Labor Verification on Sponsored Projects
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1 Financial Policies Training: Labor Verification on Sponsored Projects (2.1.21) (formerly Effort Reporting on Sponsored Projects) Effective Date: July 1, 2009 Revision Date: March 11, 2011
2 These PowerPoint slides are intended for training purposes. In the event of any discrepancy or interpretation difference between the policy and the slides, the policy dictates.
3 Effort Reporting on Sponsored Projects Agenda Background Information Definitions Accounting for Effort at UC Labor Verification Statements (LVS) What they are How they are verified Process for corrections/changes Signatures Roles and Responsibilities Resources
4 Background Information Labor Verification (or Effort Reporting) Required once per academic period by federal regulations (Federal Office of Management and Budget Circular A-21) Verifies that labor charges to federal projects are reasonable and reflect actual work performed Managed at UC through the Labor Verification System
5 Background Information Policy (Labor Verification on Sponsored Projects) Addresses UC s effort or labor reporting through the Labor Verification System Applies to all individuals whose salaries are charged to sponsored projects (in whole or in part) OR cost share involved in certifying the effort of others Applies to the employee s total institutional base salary
6 Definitions Institutional Base Salary (IBS) Compensation paid by UC for university activity such as research, teaching, administration Includes Regular salary wage types (e.g., 0FAC, 0SAL, 1HRS) Administrative stipend (0ADM) Does not include Bonuses, additional salary (ADL), awards Compensation from sources outside the university (See LVS instructions and policy for more details)
7 Effort and Total Effort Effort is Definitions the proportion of time spent on professional activities such as teaching, research, administration and service Total (university) effort is all duties performed for UC and compensated through the UC payroll does not include VA, corporation, practice plan effort
8 Examples Included in Total Effort Sponsored research Departmental/university research Instruction Administration Proposal writing Committee work Institutional community service Professional organizations Excluded from Total Effort Outside consulting Individual community service VA compensated activities Clinical service for practice plans
9 Definitions Labor Verification Method of documenting the proportion of effort on a sponsored project as a percentage of total effort compensated by the university Verifies work performed on sponsored projects Each sponsored project verified separately Cost sharing also verified
10 Accounting for Effort at UC Method: After-the-Fact Effort Reporting Initially distribution of salaries/wages is based on an estimate of planned effort (CD-PCR) Effort on a particular project is estimated as a percentage of total effort paid by UC An amount over a sponsors limit on annual rate for salary reimbursement should be treated as cost share in the payroll system Total effort must be expressed as 100% (not hours) for each period even though the number of hours may vary from month to month GCC produces/distributes Labor Verification Statements (LVS) quarterly for the previous period LVS - after-the-fact confirmation of actual effort worked and paid through UC payroll
11 Labor Verification Statements What they are (LVS) After-the-fact confirmation of actual effort Generated/distributed to BAs quarterly by GCC Must be certified as correct Appropriate signatures required Must be returned within 45 days of receipt to GCC
12 Labor Verification Statements (LVS) How they are verified Compare dollars and effort on LVS to what is shown in grant proposal budget If discrepancy in effort is greater than 25% Consult with SRS (Sponsored Research Services); some sponsors require prior approval if an effort decrease by more than 25% Compare LVS and UC Flex Labor History (LH100E) If signatory agrees with effort shown, LVS is accurate for signing
13 Labor Verification Statements (LVS) Process for corrections/changes DO NOT SIGN an inaccurate LVS Indicate correct amounts/percentages Initiate a PCR, as well as a CTR, if necessary, to change labor distribution Return corrected, unsigned LVS to GCC; request new LVS once PCR is processed Certify and sign new LVS; return accurate, signed LVS to GCC
14 Labor Verification Statements Signatures (LVS) General Rule: must be signed by the employee or someone with firsthand knowledge of the effort May not be signed by a business administrator PI s must sign Their own LVS LVS of part-time faculty, students, staff or a full-time faculty member who left UC Full-time faculty (non-pis) must sign Their own LVS
15 Labor Verification Statements Signatures (cont.) (LVS) Department Head can sign for PI who left UC Signatory on sabbatical or sick leave A faxed, signed LVS is acceptable Multiple signatures needed (multiple sponsored projects) Ee s department responsible for forwarding Knowingly signing an inaccurate LVS Violation of university policy Potential civil and/or criminal fraud
16 Roles and Responsibilities Accurate and Timely Submission of LVS Principal Investigators, Business Administrators, Department/Unit Heads, Sponsored Research Services Government Cost Compliance For specifics, review This policy, , Effort Reporting on Sponsored Projects The instructions that accompany LVS mailings Other policies on: ( ) Effort Commitment on Sponsored Projects (2.1.20) Allowability, Reasonableness and Allocability of Costs for Sponsored Projects (2.1.22) Cost Transfers on Sponsored Projects (2.1.23)
17 Roles and Responsibilities Training and Timely Certification of Effort All responsible for LVS must attend effort training Consequences of not attending training or certifying LVS within required time Potential postponement of pending proposals Potential disciplinary action Potential reduction in F&A return May prompt federal audit scrutiny
18 Resources Labor Verification on Sponsored Projects (2.1.21) ( ) GCC website ( Effort Commitment on Sponsored Projects Policy (2.1.20) Labor Verification Statement Instructions Glossary LVS Frequently Asked Questions IBS Frequently Asked Questions Questions? Contact Janet Brown at or by at brown2jt@uc.edu
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