When the Award Budget is Less than the Proposed Budget

At the time of award, the PI, working with his/her department and Grant and Contract Accounting Office, should evaluate how the project could be conducted with reduced funding. The analysis should include consideration of the impact on effort commitments. Sponsor approval of a revised budget may be required if the terms of the final agreement do not address the reduced funding commitment. The individuals involved in this discussion should also consider what, if any, cost sharing implications would exist if the award is accepted, as this cost share would need to be reflected on the effort certification forms.

Cost Sharing

Cost sharing describes the portion of the cost of a sponsored project that is allowed by the University rather than by the external sponsor. One example of cost sharing is where some or all of an individual’s effort is expended on a specific sponsored project, as a requirement of the award, but not funded by the external sponsor. Another example would be where a portion of the compensation for an individual’s effort exceeds a salary cap imposed by the sponsor, such as the National Institute of Health. The effort, not paid for by the sponsor, should be reported as cost sharing and it would appear on the effort certification report in the “Cost Share” column. Any such cost sharing time so identified should be reviewed for accuracy as part of the review of the overall effort identified in the certification report. A numeric example of cost sharing would be as follows:

Dr. Smith proposes and is awarded a research grant which requires a 25% effort commitment, but only funds 15%. The 10%, unfunded by the sponsor, represents the additional cost sharing amount that must be reported.

The Top 10 Things a PI (and Others) Should Know About Effort Reporting

1. Effort is your work on a project, whether the sponsor pays your salary or not.
2. When you write yourself into a grant proposal, you are committing your effort to the sponsor.
3. If you reduce your effort, paid or unpaid, on a federal grant by 25% you must have agency approval. If you reduce your paid effort, you    may choose to document cost-sharing so that the total effort does not decrease.
4. Many activities cannot be charged to a federally sponsored project. For example:
• Time spent writing a proposal
• Serving on an IRB, IACUC or other research committee
• Serving on a departmental or university service committee
5. If you work on a sponsored project, you MUST certify your effort.
6. Certifying effort is NOT the same as certifying payroll.
7. Certifying effort must reasonably reflect all the effort for all the activities that are covered by your University compensation.
8. Effort is not based on a 40-hour work week. It is not based on hours at all.
9. Effort must be certified by someone with suitable means of verifying that the work was performed.
10. Timeliness of effort certification is paramount. Auditors look for effort reports that are NOT certified in a timely manner - typically within 30 days after being sent out for certification.