1. Effort Reporting at MSU A Primer Dan Evon, Director, Contract & Grant Administration www.cga.msu.edu/default.asp?cont=serinst www.cga.msu.edu/default.asp?cont=serinst MSU has been doing effort reports since 1987 – What’s up? Why now? June 2006 - Yale University subpoena by DOD, NSF & NIH seeking information about grant practices; Yale pledges full cooperation June 2006 - University of Pennsylvania $Unknown payback after $9.2M questioned 2005 - Florida International University $11.5M payback 2005 - Cornell's Medical School $4.3M payback 2005 - East Carolina University $Unknown payback w/ $2.3M questioned 2005 - NSF IG Effort Reporting Audits started 1/05 & HHS Draft Compliance Guide issued 11/05 2004 - John Hopkins University $2.6M payback 2004 - Harvard University $3.3M payback 2003 - Northwestern University $5.5M payback

2. National Science Foundation (NSF) Effort Reporting Audits Being performed by the NSF Inspector General Office Cal Tech, Vanderbilt, U of Illinois + 2-3 more?? At U of Penn they: Looked at three years of data All NSF grants and all people paid Want to see appointment letters – verify salary rates Want a certification that those on AY appointments who were appointed 3 months in the summer didn’t take any vacation! Looking for late change of status forms and was the change reflected on the effort reports Want to see student time sheets Want to see who signed the effort report And if not the individual – what basis/documentation/e-mail did they have as the basis to make the certification Visit with the PI’s – don’t want CGA representation present Want a description of the research project Is the effort report correct and signed/returned on time? When are they coming to MSU???

3. Draft OIG Compliance for Recipients of PHS Research Awards P ublished Nov 28, 2005 in the federal register (vol 70, # 227) Three major potential risk areas for NIH Research Awards: 1) Time and effort reporting – SER’s and Institutional base salary 2) Properly allocating charges to projects 3) Reporting of financial support from other sources Recommended elements of compliance program 1) Written policies & procedures 2) Designating a compliance officer and committee 3) Conducting effective training and education 4) Developing effective lines of communication 5) Conducting internal monitoring and auditing 6) Enforcement through well-publicized disciplinary guidelines and appropriate disciplinary action 7) Responding promptly to detected problems 8) Defining roles & responsibilities & assigning oversight responsibilities

4. Semester Effort Report (SER) Keys! The effort percents shown in the proposal came from the PI! Effort percentages are based on your total professional effort to MSU - NOT a standard 40 hr work week! The person signing the SER MUST be comfortable that percentages listed in column 7 are accurate for each semester! If a federal project is not listed on the printed SER – add a line with App number, title, and column 7 effort! Because MSU doesn’t keep time records for faculty, only the employee, or PI, can defend or contradict the percentages reported in column 7 of the SER! AY appointments with 3 month summer appointments can NOT take vacation! SER’s must be completed in a timely manner!

5. Semester Effort Report (SER) What is a Semester Effort Report (SER)?   The SER is a receipt which is used to document the amount of effort actually spent on a project. Why do we have SERs?   Effort reports are required by federal regulations found in OMB Circular A- 21. Auditors from the agencies that give MSU money use SERs to verify that the percent of salaries charged to the project, or cost shared, are justified. The SER serves as the receipt for salary expenses. If, for example, an auditor could not find a SER, or the percentage of salary charged to the project is more than the percentage of effort reported in column 7, the auditor will request a refund of the difference. How often are SERs required?   Once each academic semester (3 per year)

6. Who has to complete SERs?   Only those with salary charged, or committed as cost sharing, to projects funded with Federal or State of Michigan money. Usually these projects are within the account series 61-0000 - 61-9999, and the federal series of MAES & MSUE Federal Accounts. How do I complete the SER?   Report the percentage of effort actually performed during the semester in column 7. Then sign, date and return the SER to CGA. Please use whole numbers only. The total effort reported in column 7, for all projects, MUST TOTAL 100%. What if a restricted project doesn’t have an account yet or the account doesn’t appear on the SER and you are working on it?   Add it – App or account number, title, and column 7 effort Semester Effort Report (SER)

8. Who can sign the SER?   Principal Investigators (PI's): PI's should sign their own SER's. MSU is considering a policy change that would require faculty to sign their own SER’s.   Non-PI's: should also sign their own SER's (especially if they are working on multiple projects with different PI's), however it is acceptable to have the PI or Co- PI sign for them if they are familiar with all of their restricted projects. Graduate Students: may be signed by the PI or Co-PI if the person is working on their projects. For Graduate students working in multiple departments or for multiple and different PI's then the student should sign their own SER's. It is understood that the PI may have to assist the student to understand the distinction between projects and duties that they have been hired to perform.   In those rare circumstances when the above guidelines cannot be met, a unit administrator may sign the SER's if they have suitable means of verification that the work was performed as indicated by the percentages listed in column 7.   Why the PI? Because there are no time sheets for faculty, only the faculty member can contradict the effort reported on the SER thereby putting the department at financial risk for audit disallowance. Semester Effort Report (SER)

9. What if the total semester commitment as printed on the SER (column 6) and the way I spent my effort are different?   Complete column 7 based upon how you actually spent your time. Please attach any information that might explain the shortage of effort on the restricted account, i.e. Change of Status, notes, etc. The office of Contract & Grant Administration will follow up on SERs with shortages of effort on the restricted accounts. Effort in excess of pay will be shown as additional cost sharing. If I have an AY appointment (9 month) and a three month summer school appointment, how much summer vacation do I get?   NONE!!!! Semester Effort Report (SER)

10. Can I average effort over more than one semester? Each semester must stand on its own. For example, a faculty member working on an NSF project Fall and Spring semesters can only be paid in the summer only to the extent they work in the summer. Effort contributed in Fall and Spring cannot be carried over to summer salary. Should I use a 40 hour work week as a base for computing the effort percent to be reported in column 7?   You should calculate the effort percent based on the time it took to perform the duties for which you were paid. If, for example, an individual can fulfill his/her obligation to the University in a 50 hour work week the SER needs to be completed, adding up to 100%, based on the distribution of those 50 hours. If an individual needs a 60 hour work week to fulfill his/her obligation, the SER needs to be completed, adding up to 100%, based on the distribution of those 60 hours. Semester Effort Report (SER)NO. NO.

11. If I have a half time appointment, should column 7 total 100%?   Column 7 on all SERs should total 100% regardless of percent employment or percent of the semester worked. If a person only worked two weeks of a semester, column 7 should still total 100% (based on the distribution of those two weeks). Please feel free to modify the dates in the upper corner of the SER when appropriate. Should work for which I received overtime pay (this is extremely rare) be included in the SER?   Include only effort performed for regular pay. Also, don’t include effort paid by the physicians practice plan. When I sign the SER, what am I agreeing to?   You are certifying that you spent at-least as much effort as the effort reported in column 7 for the report period. Auditors sampling the accuracy of the SER will begin their review with the person that signed the SER. Semester Effort Report (SER)YES. NO.

12. How do I convert work done for part of a semester into semester percentages?   Divide the number of months working on the project by the number of months in the semester (4.5 or 3) and then multiply that by the percentage of effort you spent on the project.   For example, if during fall semester you spent 50% of your time on a project until it ended on September 30, you would divide 1.5 months (August 16 through September 30 equals 1.5 months) by the 4.5 months for fall semester, i.e..333 and then multiply.5 (50%) effort equals a semester average of 17%.   Please remember to use whole numbers only. 16.67% implies a degree of precision that is not required on effort reports. Federal auditors allow up to a 5% leeway to accommodate the imprecise nature of university effort reporting. Semester Effort Report (SER)

13. How do I convert work done for part of a semester into semester percentages WHEN THE EMPLOYMENT % CHANGES within the semester, for example 75% employed through 9/30 then 100% until 12/31? Now we need to solve two calculations.   First calculate the semester FTE work months (not 4.5 anymore)   1.5 months at 75% employment (8/16-9/30 1.5*.75 = 1.125) plus 3 months at 100% employment (10/1-12/31 3*1 = 3). Add them together for the semester FTE work months = 4.125.   Second calculate the semester FTE project months   1.5 months at 75% (8/16-9/30) times 50% effort on the project = (1.125*.5).5625   Now divide.5625 FTE project months by 4.125 semester FTE work months and you have the semester percentage of 13.6% which rounds to 14%.   Repeat for each restricted account/project.   Wasn’t that easy?????? Semester Effort Report (SER)

14. Which payrolls are used to compute the semester percentages that are printed on the SER? Semester Effort Report (SER) Employee TypeFALLSPRINGSUMMER Work Dates8/16 – 12/311/1 – 5/155/16 – 8/15 AP & Annual1/2 Aug, Sept, Oct, Nov, Dec Jan, Feb, March, April, 1/2 May 1/2 May, June, July, 1/2 Aug Grad Asst9/15, 10/15, 11/15, 12/15, 1/2 of 1/15 1/2 of 1/15, 2/15, 3/15, 4/15, 5/15 6/15, 7/15, 8/15 Academic Year pay dates 8/16-2/15, i.e., 6 months 2/16-8/15,i.e., 6 months Summer School CTs all full pay periods between 8/16-12/311/1-5/155/16-8/15

15. Note for Academic year appointments (AY or 9 month appointments)   Because the pay dates for academic year appointments are significantly different than the work dates, care must be exercised when completing change of status forms.   The problem stems from the fact that salary earned for 9 months work is paid over a full 12 month year. In order to avoid payroll problems, all AY appointments MUST begin and end on one of the following special dates: August 15 or 16, and February 15 or 16.   The payrolls for fall semester are: ½ Aug., Sept., Oct., Nov., Dec., Jan., and ½ Feb, i.e. 6 months. The payrolls for spring semester are: ½ Feb., March, April, May, June, July, and ½ Aug, i.e. 6 months. Summer school payments are paid on special payrolls during the summer. Semester Effort Report (SER)

16. Note for Academic year appointments (AY or 9 month appointments) - - Continued   When a change of funds needs to take place within a semester, a semester average work percent must be calculated and then it must be applied to the semester’s pay dates. The remarks section of the change of status should include a statement similar to the following: “17% pay represents 50% effort on account x beginning 8/16 and ending 9/30”. SER Instructions at: www.cga.msu.edu/default.a sp?cont=serinst