Effort, Space and Indirect Costs: An Overview

Presenter: Brenda Harrell Assistant Controller Cost Analysis, Finance & Accounting

Objectives

• Provide an overview of effort, space allocation and F&A rate.

• Discuss managing and tracking commitment. • Evaluate the effect of cost transfers on the

accuracy of effort reporting data. • Explain the effect effort reporting has on state

funding as it relates to Instructor Research Data (IRD) file.

The Basics…

• Effort Reporting – Report on how UF faculty

and staff spend their time on a particular activity including instruction, research and service.

– Total effort for an employee must equal 100%.

– Certifies that direct labor charges allocated to sponsored research projects are reasonable and reflect work performed.

The Basics…

• Space Allocation – Space reports are used to

develop UF’s Facilities & Administrative (Indirect Cost) rate proposal to the federal government.

– The STARS system and the effort system do not communicate. However, there must be a “space to base” match and the activities reported in effort must by accounted somewhere in space.

– Effort and space is not a one to one match.

The Basics…

• F&A Rate – F&A costs are real

costs that provide reimbursement for actual institutional expenses that support extramural activities but cannot be directly charged to a grant or contract.

How It All Flows…

Effort Reporting

• Effort Reporting – Coherent accounting of effort which should be

internally consistent so that, if asked, faculty can explain how they estimate the effort they spend on each activity and how the sum of these equals 100% of their effort for the reporting period.

Commitments

• What is a Commitment? – An obligation that a principal investigator has

made to a sponsor to do the work proposed.

• Why do we track Commitments? – Verify that the PI is not overcommitted – Sponsor is getting what they are promised – Federal guidelines

• Effort drops less that 25% • Leave of absences

Meet Professor X…

• Professor X is a faculty member of the College of Medicine.

• Currently: – Instructs two courses – Lead PI for 3 projects – Conducts offices hours

for her graduate students in office on campus

– Clinic Hours

What Does/Should Professor X’s Effort

Reporting Look Like?

Cost Transfers

• The effort reporting period is a good time to verify that all payroll transactions support the effort worked.

• However, after effort has been certified, any cost transfers affecting sponsored funding cause a recertification. – This is important because recertifying means the

previous effort is invalidated.

Test Your Knowledge!

• What happens if Professor gets a new award?

Answer: • Adjust payroll • Review other grant

commitments • Verify Professor X is

not overcommitted

Space Assigned to Professor X

Based on her activities, Professor X has been assigned the following space: • 5 research labs • 2 research labs service • 1 office • 2 classrooms

Test Your Knowledge!

• Based on Dr. X’s activities reported on effort…how would you allocate one of the research labs assigned to her?

Answer: Most likely the research lab will be allocated to some type of research not the other activity that is listed on the effort record.

Test Your Knowledge!

• Based on Dr. X’s activities reported on effort…how would you allocate the office space? Answer: Typically, all activities reported in a faculty’s effort takes place in some form or another in his/her office. Professor X writes project reports, prepares her syllabus, and meets with students in her office. The allocation of her office space could mirror her effort.

Instructor Research Data (IRD)

• The IRD file is a report submitted to the state to identify how much the University spends on delivering courses.

• Effort Reporting is a key element in this report because – Effort allocated to instruction is used to determine

how much salary dollars support a specific course. – The state could potentially reduce appropriation

dollars if the cost of the overall course is less than what was proposed.

Test Your Knowledge!

• How do lump sum payments affect the IRD?

Answer: There is no payroll accounted for lump sum payments even though effort is being allocated.

Connecting the Dots

• Why are we concerned with Effort and Space Reporting? – Follow federal guidelines – To meet the state statute – Could mean more/less funding

for the University

Questions?

• Thank you!