federal government and its auditors have become much more active in their review of effort reporting requirements, and a number of universities have received large audit disallowances as a result. Recent cases are audit disallowances are:

• Northwestern University paid $5.5 million to settle issues related to problems with effort reporting, on a contracts and grants base of $325 million;
• South Florida returned $4.1 million to the federal government to settle a number of charging issues, including effort reporting;
• University of California paid a total of $2.1 million to settle an NIH salary cap limitation disallowance for the period July 1, 1995, through June 30, 2002.

An Effort Reporting System must provide records on how individuals participating in federally funded sponsored agreements actually spend their time. Because the federal government mandates effort reporting, it is incumbent upon institutions that received federal funding to maintain accurate and auditable systems and records.

Documentation on how individuals spend time on federally sponsored projects is subject to federal audit and can be cause for institutional or individual disallowances.

Institutional disallowances can result if:

• The effort report was certified by an individual who would not have reasonable knowledge of time a project employee spends on the project;
• The effort report does not encompass all of the activities performed by the employee under the terms of their employment;
• The levels of effort reported do now appear reasonable, given the responsibilities of the individual or the actual time spent working on the project;

Individual disallowances can result if:

• The effort report certified by the individual is found to be falsified;
• The levels of effort reported do not appear reasonable

As evidenced above, federal audit disallowances can result in serious financial penalties for institutions. In addition, criminal charges may be brought against an individual certifying to falsified effort. Current audit plans for federal auditors include effort reporting as a specific audit focus.

You can find UNT Health's time and effort policy in PolicyTech under 8.101 Effort Reporting.

Policy 8.101

During the effort certification period, Principal Investigators (PIs) and faculty receive up to three email notifications informing them that their effort statement is ready for certification. 

If, after the close of the effort certification period, a PI or faculty member has not certified their effort or project statements, the Research Financial Compliance team will review and initiate the following escalation process if their effort is in fact ready to certify: 

Initial escalation: An email will be sent to the direct supervisor listed in the employee’s ePAR, with the Director of Grant Accounting and Fiscal Compliance copied.

Two-week follow-up: If the issue is not resolved within two weeks, the matter will be escalated to the department chair, with the supervisor and the Director of Grant Accounting and Fiscal Compliance included.

Further escalation: If the issue remains unresolved, it will be escalated to the Dean, copying the Vice President for Research & Graduate Studies and the Senior Associate Vice President for Research Finance & Administration.

Final action: If no action is taken by the Dean, the university’s violation policy will be implemented. See 8.101 for details: 

During the life of an NSF or NIH award, the PI must notify the Office of Sponsored Programs (OSP) when the PI is going to be temporarily absent from the project (three months or less.) For PI absences longer than three months, the University must obtain prior sponsor approval and notify the sponsor at least 30 days before the PI’s departure. In both cases OSP is required to notify the grantee agency of arrangements that have been made for the conduct of the project during the PI’s absence, so the PI must provide this information to OSP. Prior sponsor approval is also required for significant reductions (generally 25% or more) of the PI’s effort on the project (including periods under a no cost extension.) These requirements also apply to co-PIs and, on NIH awards, to senior or key personnel designated by NIH in the Notice of Award.

It is the PI’s responsibility to be aware of each key person’s effort commitments to communicate any inability to meet those commitments to OSP to ensure that any necessary sponsor approvals of their reduced efforts are obtained.