Research Affairs / 
Effort Reporting Primer


The institution receives millions of dollars from the federal government and other sponsors to support its research and educational programs.  The use of these funds is controlled by the sponsor's terms and conditions as well as regulatory requirements (federal and other government, private, and institutional).  These include a requirement that the institution identify, record, and report the effort that employees expend on all activities performed for the institution -- also known as Effort Reporting. 

Effort reporting enables LLU to document, report, and claim award funds for employee services and to demonstrate that committed employee performance on sponsored awards were performed.  Institutional requirements for effort reporting are outlined in LLUAHSC policy and procedure (H-08): Effort Reporting

The four stages of effort reporting are:

The Proposal Stage
Negotiating Award Terms
Setting up the Account

Managing the Finances of the Award


The Proposal Stage

In most cases, proposals must show the percentage of effort that the Principal Investigator and other personnel intend to commit to the project.  Here are some important things to consider in determining what effort to commit:

  • The percent effort committed to the project should be reasonable and accurately reflect the amount of time spent on the project vs. all other institutional responsibilities.  Therefore the PI must consider not only the level of effort necessary to complete the project, but also the level of effort necessary to complete other sponsored and/or non-sponsored research projects, teaching, clinical hours, and administrative activities. 
     
  • Federal regulations define total effort as being the amount of time one devotes to fulfilling ALL institutional responsibilities.  It is NOT limited to a specific number of hours.  For example,


Hours worked per week

Percent Effort (according to federal regulations)

40 hours on a sponsored research project

80% (not 100% based on a 40-hr work week)

5 hours on teaching

10%

5 hours on clinical activities

10%

total of 50 hours

total of 100%

Federal regulations prohibit using a 40 hour work week or any other specific amount of hours to calculate percent effort.  Rather, as shown in the example above, the percentage of effort assigned to individual sponsored projects must be articulated as the percentage of total effort necessary to fulfill all institutional responsibilities.  

  • Percent effort should correspond to the proposed salary:  For most awards, the percent effort reported for each person should be the same as the fraction of salary requested. If a proposal states that a researcher will contribute 10% of her time to a project during the first budget period, but her salary will not be charged to the award, then the PI’s department has committed to pay the cost of the dollar amount (i.e. cost share) equal to 10% of the researcher's salary, plus associated fringe benefits.  Voluntary cost sharing commitments should be avoided, unless required by the sponsor (i.e. mandatory cost sharing), because cost sharing:

    • legally binds the department/school to pay for part of the research costs, even if other grant funds become available;
    • increases the administrative burden on the PI's department/unit since it will be responsible for tracking/reporting shared costs if the sponsor makes an award;
    • causes the institution to forfeit the recovery of direct costs and also the recovery of associated F&A costs; and
    • is subject to audit.

If the PI and/or department head believe that cost sharing must be included, then s/he is urged to contact Research Affairs - Financial Management early in the proposal process for assistance in preparing the proposal budget.   Financial Management will require written approval from the PI’s chair, director, and/or dean for cost sharing commitments.

The institution must still account for actual effort to document both funded effort and committed unfunded cost sharing expenses. 

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Negotiating the Award Terms

After a proposal has been submitted, the institution and sponsor will sometimes negotiate a revised budget.  If the negotiated changes impact the effort commitments that were made in the original proposal, then the effort commitment changes should be formally communicated to the sponsor so that the original, proposed commitments are appropriately adjusted.

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Setting up the Account

When the institution receives an award, the accounting for actual effort and salary expenses begins.  There are three different accounting processes for salary expenses associated with committed effort:

  1. Committed Effort with salary funding: Salary expense is charged to a sponsored project account for the award that will be funded by the sponsor.  The percentage of salary charged to the account should be equal to the committed percentage of effort.

  2. Committed Effort without salary:  Salary expense is charged to a sponsored project account to record the committed cost sharing expenses of the award.

  3. Committed Effort without salary funding due to NIH salary caps:  Salary expense is charged to a non-sponsored account and is not separated out from other salary expenses.

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Managing the Finances of the Award  

Effort Certification

Federal regulations (OMB Circular A-21) require employees, principal investigators, or other responsible officials to sign a statement that certifies sponsored project and/or cost sharing salary charges.  The certifying signatures are a suitable means of verification that charges are reasonable in relation to the work performed on individual sponsored projects and all institutional responsibilities. 

Employees are required to certify that they performed a percentage of effort on sponsored projects being charged.  Each department has the primary responsibility of ensuring compliance with LLUAHSC policy and procedure (H-08):  Effort Reporting, and must forward the appropriate certification documents (see below) to Financial Management within 30 days after receipt.  Staff performing on sponsored projects are legally responsible for the accuracy of their effort reports. 

Specific guidance for complying with this requirement is described in detail on the Manage the Finances page of the Grants Guide.  Specifically:

See guidance for quarterly effort certification of LLU employees via Personnel Activity Reports (PARs)

See guidance for quarterly effort certification of NON-LLU employees (e.g. employees of Loma Linda affiliates such as Faculty Physicians and Surgeons, Loma Linda University Health Care, LLUMC, etc) via Affiliate Invoices and Effort Certification.

When Effort Changes

When actual effort decreases significantly (10% or more of total effort) from the original or revised commitment, the amount of salary charged to the sponsored project account must also be adjusted.  Approval from the sponsor might also be required if any personnel are planning to reduce effort or be removed from a project. 

Principal Investigators should immediately communicate such intended changes to Financial Management. Financial Management will contact the sponsor to determine if prior approval is required.

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