The document provides a detailed examination of institutional costing policies and the evolution of effort reporting mechanisms, focusing particularly on the context of research universities and federally funded projects. It discusses the drawbacks of traditional effort reporting systems, highlighting their inefficiency, administrative burden, and divergence from their original intent of verifying the reasonableness of salaries charged to grants. The proposal advocates for discontinuing mandatory effort reporting in favor of institutionally designed compliance-based approaches that maintain accountability while reducing administrative complexity. Universities would have the flexibility to retain existing systems or implement new models that meet federal accountability standards, emphasizing enhanced faculty productivity and minimized administrative burden without compromising oversight.
Additionally, the document outlines recommendations for updating federal policy, notably suggesting amendments to Circular A-21, Section J.10.b, and introducing a model payroll distribution framework. This framework incorporates preventive and detective controls, routine auditing, and clear lines of responsibility, aiming for system uniformity, comprehensive coverage, and integration of cost-sharing data. A comparative analysis between effort reporting systems and payroll certification systems, exemplified by the University of California’s practices, illustrates differences in focus, certification frequency, and administrative requirements. Payroll certification, with its annual review and focus on work performed rather than percentage estimates, is presented as a more streamlined and accountable alternative, especially in handling complex costing requirements such as NIH salary caps and special compliance needs. Overall, the document calls for a shift towards more efficient and effective accountability mechanisms in research administration.
