As a recipient of federal funding NC State University is required to comply with the Office of Management and Budget Circular Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) as well as other federal requirements for certifying effort expended on sponsored awards. Federal regulations require that employees engaged in sponsored activities periodically review and certify their effort, if costs for labor (salaries/wages, benefits) are charged directly to sponsored projects, cost shared against a nonfederal funding source, or funded from a federal appropriation.
At NC State, we certify effort via The Employee Activity Reporting System (TEARS) using the Plan-Confirmation method:
- Personnel assignments reflect anticipated work distribution (percentage of effort spent on each sponsored project).
- Assignments (and reallocation of funds) are updated timely to reflect changes.
- Cost sharing is entered at the beginning of an award and updated as needed.
- Effort Reports are certified at the end of the fiscal year.
NOTE: Approved timesheets satisfy effort reporting requirements for employees paid on a bi-weekly basis.
- Survey Periods 7/1 – 6/30. This coincides with the University Fiscal Year.
- Summer effort reports are only generated for 9-Month EPA employees who receive Summer Salary (Supplemental Pay) for work on sponsored projects during the summer months. This should be identifiable by the 601 and 602 earnings codes. The survey period is 5/16 – 8/15.
REMEMBER: The percentages of effort certified should reasonably approximate how an employee actually worked during a given period.
- Effort Reporting Section of SPA* Guide (*Section 8 of Sponsored Project Administration Guide)
Frequently Asked Questions
An effort report is the official document used by the University to document all effort, whether treated as direct or F&A, for sponsored agreements.
As a recipient of Federal contract and grant funds, NC State must comply with OMB Circular A-21. Because cost sharing is not identifiable in the financial accounting system, these costs are identified in TEARS. The effort report confirms how effort was spent on projects. The reports generated based on the effort report also are used in the development of the F&A cost rates.
Employees in the following circumstances are subject to effort reporting:
- Employees who work on sponsored projects for which the sponsor reimburses the University.
- Employees who work on sponsored projects but whose time on the project is funded by the University. The University’s contribution to the cost of the project is referred to as Cost Sharing.
- Employees who work in the Colleges of Agricultural and Life Sciences and Natural Resources and are funded from certain federal appropriations.
We are required to issue a separate summer effort report to capture and document summer work on sponsored projects from 5/16 through 8/15 that is paid directly (not included in the base salary for 9-month employees). This requires a signed statement that the work was performed and can be signed by the employee, principal investigator, or responsible official(s) using suitable means of verification.
The percentages represent only the amount of time spent working on sponsored awards during this summer time period. Any other work performed during this period will not be represented on the effort report.
If you do not certify your effort report, you will not be in compliance with OMB Circular A-21. The University is then at risk of losing existing and future funding from sponsoring agencies. We are also required to report to University of North Carolina General Administration (UNCGA) on effort reports that are not certified.
Employees should certify their own reports, but in unusual circumstances Deans, Department Heads and designees can certify for others. One person should never certify for the entire unit. As the employee or designee certifying the effort report, you are certifying that the information on the report is an accurate representation of the percentage of actual effort expended during the reporting period. Certifying an effort report that is inaccurate or incomplete is unlawful and could result in legal and/or disciplinary action up to and including dismissal.
The cost sharing set-up is for the period of time the cost sharing is anticipated to occur. The effort report is for an entire survey period based on whether the employee is a 12-month or a 9-month employee. The percentage indicates the percentage of time of the entire survey period for the specified categories on the effort report.
If the survey period on the record is a short survey period (i.e. less than the full survey period), then the system will perform a calculation to equate the short period to the equivalent of its percentage of the total survey period.
When the system calculates the cost sharing percentage for the effort, it is being calculated based on the cost sharing set-up percentage from the set up form multiplied by proportionate number of days the cost sharing set-up represents of the entire survey period.
Cost Shared Effort
The “from” account or “funding account” is the project that is actually funding the cost sharing. The “to” account is the ledger 5 project that is actually being worked on by the individual.
Cost Sharing reports are created after each payroll has been processed. If you completed the Cost Share set-up after the biweekly or monthly payroll lockout date, the updated information from the set-up will be reflected on the next cost share report. An email notice is sent to all TEARS Coordinators when the reports have been created for each payroll.
The set-ups need to be deleted and reentered. When you go into the system to create the new cost sharing record, the employee’s record should reflect the new employee type. If the record is not recreated, it will not show up on the employee’s effort report.
Cost sharing should be entered at the beginning of an award and updated as needed.
The TEARS Cost Sharing Set-Up Form must be used to establish cost sharing percentages in the effort reporting system for:
- Employees working on sponsored projects but whose time in the project is funded by a non-sponsored project.
- Cost sharing performed in order to maintain committed levels of effort on sponsored projects.
- Cost sharing performed in order to meet committed dollar amounts or % of award amounts.
- Any award where there will be direct charges associated with an individual (travel, tuition, etc.). To determine if exceptions to “Post-Award Cost Sharing” have been met, go to http://policies.ncsu.edu/regulation/reg-10-05-15
The purpose of the TEARS Cost Sharing Set-Up Form is to establish cost sharing percentages in the system before effort reports are printed so that the anticipated percentages are reflected on the effort reports. Additionally, cost sharing set-up forms must be in the system in order for the cost sharing reports (monthly or otherwise) to be accurate.
An after-the-fact memo must document cost sharing by EPA 9-month faculty during a summer period and bi-weekly paid employees. After-the-fact memos documenting cost sharing must be submitted to the Office of Contracts and Grants.
Cost sharing is the portion of total project costs not borne by the sponsoring agency. It is the realization that all of the project costs may not be absorbed by a single funding source.
Cost sharing represents resources provided by other funding sources that directly benefit the sponsored projects. In most cases the cost sharing source will be from University Funding.
Cost shared effort is defined as work performed by employees on sponsored projects that are not paid by the sponsor. (In other words, cost sharing on sponsored projects for employees who work on the sponsored project, i.e. the salary is funded by the University or by some other funding source.) Cost shared effort should be included on the effort report as it is a component of the total effort that an employee works.
The following situations involving cost shared effort cannot and should not be documented on effort reports:
- Cost sharing funded by another sponsored project.
- Cost sharing funded from federal appropriations.
- Cost sharing performed by bi-weekly paid employees.
- Cost sharing performed by 9-month EPA employees during the summer period May 16 through August 15.
In each of the above cases, an after-the-fact memo is required to document this type of cost sharing. See After-the-Fact Cost Sharing Guidelines for more information.