Policy 2112: Effort Reporting

Subject Area: Sponsored Awards
Responsible Office: Financial Services
Sponsor: Associate Vice President for Finance
Originally Issued: February 1995
Revised: October 2015
Refer Questions To: Christine Sorensen, 773-702-2398

Purpose:  To ensure compliance with Office of Management and Budget Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, 2 CFR Chapter II Part 200), also known as "Uniform Guidance", and other regulatory policies regarding compensation for personal services charged directly or indirectly to sponsored projects.

The University plans to implement new documentation standards and internal controls for updating cost allocation to replace the former Effort Reporting policy and procedures.


The Compensation for Personal Services – Payroll Verification policy and procedures will be based upon the following principles:

A.  Salary and wage distributions to sponsored projects should reflect an individual's workplan, whenever possible, and should be recorded on the cost allocation of the individual in the WorkDay system.

B.  Individuals' sponsored project workplans should be monitored throughout the life of an award. Retroactive and prospective changes to cost allocation should be made in a timely manner to reflect changes in the individual's workplan.

     a.  Changes to costing allocations should be documented with adequate support when:

          i.     New or modified award is received

          ii.     Change in personnel assigned to the project

          iii.     New responsibilities of the individual

C.  Institutional Base Salary (IBS) is defined as the annual compensation paid for an individual's appointment (9 or 12 months), whether that individual's time is spent on research, teaching, administration, or other activities.

     a.  IBS does not include payments from other organizations or income that individuals are permitted to earn outside of their institutional responsibilities, such as consulting.

     b.  IBS rate must be used as the base salary on all grant proposals. For payroll verification purposes, total institutional effort is 100% effort, regardless of the individual's appointment (e.g., 0.5 FTE, .625 FTE, 1.0 FTE).

     c.  No individual may commit more than 100% institutional or summer effort or be compensated at a rate that would exceed their annualized IBS.

D.  On a regular basis, payroll charges of individual's workplan will be reviewed and all necessary adjustments will be made such that the payroll charged to an award is accurate, allowable and appropriate allocated in relation to the work performed on the award.

     a.  An annual statement will be signed by the principal investigator or designee, using suitable means of verification that the payroll charges are reasonable in relation to the project effort.

Financial Services is responsible for establishing procedures necessary to comply with the compensation for personal services - payroll verification requirements imposed by awarding agencies. Refer to the FY15 Payroll Verification Process slides, which are available from Financial Services, for the complete set of procedures during the transitional period.