As a recipient of federal funding NC State University is required to comply with the Office of Management and Budget Circular Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), as well as other federal requirements for certifying effort expended on sponsored awards. Federal regulations require that employees engaged in sponsored activities periodically review and certify their effort, if costs for labor (salaries/wages, benefits) are charged directly to sponsored projects, cost shared against a nonfederal funding source, or funded from a federal appropriation.
The Employee Activity Reporting System (TEARS)
At NC State, we certify effort via TEARS using the Plan-Confirmation method:
- Personnel assignments reflect anticipated work distribution(percentage of effort spent on each sponsored project).
- Assignments (and reallocation of funds) are updated timely to reflect changes.
- Cost sharing is entered at the beginning of an award and updated as needed.
- Effort Reports are certified at the end of the fiscal year.
Approved timesheets satisfy effort reporting requirements for employees paid on a bi-weekly basis.
- Survey Periods 7/1 – 6/30. This coincides with the University Fiscal Year.
- Summer effort reports are only generated for 9-Month EPA employees who receive Summer Salary (Supplemental Pay) for work on sponsored projects during the summer months. This should be identifiable by the 601 and 602 earnings codes. The survey period is 5/16 – 8/15.
The percentages of effort certified should be a reasonable approximation of how an employee actually worked during a given period.
University maintains an effort reporting system as prescribed in Uniform Guidance, §200.430. All of the Faculty Investigators and graduate research assistants assigned to any sponsored research project are employees of the University and are paid a monthly salary. The allocable portion of any participant’s monthly salary chargeable to any given sponsored project is computed using the percentage of the investigator’s total available time that the individual certifies that he or she spent working on a given project.
There are no timesheets or hourly records on any of these salaried individuals. The University cannot certify to any quantity of labor hours on an invoice because there are no records to substantiate such a certification. In accordance with FAR Part 30 Cost Accounting Standards (CAS # 501), practices used for estimating costs in pricing proposals shall be consistent with cost accounting practices used in accumulating and reporting costs. Our proposal budgets must be prepared using the same methods that we are required to use in our cost accounting system. Our normal proposal budget shows the amount of effort associated with the salary proposed for each investigator. It may be expressed as a percentage or as a number of months of salary. All references to hours of work that may be stated in the proposal budget narrative are calculated estimates using the individuals’ certified percentage of effort, multiplied by the standard 2,080 hours per work year. Likewise, any references to hourly wages are a calculated estimate using the individual’s salary, plus benefits, and indirect costs divided by 2,080 hours per standard work year. These estimates are not part of the University’s official cost accounting system and therefore are not covered by the certification of accuracy that appears on each invoice.
Additionally, the University will request that the contract includes language explaining that the Sponsor will accept the University’s standard accounting system and invoices, substantially like the following:
“The contractor/subcontractor may submit invoices based on their standard cost accounting system. Salary, fringe benefits and indirect costs will be calculated using the percentage of individuals’ time applied to this project as prescribed in Uniform Guidance, §200.430. The contractor/subcontractor is not required to keep hourly time records to support invoices.”
- Employees who work on sponsored projects for which the sponsor reimburses the University.
- Employees who work on sponsored projects but whose time on the project is funded by the University. The University’s contribution to the cost of the project is referred to as Cost Sharing.
- Employees who work in the Colleges of Agricultural and Life Sciences and Natural Resources and are funded from certain federal appropriations.
We are required to issue a separate summer effort report to capture and document summer work on sponsored projects from 5/16 through 8/15 that is paid directly (not included in the base salary for 9-month employees). This requires a signed statement that the work was performed and can be signed by the employee, principal investigator, or responsible official(s) using suitable means of verification.
The percentages represent only the amount of time spent working on sponsored awards during this summertime period. Any other work performed during this period will not be represented on the effort report.
If the survey period on the record is a short survey period (i.e. less than the full survey period), then the system will perform a calculation to equate the short period to the equivalent of its percentage of the total survey period.
When the system calculates the cost sharing percentage for the effort, it is being calculated based on the cost sharing set-up percentage from the set up form multiplied by the proportionate number of days the cost sharing set-up represents of the entire survey period.
The percentages used on the Cost Sharing Set-Up is the percentage of time employees believe they will cost share their effort during the period indicated. This period may be less than a full survey period. If the set-up is for a period of time less than a full survey period, the percentages will be converted to the percentage of the full survey period on the actual effort report.
The percentages shown on the effort report should reasonably approximate how much an employee actually worked during a full survey period. The survey period will vary depending on whether the employee is a 9-month or 12-month employee.
Cost Shared Effort
Cost sharing should be documented when the Principal Investigators and other University employees spend a significant amount of time on sponsored projects that is not reimbursed by the sponsor. What is considered significant is ultimately left up to the judgment of the Principal Investigator(PI).
The significance of time (unless specifically committed to in the award) spent on any given project should be based upon the facts/circumstances/prior commitments of that project and is ultimately the PI’s decision when judgment is called for.
The Cost Sharing Set-Up Form must be used to establish cost sharing percentages in the effort reporting system for:
- Employees working on sponsored projects but whose time in the project is funded by a non-sponsored project.
- Cost sharing performed in order to maintain committed levels of effort on sponsored projects.
- Cost sharing performed in order to meet committed dollar amounts or % of award amounts.
- Any award where there will be direct charges associated with an individual (travel, tuition, etc.).
The purpose of the Cost Sharing Set-Up Form is to establish cost sharing percentages in the system before effort reports are printed so that the anticipated percentages are reflected on the effort reports. Additionally, cost sharing set-up forms must be in the system in order for the cost sharing reports (monthly or otherwise) to be accurate.
An after-the-fact memo must document cost sharing by EPA 9-month faculty during a summer period and bi-weekly paid employees. After-the-fact memos documenting cost sharing must be submitted to the Office of Contracts and Grants.
Cost sharing represents resources provided by other funding sources that directly benefit the sponsored projects. In most cases the cost sharing source will be from University Funding.
Cost shared effort is defined as work performed by employees on sponsored projects that are not paid by the sponsor. (In other words, cost sharing on sponsored projects for employees who work on the sponsored project, i.e. the salary is funded by the University or by some other funding source.) Cost shared effort should be included on the effort report as it is a component of the total effort that an employee works.
The following situations involving cost shared effort cannot and should not be documented on effort reports:
- Cost sharing funded by another sponsored project.
- Cost sharing funded from federal appropriations.
- Cost sharing performed by bi-weekly paid employees.
- Cost sharing performed by 9-month EPA employees during the summer period May 16 through August 15.