1. Effort Reporting and PARs What You Need to Know Before You Sign Your PAR January 24, 2013 Maja Marjanovic Director, Sponsored Programs

2. What is Effort Reporting? Total Effort = Total activity for which a faculty/staff member is compensated by Purdue. Regardless of the number of hours actually worked (100% Institutional Effort). No standard hours or work week Effort varies from individual to individual Includes all Purdue activity Not just Monday through Friday Not just X days a week Effort Reporting = An individual certifies that salaries charged to sponsored projects are reasonable in relation to the work performed during the report period.

3. Why is Effort Reported and Certified? Certification is required by Federal regulations and is subject to independent audit and review. Grantees agree to comply with Federal Guidelines, OMB Circulars A-21 & A-110 (2 CFR 220 and 215). A-21 (2 CFR 220) requires payroll costs to be documented to ensure that external sponsors reimburse the grantee only for the time and effort actually expended on their behalf. Salary costs are the majority of costs incurred on a grant.

4. How is Effort Reported and Certified? What is a PAR? Effort is Certified with a PAR – Personnel Activity Report. Spring (January – April) Summer (May – August) Fall (September – December) PAR is a document that is used for certification of effort at Purdue. It is considered a legal document.

5. How is Effort Reported and Certified and What is a PAR?

6. How is Effort Reported and Certified for Biweekly Employees and Students? Effort for Clerical/Service Employees and Students is certified with biweekly timecards. Therefore, it is very important that the PI, or a person PI specifically designates, reviews and signs all timecards. The PI is responsible for ensuring these are accurate.

7. What are PIs Responsibilities? Review proposal, budget justification and award documents to ensure that desired effort is budgeted and approved by the sponsor. Discuss appropriate effort allocation for all staff on the project prior to, or at the beginning of each semester. Discuss the availability of funds for this effort to ensure the grant is not overdrafted (fringe benefits, graduate fee remission, F&A). Discuss your effort with your supervisor/DH/Dean and obtain approvals. Contact Post Award Manager if any changes need to be made during the semester. Review timecards for students and clerical/service staff on a biweekly basis. After the semester, meet with the Post Award Manager to review PARs. Review dates, % of effort, and account numbers. Ensure that the % box is filled. Legally certify PARs. In cases where a general limit is imposed by the Agency on the amount one can earn (NIH) or the number of months that can be charged to the project (NSF), the Post Award Manager is responsible for review.

8. PAR Related Audit Risks for the University Yale University Settles for $7.6 Million in Response to False Claim Allegations “The second allegation involved some Yale researchers submitting time and effort reports for summer salary paid for by grants whose objectives were unrelated to the research. It was found that these researchers were motivated to commit the wrongful salary charges because their academic- year salary is not paid during the summer, so the only salary received is that which they charge to federal grants”. http://www.false-claims- act.com/2009/01/02/yale/http://www.false-claims- act.com/2009/01/02/yale/ Northwestern University Paid $5.5 Million to Resolve False Claims Act and Common Law Allegations “ the government alleged that in completing applications for the National Institutes of Health and other federal agencies grants, Northwestern overstated the percentage of its researchers' work effort that they were able to devote to the grant.” http://www.justice.gov/opa/pr/2003/February/03_civ_076.htm http://www.justice.gov/opa/pr/2003/February/03_civ_076.htm

9. PAR Related Audit Risks for the University Misrepresenting your effort allocation Charging summer salary when effort occurs during AY Overcharging your salary on grants Not distributing effort to specific award/account Receiving pay from the grant, but not working on the project PAR Changes Requesting changes to effort after the certification of PARs. Making salary transfers and adjustments. Cost Transfers (Salary Adjustment) A‐21 regulations: “Any costs allocable to a particular sponsored agreement under the standards provided in this Circular may not be shifted to other sponsored agreements in order to meet deficiencies caused by overruns or other fund considerations, to avoid restrictions imposed by law or by terms of the sponsored agreement, or for other reasons of convenience.” Charging unallowable effort Charging clerical or administrative effort to grants, unless unlike circumstances are justified and approved by the sponsor.

10. Case Study Dr. Smith is a well known researcher in his field. He has a $1M award from the NIH for his research on Parkinson’s disease. He spends about 10% of his AY time working on this project, however he does not charge this work to the grant. In addition, he works full 3 summer months on the project and charges his effort accordingly. During the summer of 2012, Dr. Smith sometimes worked 12 hour days on this project. He rewarded himself by going on a 3 week cruise to Alaska with his wife, at the end of July/beginning of August. However, he spent much of time on the cruise writing a proposal for another small grant ($100,000) from NSF. He got the grant, but his wife was not happy that he worked on it during their vacation. Can Dr. Smith work on the project during the AY and not charge this time to his grant? What questions should we ask him? Is it OK that Dr. Smith charged 100% of his effort during the summer to his grant? What should we do?

11. Q&A