1. Effort Reporting What is it and how is Effort determined? Presented by Sponsored Programs Accounting

2. What is Effort Reporting?  Required by OMB Circular A-21: Section J(2).  It is the process of confirming that an employee’s salary distribution reflects the actual effort of that employee on all university activities.  Effort should be calculated based on a reasonable estimate of the percentage of effort expended over the course of the reporting period.

3. How is Effort determined?  Starts with the translation of Salary expenses into percentages. Examples will be provided later.  Covers all Institutional activities. (Exceptions: Wage payroll, teaching external courses (including summer courses)).  Total Effort always equals 100% ; regardless of hours worked.

4. Who is an appropriate certifier  Generally the employee being paid by the university.  Also may be the Principal Investigator or the Supervisor of the employee.  MUST BE someone that has a “suitable means of verification that work was performed”.

5. How is it determined? (Example 1)  A 12-month JMU employee, is paid an annual salary of $50,000 (4167/month).  From May 16 – Aug 15 (3 months), he/she works on a Sponsored Award and receives $8300 of their salary from the grant.  Summer effort would be 66% Grant ($8300/12,501) ; 34% JMU ((12501-8300 / 12501)) under this salary distribution.

6. How is it determined? (Example 2)  Assume the same data as the previous slide: A 12-month employee, paid $50,000  From May 16 – Aug 15 (3 months), he/she works on a Sponsored Award and receives an additional $8300 from the grant. Note this is very rare, but does occur.  In this case, Summer effort would be 40% ($8300/20,801) Grant; 60% JMU ( (20801-8300 / 20801)). Note the total % remains 100% even with the increase total salary.

7. What about Academic Year Faculty?  For Effort Reporting purposes, an academic year contract is defined as “9 month”.  While paid over a 12 month period, their “institutional base salary” (IBS) is based on 9 months of effort.  ERS recalculates earned payroll so the IBS is recognized in the Fall, Spring semesters only. That is, no Departmental (IBS) salary will be shown on the Effort Forms for these employees in the summer.

8. 9-Month Faculty (Example 3):  A 9-month (academic year) JMU employee, is paid an annual salary of $50,000 (4167/month).  From May 16 – Aug 15, he/she works on a Federal Grant and receives $8300;  Summer effort should be 100% Grant; since no effort for university activities were required over the summer.

9. Why does this matter?  Sponsored Program budgets are calculated on the percentage of time an employee will apply to the sponsored project. The employee is then obligated to meet the time commitment expressed by this percentage, regardless of the other commitments they may have with the University. Accordingly, using examples 1 and 2; if the employee promised 66% of their effort to the grant, they would have not met that commitment in Example 2 even though the grant paid the same amount of salary. (The sponsor did not receive what they were promised).

10. How does the Effort Reporting System (ERS) work?  ERS is loaded with salary data for the semester (Spring, Summer, Fall) from the Payroll System.  This data is then manually adjusted by Sponsored Programs Accounting (SPA) to reflect other relevant accounting entries (ATV’s moving salary to another DeptID, Retro-pay, etc.)  ERS then converts this adjusted salary data to percentages based on Department ID’s used for salary.

11. How does ERS work? (cont’ed)  Once the certifications are released by SPA, any JMU employee that received salary from a grant receives an email with link to ERS.  This person logs into ERS with their JMU eID/Password (same one used for email).  Person then determines if the percentage(s) listed reasonably represents actual effort  The Employee certifies the percentage(s); or enters a correction.  SPA then completes a post review of modified certifications. This post review generally requires accounting entries to adjust salary data to match the percentages entered.

12. Is there anything else captured by ERS? Yes - MATCHING! (Also called Cost Sharing)

13. Committed Cost Share (Matching)  Cost Share is given to the sponsor as a contribution to the grant.  If this contribution is employee time (effort), the in-kind value should be captured by ERS.  While this effort will not be reflected as salary expense from the grant, it must be tracked in the University’s records so it can be documented to the sponsor.

14. Matching Example:  A 12-month JMU employee, is hired with an annual salary of 50,000 (4167/month).  From May 16 – Aug 15 (3 months), employee pledged 2/3rds of her time on a grant.  Effort recorded for the employee should be 67% Grant; 33% JMU.  The in-kind value of that contribution to the grant would be $8,375 (4167 * 3 months * 67%).

15. What should you really take from this presentation? 1) It is important to document the amount of time you spend on your JMU activities so you have basis to support your effort certifications. 2) It is important to submit any paperwork (PAR forms or ATV’s) promptly to ensure all salary adjustments are included in the ERS calculations.

16. What should you really take from this presentation? (cont’ed) 3) If you provided Match to a grant (but no salary from a grant), you may contact SPA and request a Certification to document this match for that semester. 4) Someone with ‘suitable means of verification’ must certify. (They should keep records as well!)

17. Questions  Contact Sponsored Programs Accounting: Kyra Shiflet (shiflekl@jmu.edu) 8/7108shiflekl@jmu.edu John Hulvey (hulveyjd@jmu.edu) 8/3725hulveyjd@jmu.edu