1. We listen. We partner. We focus. We deliver. © Huron Consulting Services LLC. All rights reserved. Wayne State University School of Medicine Research Development Committee March 4, 2011 1

2. We listen. We partner. We focus. We deliver. 2 Agenda What is Effort Reporting? Why do we need to do it? Consequences of not doing effort reporting correctly Effort Reporting Project background and accomplishments Summary of changes in how we do Effort Reporting Brief system demo Next steps/plans for system rollout

3. We listen. We partner. We focus. We deliver. 3 What is Effort Reporting? Why do we need to do it? Effort reporting is required by the federal government (OMB Circular A-21, Section J-10), since Wayne State University receives federal funds to be used for sponsored research. It applies only to those faculty and staff who are involved in sponsored/ externally funded research ( i.e. those who charge or cost share part of their salary to sponsors, and/or who have effort commitments to sponsored programs). It serves as an after-the-fact confirmation that the assignment of time and associated salary and fringe benefit costs to individual sponsored projects is fair, consistent, and timely. Effort reporting is not new to WSU. We have been doing it for several years via paper-based “Payroll Certification” forms. We are now moving to an online system (a module contained within Banner) that will provide greater efficiency and better position WSU to meet its compliance requirements. The sole purpose and capability of the new system is effort reporting compliance.

4. We listen. We partner. We focus. We deliver. 4 “Effort” from the government’s perspective: The federal government wants to know how individuals working on federally-sponsored programs are expending all of their effort In proposals, key personnel indicated their estimated effort and requested the associated salary, or made a cost-sharing commitment that the institution would fund the salary While not perfect, payroll/labor distributions serve as a reasonable starting point for effort certification (it may be off in terms of both timing and source) Effort certification serves as an after-the-fact confirmation that the individual/key personnel expended the promised effort, and that they worked at least as much as the percent of their salary charged/cost-shared to the project “Effort” from Wayne State’s perspective: Overall, the Banner payroll/labor distribution does not reflect the hours I spend, nor does it capture the different types of effort I put forth for WSU. All my effort, regardless of who is paying for it or when it’s done is important and should be recognized. A Perspective on “Effort”

5. We listen. We partner. We focus. We deliver. 5 Consequences of Not Doing Effort Reporting Correctly Effort reporting is a condition of accepting Federal funds The risks of non-compliance with effort reporting are significant – Numerous investigations have been conducted by the federal government that have focused on effort reporting - settlements have been in the tens of millions of dollars Sponsors (and/or the Department of Justice) may: – Disallow related salary, fringe and F&A costs – If considered a “false claim”, triple damages apply – Reduce or eliminate future funding – Press criminal charges against the individual NSF in particular has conducted nearly 20 reviews of institutions’ effort reporting practices. Common findings have included: – Effort reports certified late and/or by individuals without suitable means of verification – 100% effort and Institutional Base Salary (IBS) not defined appropriately – Problems with summer salary/effort calculations and reports – Effort commitments not considered in certification – Failure to report committed cost sharing accurately in “Current & Pending” support pages of proposal – Inadequate education programs for faculty and administrators

6. We listen. We partner. We focus. We deliver. 6 Consequences of Not Doing Effort Reporting Correctly InstitutionSummary of Issue University of Michigan Auditors for the NSF determined that costs claimed by the University of Michigan (UM) questioned $1.6 million in costs and $136,200 of "at risk cost-sharing." The audit encompassed nearly $58 million in direct NSF-funded costs and $17 million of cost sharing claimed by UM. However, UM rejected the findings and the recommendations. Discussions are still ongoing. Yale University Government auditors alleged that Yale mischarged federal grants through improper cost transfers, and through inaccurate and overstated effort reports that resulted in salary overcharges to federal awards. Specifically, as it relates to effort reporting, the government alleged (1) that Yale researchers submitted effort reports for summer salary that wrongfully charged 100 percent of their summer effort to federal grants, when researchers expended significant effort on other work; (2) that the PI failed to provide the level of effort proposed; and (3) the University did not have procedures for monitoring the budgeted or minimum level of effort for key personnel. $7.6 million paid to the government. Cornell University Weill Medical College Whistleblower alleged that over an eight year period, the full salaries of nurses, laboratory technicians, and other workers had been paid with NIH grant dollars, even though some of the employees were not involved in the research at all and others did not work full time on the project. The Department of Justice (DOJ) said Weill Medical College, ‘defrauded the government and made false statements' when a PI 'failed to disclose to the government the full extent of her various active research projects’. $4.38 million paid to the government

7. We listen. We partner. We focus. We deliver. 7 Consequences of Not Doing Effort Reporting Correctly InstitutionSummary of Issue Florida International University An audit found that the university had not properly documented whether faculty members had spent the percentage of time they had promised to spend on research projects financed by the grants. Government alleged that FIU improperly billed the government for scientists' time, travel, and administration expenses over a 10-year period on a single award dating back to 1995. $11.5 million paid to the government Harvard University Harvard disclosed to government that it had, along with an affiliated hospital, overcharged NIH research and training grants by seeking reimbursement for the salaries of researchers who did not work on the grant. Faculty time was also found to be overstated, the government was billed for salaries and expenses unrelated to federal grants, and a researcher spent fewer hours than promised on a research study. Harvard and affiliated institutions paid $3.3 million to government. Northwestern University Whistleblower suit alleged that NU overcharged federal grants. Government alleged that NU overstated faculty members’ institutional base salaries in grant applications and when drawing down funds and failed to maintain adequate procedures to reconcile proposed and actual effort. Recipients of awards had not dedicated required percentage of effort to award). $5.5 million paid to government Johns Hopkins University Whistleblower suit alleged that JHU had knowingly overcharged the government by overstating the amount of time researchers worked on federal research projects and in at least one case charging for more than 100% of an individual’s salary. NIH found that JHU failed to maintain adequate compliance procedures to reconcile proposed and actual effort. $2.6 million paid to government

8. We listen. We partner. We focus. We deliver. 8 WSU Project Background WSU is focused on enhancing its compliance with federal requirements related to effort reporting This has, and will continue to include cultural as well as operational and technical changes Over the past year, WSU evaluated automated solutions and is now in the process of kicking off a project to implement the Effort Reporting module offered by Banner Huron is providing subject matter and project management assistance for the project WSU project sponsors are –Ron Brown, Provost & VP Academic Affairs –Rick Nork, VP Finance & Facilities Management –Hilary Ratner, VP Research

9. We listen. We partner. We focus. We deliver. 9 Key Communication and Education Activities Presentation to Presidents’ Cabinet Presentation to Council of Deans Presentation to Academic Senate (Research Subcommittee) Interviewed 15 research faculty from a variety of schools/disciplines Faculty participation in our Project “Working Group” Multiple presentations at Research Administrators Meetings Presentation to Faculty Research Administrators Council Presentation to Business Affairs Officers  Scheduled to present to SOM Research Development Committee

10. We listen. We partner. We focus. We deliver. 10 Additional Project Accomplishments Conducted current state assessment, identified areas of compliance risk and opportunities for improvement Developed educational materials and conducted several sessions Developed “Draft Effort Guidelines” which provides guidance on key effort compliance requirements and practices Configured and tested the new system Provided effort fundamentals and system training to departmental administrative staff

11. We listen. We partner. We focus. We deliver. Summary of Key System & Process Changes All electronic – no paper! –“Effort” displayed as percentages (based on Banner payroll/labor distribution) Pre-Review –Quality control function performed by departmental administrative staff –Purpose is to identify effort reports that do not reasonably reflect the EFFORT during the period of performance –Pre-review is mandatory. Certification can’t take place until pre review is complete Grad Student Certification –Will be performed by PI’s, not by grad students –Grad students will not receive email notifications, nor have the ability to certify in the system Research Assistant Certification –It is intended that research assistants perform their own certification –PI’s will be assigned as “Alternate Certifiers” for research assistants, and will have the ability to certify for research assistants if needed Summer Certification –For 9-month faculty, there will be a separate certification cycle for the summer period 11

12. We listen. We partner. We focus. We deliver. System Demo 12

13. We listen. We partner. We focus. We deliver. Plans for System Rollout Research faculty and staff who have effort reports eligible for certification will be notified via a system-generated email on or about March 7. Certification due date is April 4. System generated reminders and notices will be sent as outlined in the above timeline. 13

14. Support and Additional Information 14 For additional information on effort reporting (educational materials, operational guidelines, etc.) please see the SPA web site: http://www.spa.wayne.edu/post/effort_reporting.php http://www.spa.wayne.edu/post/effort_reporting.php Education and Guidance on Effort Reporting –Draft Effort Guidelines – Provides guidance on how manage effort reporting at WSU –“Effort 101” – Covers key effort reporting definitions and concepts –Effort Reporting FAQ document Navigation and use of the new effort reporting system. Guides have been developed specifically for: –Research faculty and staff –Departmental administrative support staff

15. We listen. We partner. We focus. We deliver. Questions? Comments?? 15