FAS Research Administration Services

Monthly Salary Certification Policy and Procedures

Faculty of Arts and Sciences Financial Office
Harvard University
Series: Sponsored Programs
Policy Title: Monthly Salary Certification
Effective Date: January 1, 2007
Monthly Salary Certification Policy and Procedures
Revision Date: October 16, 2008
Responsible Offices: FAS Research Administration Services

Contents

  1. Policy Summary & Purpose
  2. Policy Statement
  3. Roles and Responsibilities
  4. Procedures
  5. Contacts

    Further Information

I. Policy Summary & Purpose

The federal government requires that salaries of personnel paid fully or partly from federal sponsored awards be "certified" in a process that is distinct from appointment and payroll procedures. According to federal regulations, salaries paid must be commensurate with effort expended. This policy governs the process of certifying the salaries and effort of non-faculty employees on federal sponsored funds.

II. Policy Statement

Section J.10 of Office of Management and Budget Circular A-21, Principles for Determining Costs Applicable to Grants, Contracts, and Other Agreements with Educational Institutions, requires that institutions incorporate into their payroll distribution systems a method for verifying that the work for which an employee on a federally sponsored project was paid was actually performed. This payroll certification process is known more generically as "effort reporting." Since salary and fringe benefit charges typically amount to 60% or more of sponsored expenditures, the Government has elevated its scrutiny of institutional effort reporting systems and practices dramatically in recent years, as reassurance that federal dollars are being spent responsibly.

Circular A-21 does not mandate particular procedures for salary certification, but it does require that:

  • Salaries paid must "reasonably reflect the activity for which the employee is compensated by the institution..."
  • An "after-the-fact confirmation" of activity must be performed, so that the certification is based on actual, not proposed, costs.
  • Activities must be "confirmed by responsible persons with suitable means of verification that the work was performed."
  • Pay must be allocated proportionally among multiple activities in which the employee is involved.
  • Salary certification "may reflect categories of activities expressed as a percentage distribution of total activities," since different institutions define a "full workload" differently.

To comply with these guidelines, the FAS has adopted three separate salary certification programs, one for faculty, one for research associates and other academic appointees, and one for all other employees. The certification process for faculty is carried out annually, using the FASERS application. Certification for research associates and other academic appointees is done on paper, also annually, typically in the fall. Certification of salaries for all exempt staff, non-exempt staff, graduate research assistants, postdoctoral fellows, etc. whose salaries are supported in whole or in part by federal funds is carried out monthly, according to the procedures described here.

The Principal Investigator (PI) of each sponsored project bears the ultimate responsibility for spending awarded funds appropriately, and he or she is uniquely qualified to certify the effort of his or her employees on that project. Every month, he or she must review the printed salary certification form for each of his/her grants and certify that:

  • each person paid by a federal sponsored project devoted the indicated proportion of his or her time and effort to that project,
  • the work occurred during the indicated time period, and
  • any transfers of salaries to that project reflect the actual effort performed by the employee on that project.

In almost all cases, the PI is the most qualified person to certify the effort of the employees on his or her grants, and therefore the PI must sign the certifications himself or herself. Only in those rare cases in which the PI is not the most qualified person to certify his/her employees' effort (for example, extended travel outside the country, or ongoing supervision by another faculty member in another department or school) may he or she delegate this responsibility to some other individual who has daily first-hand knowledge of the research activities and the efforts of the individuals associated with a sponsored project. That designee must be able to defend the salary allocations made. Signature-delegation authority must be requested by the PI in writing via a letter to Patrick Fitzgerald, Associate Dean for Research Administration, 1414 Massachusetts Ave, Cambridge 02138. Note that Laboratory Directors and other departmental administrative staff do not normally have sufficient first-hand knowledge of research personnel activities to defend salary allocations to federal or other auditors, nor is it appropriate for a non-PI researcher to certify his or her own salary report.

The monthly salary certification form consists of two sections, one for direct payments to staff and one for journal transfers correcting previous transactions. In the direct-payments section for each grant, the "Salary" column contains the actual amount paid to each employee, and the "% of Month" column shows the percentage of the employee's pay that came from the grant. Since we are only required to certify salaries on federal awards, there is no requirement that the effort percentages for an employee total 100%. Note that these percentages are based on total compensated effort, not on any standard number of hours per week or per month. Note too that Circular A-21 allows for a certain amount of flexibility in employees' actual time commitments – small variations in effort from month to month can be tolerated without modification of the salary paid.

Since auditors consider frequent salary transfers at an institution to be an indication of poor grants management, it is best to place salaries correctly on each grant, and to minimize the movement of people among different grants. Administrators responsible for appointing staff are encouraged to meet with PIs on a regular basis, reviewing project assignments and funding sources prospectively for each employee and correcting appointments to ensure that salary transfers are not needed in subsequent months. In the event that a transfer is necessary, it is good practice to annotate both the current and the prior month's certification forms to explain the circumstances that led to the transfer. Note that all transfers of salaries onto federal sponsored awards must comply with Harvard's Cost Transfer Policy.

Important Note: Several of our sister institutions have undergone audits and investigations by federal agencies recently, with a particular focus on effort reporting. In some cases, severe financial penalties and funding disallowances have resulted. To minimize Harvard's exposure in the event of such a visit to our campus, we need to comply with this Policy in all of its aspects, with a participation level of 100%. Anyone with responsibilities for any portion of this Policy (see Roles and Responsibilities below) who has questions or concerns about the Policy should address those concerns immediately to Nuala McGowan (nmcgowan@fas.harvard.edu, 5-7681). Cases of non-compliance will be referred to the Dean of the FAS and may result in delays in activation of subsequent grant accounts.

III. Roles & Responsibilities

  1. The Principal Investigator is responsible for instructing the Head Administrator (or his/her designee) as to the correct sources of funding for each employee on federally funded projects, for reviewing appointments and funding sources with the Head Administrator or designee frequently, for ensuring that the percentages of salary paid from each source of funding for an employee reflect accurately the percentages of effort expended on those projects, and for certifying monthly that salary expenses charged to each federal award reflect appropriately the work actually performed.
  2. The Head Administrator (Laboratory Director, Center Executive Director, Department Administrator, etc.) is responsible for ensuring that employees on federal sponsored funds are appointed and paid using the sources of funds specified by the Principal Investigator, for ensuring that a designated administrator meets regularly with the Principal Investigator to review assignments of employees to projects, for ensuring that monthly salary certification forms reflect accurately the source(s) of funding for each employee on federal sponsored funds, and for appointing an Effort Coordinator for the department or center.
  3. The Effort Coordinator is responsible for printing the monthly salary certification forms from CREW after the financial close of each month, obtaining the Principal Investigators' signatures on each form ordinarily within 30 days of that financial close; ensuring that the salary certification forms are signed and dated by the Principal Investigator named on the form or by an authorized designee (letters of authorization detailing these individuals as designees require the approval of the Assistant Dean for Research Finances and Systems, as highlighted above); filing and retaining signed forms for the requisite retention period, and submitting quarterly reports to the FAS Research Administration Services summarizing the collection of signed certifications.
  4. FAS Research Administration Services is responsible for providing training and education on certification policies and procedures, for overseeing the monthly salary certification process, for soliciting and filing quarterly summaries of collection of monthly certification forms by department and center Effort Coordinators, for ensuring that FAS Principal Investigators, Head Administrators, and Effort Coordinators follow this Policy and the external regulations mandating it, and for interfacing with any auditors seeking information about this Policy.

IV. Procedures

Within each budgetary unit, an Effort Coordinator should be designated (see Roles and Responsibilities above). That Coordinator should:

  • Print (from CREW) and distribute monthly salary certification forms to all PIs in that unit. Note that when specifying input parameters in CREW, it is best to specify only the month of interest in the Date Range field and a Fund range of 100000 – 199999 (i.e. federal sponsored funds only). Specifying the Tub and Org values can constrain the query too much and may result in missed certifications. Access to CREW can be arranged by a request to the FAS Applications Security administrator (appsec@fas.harvard.edu) through the chief financial administrator of the department or center.
  • Collect signed certification forms within thirty days after the financial close of the month being certified;
  • File and retain signed forms for three (3) years after the close of each sponsored award (or three years after any audit conducted on the award, if later);
  • On a timely basis, make (or arrange to have made) corrections to personnel charges on sponsored funds as indicated by the PI; and
  • Submit quarterly reports, preferably via email, including summaries of incomplete filings and any other issues, to Nuala McGowan at nmcgowan@fas.harvard.edu.

Due dates for these summary quarterly reports are:

  • May 10th for the period January 1st through March 31st
  • September 1st for the period April 1st - June 30th
  • November 10th for the period July 1st - September 30th
  • February 10th for the period October 1st - December 31st

V. Contacts

If you have any questions regarding this policy, please contact one of the following individuals in FAS Research Administration Services:

Further information

Instructions for printing monthly salary certification report forms:

Monthly Salary Certification reports can be generated through CREW. Although a full specification of parameters is allowed, it is usually sufficient to specify the month of interest in the Date Range field and a fund range of 100000 - 199999.

Sample documents:

[Last modified: 08/23/12]

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