[Auto-generated transcript. Edits may have been applied for clarity.]
Welcome and thank you for joining this module on Effort Commitments.

My name is Maria Soliman. I'm the director of Grant Accounting.

In this session we'll talk about what effort means in the context of sponsored projects.

However commitments are established and how they connect to salary charges.

We'll also highlight key sponsor and institutional roles so you can recognize when a change in effort requires an action or prior approval.

Here are our objectives and key roles.

By the end of this module, you should be able to define effort and effort commitments, align effort commitments with payroll distribution,

apply sponsor and institutional roles when effort changes.

People central to this process are the Principal Investigator, the department administrators and departmental staff, and Grant Accounting.

Each of these roles has specific responsibilities and coordination among them is critical to keeping our sponsor programs compliant and audit ready.

Effort is a portion of time someone spends on their institutional activities, expressed as a percentage of their total activities.

100% effort includes all compensated duties including: research, teaching, administration, clinical work, and others. Not just a 40-hour week.

The Regulatory Foundation is found in 2 CFR 200.430,

which requires internal controls to give a reasonable assurance that salary charges are accurate and properly allocated to awards.

The golden rule is that federal awards must be charged for the actual work performed, not what was budgeted.

We demonstrate this compliance with this rule through effort certification,

which confirms that salary charge to awards reasonably reflects the work done.

Effort Commitments are usually set at the proposal stage and become binding,

once an award is made.

Total effort again is 100% and must cover all compensated activities and is always expressed in the percentage, not hours. Within that 100%,

we distinguish between direct effort which is paid by the sponsor, and cost share effort,

which is then committed but not charged to the sponsor, but paid through institutional resources.

Recognizing both types is important for budgeting, reporting, and ensuring we meet both sponsor and institutional promises.

There should be a clear link between an individual's effort commitment and how their salary is charged. At the start of the budget year.

Payroll distributions are usually based on expected effort, which was what was committed in the proposal or the Notice of Award.

Salary distributions should start when the actual work on the project begins, not before or significantly after.

If actual effort differs meaningfully from the original plan by 3% or more,

then the salary distribution needs to be adjusted so charges match the work that was actually performed.

This is where good communication between the PI, the department, and Grant Accounting is essential.

Effort almost never stays perfectly static over the life of the award, so managing changes is a big part of compliance.

Many sponsors apply what we call the 25% rule.

If a PI or key person's effort is reduced by 25% or more from the committed level,

prior written approval is required. During a no-cost extension period.

NIH expects to see measurable effort.

Measurable effort, as defined by the University of Iowa, is at least 1% and should be charged for all PI key personnel.

Other sponsors may have this same requirement.

Overall effort commitments must be met across the full performance of the award, including any no-cost extensions;

not just during the original budget year.

Related to changes in effort is the concept of disengagement.

Disengagement generally means either being away from a project for more than three months,

or reducing time and effort on the award by more than 25% than what was originally committed.

Either of these situations is treated as a change in key person status, and requires prior approval and a change in reporting requirements.

Summer only PI effort can be acceptable when a PI truly only performs work in the summer, still meets the annual committed effort,

and the project does not depend on any academic year presence for scientific work or mentoring.

The key is that the pattern of salary and effort must reflect when the work is actually done.

Beyond general effort roles, we also have agency specific salary limits. For NIH,

the salary cap means salary charge NIH awards cannot exceed the executive level two rate.

This rate changes annually, so it's important to check the current guidance.

NSF has a two month rule generally limits salary compensation for senior personnel

to no more than two months of their regular salary, per year, across all NSF awards,

unless the sponsor explicitly approves more. Career development awards, such as pay,

awards are often required to have a minimum level of effort, commonly 75%.

So appointments and salary distributions should be set up to meet those minimums.

For faculty,  on a nine month academic year appointment, effort is structured around that nine month period, even though the pay may be spread across 12 months.

Funding on sponsored projects during the academic year is based on the actual effort during those nine months.

When a proposal budget is stated in calendar months

That effort is generally considered part of the academic year appointment,

unless the budget justification or sponsor template clearly labels it as summer effort.

Summer effort covers the three months outside the academic year.

Typically mid-May to mid-August. Again, salary should be charged in the period when the summer work is actually performed.

A common pitfall is charging one full month of summer salary while the work is actually performed over the entire summer.

That implies that 100% of the summer effort is for that single project in that single period of time.

To be compliant summer salary should reflect the portion of summer actually spent on the project,

and the proposals should be clearly labeled as summer salary in the budget and the sponsor template.

There are a few recurring patterns that raise red flags.

First, faculty rarely have 100% effort on research grants because they usually have other responsibilities such as teaching,

proposal development, or service. So appointing them 100% to sponsored projects is not realistic.

And a red flag.

Second, using budget estimates as the final basis for salary charges is not acceptable.

Salary distributions must be supported by after the fact actuals, which then flow into our effort report for certification.

Third, late salary corrections are a risk.

Sponsors expect corrections to be made within 90 days, and changes after that will be questioned and likely disallowed,

especially when it appears they are there to just clean up or spend out the dollars.

To stay compliant. Here are three practical habits that will make a big difference.

First, monitor your salary charges on a monthly basis as part of your reconciliation process

and compare them to the work that you know is actually completed.

Second, maintain documentation for effort changes, especially those that need sponsor approval.

So there is a clear record of what changed when and why.

And finally, communicate. Investigators should alert their business office or HR officers when there is a significant change in their activities,

and the department may want to check in several times a year to make sure appointments and distributions still make sense.

This slide highlights key resources.

The Grant Accounting Office website is a central hub for institutional policies, guidance, and tools related to charging salary and wages to sponsored projects.

What we've covered today is an overview. Those resources can help you drill down into specific questions.

As we wrap up, I want to emphasize that your role, whether you work in a central office, in the department, or part of a research team,

is critical to safeguarding our research enterprise.

Accurate, timely charging of effort is an important part of that stewardship.

Grant Accounting is here to support you, so please reach out whenever you encounter questions or unusual scenarios.

Thank you for your time and everything you do to support a compliant, high quality research environment here at the University of Iowa.