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Effort Certification and NIH Salary Cap

As a recipient of federal funds, the University must accurately report time spent on sponsored activities. This committed time is known as effort. Effort certification is the verification process that the committed effort on a sponsored activity meets deliverables.

Effort certification ensures accurately charged expenses incurred for salary and wages to the sponsored project. It is mandatory for all employees who receive payment from a sponsored project to certify their own effort. If an employee is unable to do so, the Principal Investigator (PI) or their designee must certify their effort using appropriate verification means to confirm that the expended effort.

As a condition to receive federal funding, the University must maintain accurate records supported by a system of internal control. The system provides reasonable assurance that the charges are properly allocated, allowable, and accurate. These records should reflect the total activity for employee compensation, encompassing both federally assisted and all other compensated activities on an integrated basis. The total percentage of effort should not exceed 100% of the Institutional Base Salary. To comply with this requirement, the University has established a system for reporting the percentage of time (i.e.., effort) that employees devote to federally sponsored projects.

Effort Reporting

EFFORT CERTIFICATION RESETS

Effort Resets
  • Submit effort resets via e-mail to SPA at spa@uthsc.edu along with a valid reason or explanation for the reset.
  • Back-up documentation is necessary to support the original effort certification.
Documentation
  • If the employee cannot certify their own effort, their immediate supervisor or the departmental administrator must certify with the appropriate documentation and maintained within the department.
  • Employee can give permission to their immediate supervisor or their departmental administrator by email, indicating the percentage of their effort spent on a particular project. This email serves as their certification document.
  • Provide the employee with a printed copy of their effort report prior to certification, and have them review, note any changes, and sign the form.
  • The certification of effort cannot be solely based on the proposal without proper verification, which is not acceptable.
Effort Certification

OSP highly encourages Monthly certification. Submit effort through the IRIS system or via the WEB for those without access to IRIS. Monthly certification of effort allows for accurate and up to date sponsored project billing.

At a minimum, submit effort certification at least once for the entire semester or within 30 days after the grant or contract end date.

NIH SALARY CAP

Each year since 1990 Congress has mandated a limit on the direct salary that an individual may receive under federal grants. The restriction also applies to subawards/subcontracts for substantive work under a federal grant or contract. The current NIH salary cap can be found on the NIH website: http://www.grants.nih.gov/grants/policy/salcap_summary.htm. The Issue Date on the Notice of Award determines the usable applicable salary cap.

An individual’s salary more than the salary cap is an unallowable cost and chargeable to a non-sponsored account. Departments are responsible for ensuring that salary charges do not exceed the salary cap on applicable grants. Each department must track the unallowable charged salary amounts to federal grants, subawards and contracts. If it is determined that corrections are necessary, complete a pay funding change to remove the unallowable amount and place it on a non-sponsored account. A Cost Transfer Explanation Form is necessary prior to the completion of this transaction. The Effort Reporting System must also appropriately reflect any changes to the salary distribution. The salary limitations must be adhered to and documented properly. 

The NIH Salary Cap Worksheet is to assist in calculating the appropriate percentage charged to the federal grants and contracts, and in determining the unallowable salary amounts. Complete this worksheet for any individual over the NIH Salary Cap and submitted with the Cost Transfer Explanation Form. Consider the following general principles when completing the worksheet.

  • The NIH Salary Cap is based on a 12-month appointment.
  • The salary cap applies to the total institutional base salary for an individual.
  • Immediately remove salary more than the cap which is unallowable to a non-sponsored account.
  • Add new grants and contracts to the spreadsheet.

Sponsored Programs conducts periodic reviews to identify those employees whose institutional base salary exceeds the federal salary limitations and prepares an NIH Salary Cap Worksheet each month for each employee over the salary cap. Departments receive notification when an individual’s salary on sponsored projects exceeds the prevailing NIH salary cap. Process corrections within 30 days of the departmental notification.

UTHSC NIH Salary Cap Worksheet (Quick Link)

Feb 23, 2024