Effort Reporting (TEARS)
IMPORTANT NOTE: This guide is a general reference and is not meant to be a substitute for our University policies & regulations. Be sure to consult the University’s policies and/or contact us.
The Connection: Cost Sharing and Effort Reporting
Why are we combining these two areas in one section of the SPA Guide under the broad title of Cost Sharing and Salary Management? Both Cost Sharing and Effort Reporting have specific purposes, regulations, and procedures, but both are part of many projects that we manage here at the university. Because of this dual presence in numerous projects, many of the procedures become intertwined, so it is best to review the concepts and required actions together.
Review the following brief introductory definitions before delving deeper into each topic:
- Effort Reporting: As part of federal requirements related to employees working on sponsored projects, our faculty must estimate, periodically review, and certify the percentage of effort they accrue on each project, whether their salaries are being paid by the sponsor or cost-shared by the university. Effort Reporting is covered in greater detail in the second half of this section.
- Cost Sharing: Cost sharing is the portion of project costs not reimbursed by the sponsor and may be in the form of cash or in-kind contributions. Cost sharing is most commonly required under federal grants and becomes a binding commitment once an award is made. The college/department is responsible for tracking and documenting the cost-share amounts throughout the life of the project. Cost Sharing is covered in greater detail in the first half of this section.
The Consequences: Common Mistakes in Cost Sharing and Effort Reporting
Pay particular attention to this list of common mistakes made at some universities and their potential consequences before you review the rest of this section.
Auditors in the House!
To put the Effort Reporting rules and procedures that you’ll be reviewing in this section into perspective, it may also help to know what to expect from an audit.
Here are a few important facts to keep in mind as you review the legal pad list on the right:
- State Auditors review effort report certification annually.
- Auditors from specific sponsoring agencies may review effort report certifications during audits.
- DHHS Auditors may review effort report certifications during any audit.
Audit reviews may include tests such as:
- Was certification completed by the deadline?
- Does certified effort match actual work?
- Do payroll charges support effort certified?
- Were payroll adjustments processed timely?
- Are there projects not listed on the effort report that should be?
Be sure to keep these facts in mind as you review the information in this important section of the guide.
Before reviewing the specifics related to Effort Reporting, you may want to watch this optional 48-second video from the National Council of University Research Administrators (NCURA). It is an introductory segment featuring a short commentary from another university representative sharing two concepts that matter most when it comes to understanding the basics of Effort Certification.(Take a moment before clicking the play arrow to grab your ear buds or adjust your computer’s volume up or down to listen in your work environment.)
Federal OMB Circular A-21 (Cost Principles for Educational Institutions), section J(10) states that we must have a method to document all effort for sponsored agreements, whether treated as Direct Costs or Facilities and Administrative (F&A) Costs.
A-21 also states that we must certify this effort after-the-fact. At NC State University we use the “Plan-Confirmation” method.
Using this “Plan-Confirmation” method means that:
- 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.
Federal regulations require that employees engaged in sponsored activities periodically review and certify their effort if they have the following:
- Direct labor charges to sponsored projects: Employees who work on sponsored projects and whose salary is funded by the sponsor.
- Cost sharing on sponsored projects: Employees who work on sponsored projects but their salaries are funded by an entity other than the sponsor (may be another sponsor, the university, or a gift or foundation account).
- Federal Appropriations: Employees who work in the College of Agriculture and Life Sciences and Natural Resources that are funded from certain Federal Appropriations or Ledger 4 funding.
- Survey Periods 7/1 – 6/30: This coincides with the University Fiscal Year.
- Survey period 5/16 – 8/15: 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 is identified by the 601 and 602 earnings codes (PDF). (See additional information on Summer Salary below.)
REGARDING BI-WEEKLY EMPLOYEES
Employees paid on a biweekly basis are exempt from effort reporting requirements because the time sheet that is completed and signed at the end of each two-week period serves as certification of effort. If there is a change in cost-share distribution, make sure that the time sheet reflects the change and it is:
- re-signed or initialed by the employee and supervisor, or
- the supervisor initials the time sheet if you cannot get both initials.
“Percentage” of Effort
REMEMBER: The percentages of effort certified should reasonably approximate how much an employee actually worked on a project during a given period.
To clarify this concept, you may want to view the following optional videos from the National Council of University Research Administrators (NCURA). Note that these NCURA videos are useful as additional references on our SPA Guide topics, but be sure to refer to our specific university policies, procedures, and contacts when making project decisions.
- Part 1: Three Mantras of Effort is a 3-minute segment that introduces some useful concepts when working with Principal Investigators (PIs) to estimate percentages of effort.
- Part 2: Talking With Your Faculty About Effort is a 3:44-minute segment going into more detail on discussing effort with a faculty member.
Part 1: Three Mantras of Effort
IMPORTANT NOTE ON PART 1 VIDEO CONTENT ABOVE: Remember that any hours that a faculty member spends on outside consulting (even if approved by his/her Department), is truly “outside the pie” (not compensated through NC State payroll) and should not be considered as a percentage related to his/her NCSU hours/effort.
Part 2: Talking With Your Faculty About Effort
Sponsoring agencies generally expect that key personnel on projects, i.e., Principal Investigators (PI’s), are either paid directly from funded projects or paid through other funds as part of a cost sharing arrangements on particular projects. (Exceptions to this expectation include equipment awards and Department of Defense (DOD) student training rewards.)
There are three types of PI direct salaries that can be charged to a sponsored project (listed below with #’s from expenditure accounts on HR personnel actions):
- Other Salaries – 51119
- Directly charged to a project instead of department funds
- Available department funds can be used only as lapsed salaries
- Release Time – 51118
- Defined as the time the department releases the PI from normal departmental duties (teaching, public service, research, etc.) to perform research
- Directly charged to a project instead of department funds
- Release Time can be returned to department to be used for non-salary funds (specific policies at the College/Department’s discretion)
- Summer Salary – 51116
- Directly charged to a sponsored project for a 9-month PI who works during the summer period, 5/16 – 8/15
NOTE: If Direct Salary is NOT charged on a project, we need to do one of the following:
- Obtain prior approval from sponsor if there is a reduction in effort
– OR –
- If effort was actually worked, document PI effort in TEARS
TEARS – The Employee Activity Reporting System
We use the TEARS system to report and certify our Effort on Sponsored Projects at the university. Click the PDF or Brochure format section of the image below to open and review this Quick Reference Guide for PI’s.
It is a good introduction to the basics and overview of the way we use the “Plan-Confirmation” method of Effort Reporting as described in the introductory segment above.
Cost Share and TEARS Set-Up, Monitoring, and Closeout
You are probably aware of your college’s procedures and “who handles what” related to TEARS cost-sharing set-ups, monitoring, changes, and effort certification. If not, be sure to check with other administrative staff in your college or department for the specifics. You may also want to check the TEARS Coordinator list if you are not aware of who handles the role of coordinator in your college or department.
Regardless of your role, if you did not review this checklist when going through the Cost Sharing segment above, be sure to review the checklist below or click either section to open this checklist as a PDF document to adjust the print size, print or bookmark for future reference.
Notice the three-column format that allows you to use the same checklist for any project – through set-up, ongoing, and close-out reviews.
TEARS System Access and Instructions for Certifying Effort
Review the following summaries and links that can also be accessed from the C&G site TEARS General Information web page.
TEARS Coordinator Instructions
The TEARS Coordinator instructions contain detailed instructions on Cost Share Set Ups, Cost Share Reports, Effort Reports, and Administrative Reports.
- TEARS Coordinators should complete Cost Share Set Ups when there is a cost share commitment or when effort is not being reimbursed by the sponsor.
- The Set Ups establish Cost Sharing in the system before Effort Reports are created.
- The Cost Share Set Ups are required for accurate reporting.
Effort Certification for PI’s
The annual deadlines for certifying Effort Reports are the same every year – September 30th for fiscal year effort reports and December 31st for summer effort.
Our employees receiving Effort Reports will automatically be granted access to certify their effort reports as an option under Employee Self Service in the MyPack Portal. They need Internet access and a Unity ID and password.
If they have forgotten their Unity IDs and/or passwords, or need other assistance with their network security, they should contact the ETSS Solutions Center at 515-4357 or by e-mail: email@example.com.
Access to Dean, Department Head, and Administrative/TEARS Coordinator security roles must be submitted through the Security Access Request System (SARS).
IMPORTANT NOTE: Remember that employees who certify Effort on research projects may be questioned by Auditors about all of their activities… including consulting activities and what constitutes a full teaching load in their departments.
PI Instructions for Certifying Effort Reports
Department Head Instructions for Certifying Effort Reports
IMPORTANT NOTE: If employees are unable to certify their Effort Reports, their Deans, Department Heads, or designees can certify for others. Remember, however, that whoever certifies the reports is held responsible for the action and should have first-hand knowledge of the effort being certified. One person should never certify for the entire unit.
Please review the following sample of an Effort Report.
Interpreting the Effort Report
Click the image below to open the related “Sources of Information” chart for review. If you work with these Effort Reports, be sure to open and review this chart for specific instructions on where to find the information needed to correctly complete the Effort Reports.
“After the Fact” Cost Share Documentation
We use an “After the Fact Cost Sharing Memo” for verification of cost-shared effort in two types of situations:
- Situations that cannot be documented in TEARS (as listed on the “Don’t” side of the image below)
- Regular Cost Shared Effort that was not entered into TEARS for a past fiscal year
For specifics on the two types of After the Fact memos and details on how to handle the Cost Share Effort reporting that is not entered in TEARS, click here for the C&G web page to review the specifics.
Keep the following in mind when reviewing Cost Sharing reports (sample below):
Monthly Cost Sharing Reports:
- If cost sharing is set up for a month and the funding source used is not funded (i.e., there were no earnings for that particular month) the monthly report will show $0.
- When entering multiple cost sharing set-ups for the same funding source, make sure there are enough dollars in the funding source for all cost sharing set-ups. The monthly report is referencing the funding source on a set-up-by-set-up basis, not overall.
- For a 9-month employee, on the monthly report only, we are annualizing the monthly amounts.
- For a 9-month employee, there is no monthly cost sharing report for those employees during the months of June and July because theoretically, they are paid from 08/16/XX – 05/15/XX.
- Therefore, cost sharing for the month of May (05/01/XX – 05/15/XX) and August (08/16/XX – 08/31/XX) may seem a lot smaller than it will at the end of the year.
- This is due to the way the calculations are handled (prorated) in different reports.
- Make sure that cost sharing dates reflect actual cost sharing. If a project ends on 03/15/XX, the set-up should reflect the 03/15/XX date.
- The monthly reports are static, reflecting only the amounts processed through that particular month (as of the payroll run date) and are not updated to reflect any subsequent redistributions. For example, if a redistribution is processed after the May monthly payroll was run and you run the May report in June after the redistribution was processed, the May report will not include the revised amount based on the redistribution since the monthly reports are not updated retroactively to reflect any redistributions.
Fiscal Year Cost Sharing Reports:
- If at the end of the Fiscal Year there was enough money in the funding source to fund the cost sharing, there will be a dollar amount for that project in the Fiscal Year Cost Sharing report.
- The annual reports are updated as changes are made to the effort report. When a change is made to an effort report an asterisk will appear on the report. The asterisk indicates that the dollar amounts may not agree with labor distribution. The asterisk will no longer appear once the next payroll has been processed, as long as any necessary payroll redistributions have been processed.