Personnel Policies - Grants
Time to work on grant – part of core work
How account for travel – part of core work, not admin leave or other type of leave is needed
Where is funding for travel at this stage
Employees working solely on grant – salary increases, vacation, sick, supervision, relationship to
team work beyond grant, included in library-wide activities, evaluations
Library employees –
Typically, two thirds of the direct cost budget for research grants and contracts consists of
personal services. Due to sponsor regulations and the unstructured nature of research, accounting
for the effort of personnel assigned to grants and contracts requires more attention than for other
academic activities. Sanctions for noncompliance can be serious, including criminal charges,
debarment, and suspension. The following information is intended to inform department heads
and principal investigators of their responsibilities for insuring compliance. The policies and
guidelines presented in this document represent the standard practice of Research I universities
in accounting for personal services costs, a practice commonly referred to as "effort reporting."
Federal cost principles allow the direct charging of personal services to project accounts,
provided that the following requirements are met.
(1) The employee's effort directly benefits the project.
The personal services costs are reasonable and
necessary in order to reach project objectives.
The personal services costs are treated consistently, in
accordance with established policies of the institution.
The terms of the agreement or Federal cost principles
(4) do not otherwise prohibit charging the personal
The important point is that the salaries and wages charged to a project must represent the
proportionate share of effort that directly benefits the project. It is recognized that in an academic
setting, teaching, research, service, and administration are often inextricably intermingled. A
precise assessment of factors that contribute to costs is not always feasible, nor is it expected.
Therefore, it is acceptable to rely on estimates in determining the allocable effort to be charged
to a project. Charges to sponsored agreements may include reasonable amounts for closely-
related activities contributing to work under the agreements, such as delivering lectures about
specific aspects of the ongoing activity, writing reports and articles, participating in appropriate
seminars, consulting with colleagues and graduate students, and attending meetings and
Method of Payroll Distribution
The University of Arizona's payroll and effort reporting system complies with the requirements
of OMB Circular A-21, "Cost Principles for Educational Institutions." The University has chosen
the "After-the-Fact Activity Records" method under Section 8.c.2. Our payroll and effort
reporting system covers only UA compensated effort.
The distribution of salaries and wages of professorial or professional staff applicable to
sponsored agreements is based on budgeted, planned, or assigned work activity, updated to
reflect any significant changes in work distribution. At The University of Arizona, the
distribution plan for each employee (account, percent distribution of effort, and time period) is
recorded on the Personnel Control Form, which feeds the University's payroll system. The
biweekly payroll time roster is preprinted according to each employee's distribution plan, and,
unless the payroll representative adjusts the time roster, the employee will be paid and the
accounts will be charged according to the plan.
The salary distribution plan must be modified if there is a significant change in the employee's
work activity, i.e., change in distribution of effort to one or more sponsored accounts. As a rule
of thumb, a "significant" change is defined as 5 percent or more of an employee's total UA
compensated effort. Short-term (such as one or two months) fluctuation between workload
categories need not be considered as long as the distribution of salaries and wages is reasonable
over the longer term, such as an academic period. It is the principal investigator’s responsibility
to recognize significant changes in workload activity for the employees assigned to their
accounts and to initiate action to change the Position Control Forms to modify the workload plan
in the payroll system. Where changes are made in an employee's work assignment, it is important
to check that funds are available in the account to be charged. These guidelines do not authorize
charges to accounts where funds are not available.
The bi-weekly payroll time rosters serve as the official "effort reports" required by Federal
auditors. The departmental payroll representative prepares the time roster for approval of the
departmental authorized signer. In departments with a large number of employees, the payroll
representative coordinates the payroll process with payroll representatives from sections of the
department. The departmental payroll representative adjusts the salary roster for changes, as
appropriate. The authorized signer who approves the biweekly payroll time roster must have
either first-hand knowledge or a suitable means of verification of the work performed for all the
employees appearing on the time roster. Approval by the authorized signer on the biweekly
payroll time roster satisfies the Federal requirement for after-the-fact confirmation that the costs
distributed represent actual costs. Confirmation by the employee is not a requirement for either
direct or indirect cost activities if other responsible persons make appropriate confirmations. As
stated above, only UA compensated effort is covered by the effort reporting process.
For purposes of A-21 effort reporting, salaried employees are certified on a percentage of UA
compensated effort, and wage employees are certified on UA hours worked. For wage
employees, the payroll representative is required to enter the number of hours worked on the
payroll time roster. The Employee Time Record is the University’s official, auditable subsidiary
record for all wage employees, whether the employee’s work schedule remains constant or varies,
and must be maintained from pay period to pay period. The Employee Time Record is not
designed for employees funded by multiple accounts, so it may be appropriate to use an alternate
form unique to the situation.
The principal investigators are responsible for all financial activity charged to their sponsored
projects accounts. The University produces the Payroll Expenditure Listing report after each pay
period, showing the names of the employees and amounts charged to each account. After each
pay period, the payroll representatives distribute the Payroll Expenditure Listing reports to the
principal investigators for review. This is an important internal control step and should not be
overlooked. The principal investigators or their business representatives will immediately notify
their payroll representatives of errors. The payroll representatives may correct account
distribution errors by initiating a Payroll Expense Transfer.
Procedures for documenting the payroll vary from department to department, depending on the
number of employees, accounts, and complexity of employees' workloads. The Employee Time
Record, which is the official University document for recording vacation leave, sick leave, and
regular time, is adequate supporting documentation for employees assigned to only one account
over a long period of time. A subsidiary record is recommended for employees with a more
complicated workload distribution. The subsidiary record should be designed to provide the
payroll authorized signer with "suitable means of verification" that the work was performed and
that the charges to the sponsored accounts are reasonable in relation to the work performed. The
Payroll Section of Financial Services is available to answer questions regarding subsidiary
methods of recordkeeping. The bi-weekly payroll time roster is the official, auditable University
record of effort reporting, even in those circumstances where the payroll representative uses a
subsidiary recordkeeping system.
It is the department head's responsibility to implement procedures within the academic
department that adequately meet University and Federal requirements, as outlined in the FRS
Departmental Manual and in this document. It may be appropriate to implement supplemental
recordkeeping procedures for research programs with a complex distribution of effort or special
The "University Handbook for Appointed Personnel," section 2.06.07 and sponsor regulations
govern the charging of supplemental compensation to grants and contracts. Faculty on academic
appointments may charge up to 3/9 of the academic year salary to the grant, if allowable under
the terms of the grant. The National Science Foundation, for example, allows only 2/9 of the
academic year salary. Fiscal faculty are generally not eligible for supplemental compensation.
Overtime pay for faculty is not allowed on grants and contracts, unless approved by the sponsor.
Overtime pay for classified staff is allowable on grants and contracts, consistent with University
policy, unless prohibited by the terms of the award.
Compassionate Transfer of Leave
University policy allows employees to transfer their accrued vacation to other vacation-eligible
employees who are unable to work due to having suffered a catastrophic illness or injury or who
are absent due to catastrophic illness or injury within the employee’s immediate family,
established household, or situations that place primary responsibility for care on the employee.
Grants and contracts may not be charged for compassionate leave without approval of the
Fringe benefits (employee-related expenses) are charged to the project account at a fixed rate,
depending on the classification of the employee, in accordance with the University’s Rate
Agreement. Actual charges for FICA, retirement, insurance, and other benefits are not charged to
the project account, but are charged to the Fringe Benefit Pool Account. This method of charging
fringe benefits by an average rate simplifies budgeting and accounting for personal services. See
Quick Reference for current rates.
Graduate Research Assistants
Fringe benefits are allowable only to the extent that such benefits are granted in accordance with
established institutional policies, applied to all funds on an equitable basis. Investigators do not
have the freedom to charge additional employee benefits outside the institutional employee
benefit package. For example, registration fee waivers are granted to employees in certain job
classifications as part of the employees’ benefit package. The job classification of "Research
Assistant" is not one of the job classifications that provides for registration fee waivers. An
investigator may want to charge registration fees for their research assistants directly to the
project; however, direct charging of registration fees and tuition for employees in non-eligible
classifications is not an allowable charge because the fringe benefit is not part of an established
institutional policy, applied on a consistent basis. This same logic applies to other fringe benefits,
such as parking stickers, insurance, license fees, professional dues, and job search costs, such as
long-distance calls and express mail. These costs are considered "personal costs" and are
Other avenues may be available for covering "fringe benefits" for research assistants. The
investigator is free to raise the employee’s hourly wage, within the limits of the employee’s pay
grade. Check with your department head for the eligibility requirements for a graduate tuition fee
waiver. Further, some departments charge registration fees for research assistants to
departmental discretionary funds as part of a departmental scholarship program. Personal costs
may not be charged to any University funds.