(Note:  This Important Notice is being sent to Fiscal Officers, Chairpersons, Deans and Chancellors.  Please forward to others who have a need to know.)

The U.S. Office of Management and Budget Circular A-21 require personnel activity reports (effort reports) for employees who fit certain criteria.  To meet this requirement, Indiana University has chosen the after-the-fact method of accounting for effort which provides a record of the percent of effort committed to each project/account.

Contract and Grant Administration (C&G) is responsible for generating effort report documents for all employees who received full or partial compensation or are cost shared on a sponsored agreement for the reporting periods specified below. 

Each effort report gathers payroll data from the Financial Information System (FIS) labor ledger for 100% of the employee’s regular compensation (which excludes activity for overloads and supplementary compensation, such as lectures or consulting). This payroll data is pulled into the FIS effort report document, where it is converted into percent of effort.  Based on the employee’s distribution of pay across accounts, the document lists effort across these accounts.

Effort reports are normally processed 30 - 45 days after the close of the reporting periods listed below.  Once the effort reports have been generated for a reporting period, salary expense transfer documents may not be initiated.  Salaries for that period may only be changed through effort reports.     

Effort report documents route in the FIS to the primary account delegate, fiscal officer, or the designated official that has the responsibility of verifying that the work was performed.  Confirmation of the work performed by the employee during the period can be approved by the employee, principal investigator, or responsible official(s) using suitable means of verification that the work was performed.  If the FIS approver does not have means to substantiate verification, the document may be ad hoc routed for further approval or printed and signed by a person who can verify the effort.  The signed copy, retained at the department, acts as authorization for the approval of the FIS document.   

Occasionally, departments will need to make changes to the allocation of effort among the accounts.  Corrections to the distribution of effort, including distributing cost share, must be made prior to approving the document.  If changes have been made, an automatic salary transfer will be generated upon final approval of the document, to ensure that the distribution of pay matches the distribution of effort.  A full explanation of why the correction is being made must be placed in the document note screen.  The explanation should include justification that the person was actually working on the project.  Justification of “to correct error” or “to transfer to correct project” are unacceptable.   

Effort reports should be reviewed, corrected and approved within 30-45 days after initiation.  C&G will generate a list on a quarterly basis to identify the outstanding reports. 

Approved effort reports may be recreated with valid justification.  Recreates of effort reports, however, are indications of poor internal controls and are heavily scrutinized by C&G and auditors.  As such, recreates should be limited to the current fiscal year.  If a change is required outside the fiscal year, C&G retains the right to request further justification from the project director or appropriate knowledgeable person concerning the late change of effort.  Disallowances due to discrepancies on the effort reports are the responsibility of the department and will be paid from the appropriate departmental general fund account. 

Questions regarding effort reports may be directed to Contract and Grant Administration.

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