Presented by: LaShawnda Hall Kathleen Engstrom Michael Moss Maureen Johnson Colleen Kehoe October 5, 2011 ERS 2.5 Training

Agenda 1. Concept Review Effort vs. FTE Cost Sharing Changes in Effort, Salary Charged & Key Personnel 2. Compliance Risks & Considerations 3. ERS Enhancements

FTE vs. Effort

What is FTE? total hours worked divided by the number of hours in a full-time schedule FTE (full time equivalent) is defined as the total hours worked divided by the number of hours in a full-time schedule Total Hours Worked 40 Hours Worked Total Hours for a Full-Time Schedule 40 Hours Work-Week FTE =1.0 FTE =

What is Effort? 5 An effort commitment is a promise to a sponsoring agency that an individual will work a specific portion of their time on a sponsored program.

FTE vs. Effort FTE Effort Total hours worked divided by the number of hours in a full-time schedule Promise to work a specific portion of their time on a sponsored program

FTE vs. Effort cont. FTEEffort on Grant #1 Effort on Grant #2 Total Effort on Grants Tony Soprano1.075%25%100%

FTE vs. Effort cont. FTEEffort on Grant #1 Effort on Grant #2 Total Effort on Grants Tony Soprano1.075%25%100% Erica Kane0.550% 100%

FTE vs. Effort cont. Important: The base salary used to commit effort for individuals should be based on their actual appointed FTE unless it is anticipated that the FTE will increase.

Poll Time 10

Cost Sharing Agency Funded UIC Funded

Definition of Cost Sharing 12 Cost sharing is the University’s financial contribution toward a sponsored project. UIC $ (25%) Sponsoring Agency $ (75%)

Cost Sharing may also be called… 13 Donated In-Kind Contributed Matching Voluntary

Mandatory Committed Cost Sharing 14 Cost sharing is required by the sponsor and included in the proposal budget or budget justification. Example: A sponsoring agency is willing to fund 90% of a project, but UIC is required to cover the remaining 10% of the total costs for that project. The cost sharing commitment is in writing.

Voluntary Committed Cost Sharing 15 Cost sharing is not required by the sponsor, but included in the proposal budget or budget justification anyway. The sponsor does not require cost sharing, but UIC includes a 10% match in the proposal budget anyway. The cost sharing commitment is in writing.

Voluntary Uncommitted Cost Sharing 16 Cost sharing is not required by the sponsor and is not in writing in the proposal or the award documentation. Example: A grant does not require cost sharing and no additional effort commitments were mentioned in the proposal. A PI is listed at 10% effort, but actually works 15%. The 5% is voluntary uncommitted cost sharing since it was never communicated that the work will actually be 15%. Voluntary uncommitted cost sharing is not tracked, accounted for, or otherwise documented.

The three basic types of cost sharing 17 MandatoryRequired by sponsor terms & conditions Documented/tracked Voluntary – CommittedProposed by the UniversityDocumented/tracked Voluntary - UncommittedNot proposedNot required to document or track

Other Cost Sharing 18 Scenarios that may result in cost sharing that must be documented/tracked: No Cost Extension Salary Cap Overdrafts

Cost Sharing & Over-Commitments 19 A PI has effort on 4 grants: some paid, some cost shared This PI is now fully committed at 100% This PI does not have any remaining effort available. This person is now over committed if they have teaching, public service, or administrative responsibilities. Effort Charged to Grant Effort Cost Shared to Grant Total Effort Grant 120%5%25% Grant 220%5%25% Grant 320%5%25% Grant 420%5%25% TOTAL 80%20%100%

Poll Time 20

Changes to Effort, Salary Charged to Sponsored Awards & Key Personnel

Changes to Key Personnel, Effort and Salary Charged to Sponsored Awards 1.Agency approval is required for significant changes in effort 2.If salary costs proposed are not borne by the grant, those costs must be recognized as cost share and is required to be tracked and reported accordingly must 3.Changes in key personnel must be reported to all federal agencies OMB Circular A-110, C.25.(c).(2)…recipients shall request prior approval for changes in key persons specified in the award document.

Changes to Key Personnel, Effort and Salary Charged to Sponsored Awards cont. Effort Committed in Proposal Actual Effort Worked Effort Charged to Grant Management 20%16% 1.Adjust salary charged to grant to 16% ERS: 16% effort (16% payroll, 0% cost share)

Changes to Key Personnel, Effort and Salary Charged to Sponsored Awards cont. Effort Committed in Proposal Actual Effort Worked Effort Charged to Grant Management 20%16% 1.Adjust salary charged to grant to 16% ERS: 16% effort (16% payroll, 0% cost share) 20%10% 1.Obtain agency approval for decreased effort (if required) 2.Adjust salary charged to grant to 10% ERS: 10% effort (10% payroll, 0% cost share)

Changes to Key Personnel, Effort and Salary Charged to Sponsored Awards cont. Effort Committed in Proposal Actual Effort Worked Effort Charged to Grant Management 20%16% 1.Adjust salary charged to grant to 16% ERS: 16% effort (16% payroll, 0% cost share) 20%10% 1.Obtain agency approval for decreased effort (if required) 2.Adjust salary charged to grant to 10% ERS: 10% effort (10% payroll, 0% cost share) 20% 10% 1.Adjust salary charged to grant to 10% 2.Identify appropriate fund to charge 10% effort not charged to grant ERS: 20% effort (10% payroll, 10% cost share)

Poll Time 26

Compliance Risks & Considerations

What are the Compliance Risks Related to Effort Reporting? Improper or inadequate certification of effort can result in the following restrictions imposed on the University by the federal government: Refund of funds to sponsor Withholding of future awards Special monitoring by sponsor Temporary withholding of payments Audit findings Requirement for corrective action plan Designation as a "high risk" organization Loss of Expanded Authorities Payment of punitive damages

Timeliness It is extremely important to complete effort reports as soon as possible. 4,450 effort reports submitted in AY10 While the overall AY10 Effort Certification was a success, the auditors challenged the timeliness of the submitted reports.

Compliance Considerations and Justifications Labor Redistributions Salary transfers are to be completed promptly, within 90 days of discovery. Transfers made over 90 days from the original transaction require additional justifications (signed GC81 form with supporting documentation). Multiple labor redistributions are a key indicator of the quality and effectiveness of internal controls Salary transfers should not be used as a management tool nor used for convenience to move funds between budgets Salary transfers can be a significant compliance risk

Compliance Considerations and Justifications Labor Redistributions How to avoid: Review and reconcile budget statements regularly to determine required salary distributions changes, detect errors and make payroll adjustments to reflect appropriate effort commitments As much as possible, avoid labor redistributions when effort has previously been certified as correct Do not use sponsored budgets as a holding account – request anticipation funds Avoid labor distributions occurring at the end of a grant period

Poll Time 32

ERS Enhancements New Features

Recall a submitted worksheet If not yet certified Request a change in certifier Request a change in business manager Request read-only access be granted to another business manager Change committed cost sharing Access by 3-Digit Org

Business Manager List

Management Features

Read Only Access

Changes Committed Cost Sharing Dollar amount will re-compute when you click save

ERS System Demo

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