1. University of Pittsburgh
Effort Reporting Guidelines

2. Effort Reporting Definitions
Institutional Base Salary (IBS) – annual compensation that the applicant’s organization pays for an individual’s appointment. IBS excludes any income that an individual may be permitted to earn outside of the duties to the applicant organization.
National Institutes of Health Salary Cap – sponsor-imposed ceiling on salary charged directly to sponsored awards. Effective January 1, 2008 through December 31, 2008, the salary cap level is $191,300. Any remaining salary above this cap must be supported by the University from non-sponsored program funding sources.
Plan Confirmation – method of ensuring that salaries and wages initially distributed based on budgeted, assigned or planned work activity are updated to reflect any significant changes in after-the-fact actual work distribution.

3. Understand effort reporting requirement guidelines set forth by the Office of Management and Budget
Office of Management and Budget’s (OMB) Circular A-21 describes “Cost Principles for Educational Institutions”. The circular is applicable to grants, contracts, and cooperative agreements. Section J.8 provides the requirements for effort reporting.
Section J.8 makes reference back to Section F.9, which ultimately refers to Section J.10. Therefore, it is important to review all of these sections for effort reporting.
Circular A-21 effort reporting sections, as mentioned above, require an acceptable method be established to document and certify apportionment of salaries and wages. One of these methods is “plan confirmation” under which 100% of an individual’s University effort is distributed based on budgeted, planned, or assigned work activity and is updated to reflect any significant changes in work distribution.

4. Follow effort reporting procedures established by the University of Pittsburgh
The University utilizes a plan confirmation system for effort reporting purposes in accordance with OMB Circular A-21. This system is maintained by Financial Records Services (FRS) and Payroll.
The University’s plan confirmation system is the Salaried Personnel Activity Reporting (SPAR) system which serves the following purposes:
effort reporting and payroll distribution
effort certification
identification of direct and/or indirect activities (i.e., teaching, administrative, etc.)
Identification of salary related cost sharing
compliance with effort reporting requirements of OMB Circular A-21
Departments utilize the SPAR form to provide, on a percentage basis, an employees’ direct and indirect effort distribution. The percentage of effort for each month must always total 100% of the individual’s University effort and may be initially recorded using reasonable estimates.

5. Calculate the salary basis for determining effort
What is typically included in a faculty member’s base IBS?
Annual Salary
Administrative Supplements
What is not included?
Any outside compensation
UPP clinical activity earnings
VA salaries
Any internal payment submitted through an Other Supplemental Payroll Payment (OSPP)- incidental work outside of appointment

6. Determine how salary charges are to be distributed
Total effort, expressed as a percentage of time, for an employee must equal 100% of the individual’s University effort on the SPAR for each month.
Tips for determining effort distribution:
Identify appointment responsibilities.
For each responsibility, estimate total hours per week spent.
Teaching and administrative activities cannot be directly charged to sponsored research.
Add up the hours and divide each responsibility by the total to get total effort distribution.
This is the distribution that should be reflected on the SPAR.

7. Develop a process for verifying employees salary distribution reflects the actual effort devoted to each sponsored project charged
OMB Circular A-21 requires effort reports represent 100 percent of an individual’s activity and provide an after-the-fact confirmation or determination that the effort report represents a reasonable estimate of the actual effort expended.
The Principal Investigator is responsible for overseeing the effort reporting process relating to research and ensuring compliance with financial and administrative areas of the project.
The Departmental/Research Administrator handles the day-to-day processing of SPAR forms and related labor distribution schedules across all activities.

8. Develop a process for verifying employees salary distribution reflects the actual effort devoted to each sponsored project charged
Timely reviews by the departments will ensure that a substantial amount of salary and wage costs charged to sponsored projects reasonably reflect actual effort worked on those projects.
Periodic reviews are also done by the department to ensure the Payroll Labor Distribution Reports (PLDR) reflects appropriate distribution to non-research activities.

9. Ensure proper certification of effort reporting procedures are applied
OMB Circular A-21 requires that effort reports be signed by the employee, Principal Investigator, or designee who is in a position to know whether the work was performed.
The University requires signatures from the Principal Investigator, or designee having direct, first-hand knowledge of the work performed, certifying that the work was performed and the charges are reasonable.

10. Understand the potential risks associated with insufficient effort reporting
Consequences of insufficient effort reporting can involve assessment of fines and penalties, and loss of external funding to the University.
Audits are conducted periodically by government sponsors or the University’s Internal Audit Department. During the course of these audits, the key compliance issues focused on are:
Accuracy of labor cost calculations
Allowable nature of the salary charges with regard to the specific grant or contract
Proper signatures from the appropriate individuals on the SPAR forms
Timeliness of effort reporting certifications

11. Use this effort reporting guideline as an ongoing reference tool
Print this entire Power Point demonstration, including the SPAR forms/instructions, and retain for future reference.
Following is a listing of available sources to assist with any questions/concerns:
Office of Management and Budget, Circular A-21
National Institutes of Health grants
U.S. Department of Health & Human Services grants
University of Pittsburgh Effort Reporting Guideline
University of Pittsburgh Financial Records Services Department
handle processing of all SPAR forms and also retain them filed by department and then alphabetically
University of Pittsburgh Research/Cost Accounting Department
University of Pittsburgh Office of Financial Information