The University of Arizona

Effort Reporting

Background

Typically, two thirds of the direct cost budget for research grants and contracts consists of personal services. The University of Arizona uses the term 'personal service' to connote the human time and effort expended on a certain project. Other terms for personal services are personnel services, labor and effort. Due to sponsor regulations, accounting for the effort of personnel assigned to grants and contracts requires a high degree of attention. Sanctions for noncompliance can be serious, including audit findings, criminal charges, debarment, and suspension.

The following information is intended to guide department heads and principal investigators to properly report project related effort. The policies and guidelines presented in this document represent the standard practice of Research I universities in accounting for personal services costs, a practice commonly referred to as "effort reporting."

Federal cost principles allow the direct charging of personal services to project accounts, provided that the following requirements are met.

  • The employee's effort directly benefits the project.
  • The personal services costs are reasonable and necessary in order to reach project objectives.
  • The personal services costs are treated consistently, in accordance with established policies of the institution.
  • The terms of the agreement or federal cost principles do not otherwise prohibit charging the personal services costs.

The important point is that the salaries and wages charged to a project must represent the proportionate share of effort that directly benefits the project.

It is recognized that in an academic setting, teaching, research, service, and administration are often inextricably intermingled. A precise assessment of factors that contribute to costs is not always feasible, nor is it expected. Therefore, it is acceptable to rely on estimates in determining the allocable effort to be charged to a project. Charges to sponsored agreements may include reasonable amounts for closely-related activities contributing to work under the agreements such as:

  • delivering lectures about specific aspects of the ongoing activity
  • writing reports and articles
  • participating in appropriate seminars
  • consulting with colleagues and graduate students
  • attending meetings and conferences

Summary of Payroll Distribution

The University of Arizona's payroll and effort reporting systems comply with the requirements of Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (2 CFR 200, Section 200.430 Compensation – personal services).

The distribution plan for each employee (account, percent distribution of effort, and time period) is entered in the UAccess Employee Position Distribution. The Position Distribution then applies the charges to the proper accounts in the UAccess Financials system based on this distribution. This plan must be modified if there is a significant change in the employee's work activity, i.e., change in distribution of effort to one or more sponsored accounts. A significant change is defined as 5% or more of an employee's total UA compensated effort over a period longer than two months.

The University's effort reporting system is based on the actual distribution of salaries and wages. Refer to the General Guidance on How to Treat Some Common University Activities for a list of activities that can be charged to a sponsored account. Reporting periods are semiannual, January to June and July to December. UAccess Financials Effort Reporting Policy and Procedure defines requirements for the current effort reporting process. The University has an electronic system, UAccess Financials, to certify payroll distribution.

The University produces the Payroll Expenditure Listing report after each pay period with employee names and amounts charged to each account. Payroll representatives should promptly distribute the Payroll Expenditure Listing reports to principal investigators for review. This is an important internal oversight step. Principal investigators or their business representatives should immediately notify their payroll representatives of errors. Payroll representatives may correct account distribution errors by initiating a Salary Expense Transfer.

Principal investigators are responsible for:

  • All financial activities charged to their sponsored project accounts
  • Certifying proper payroll costs by approving effort reports in the UAccess Financials system
  • Changing workload plans to recognize significant changes to employee work activity
  • Ensuring sufficient funds are available to cover workload changes

Electronic Effort Reporting Training

1. Online powerpoint Effort Reporting Workshop: Download here as PDF

2. Using the UAccess Financials system:
    Please login using your UA NetID and password, and select the Effort Certification topic: https://upktraining.uits.arizona.edu/odstrack/content/financials/toc0.html