Frequently Asked Questions

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These guidelines are intended to provide clarification in defining, planning for and monitoring changes in level of effort or shifts in the source of funding for faculty effort commitments under sponsored agreements.  Guidelines include changes in:

  • effort charged directly to sponsored agreements
  • cost sharing commitments
  • funding shifts (i.e. changes in the source of salary funding)
  • reductions of effort

The scenarios and examples below assume the award is under expanded authorities i.e. the University (typically the Office of Sponsored Programs [OSPii]) has designated authority to act on behalf of the Federal government (sponsor). If the award is not under expanded authorities, then sponsor approval is generally required prior to any actions being taken.


  • The Federal government assumes the PI will generally maintain the originally proposed level of effort even when an award is reduced from the original funding requested.
  • The "originally proposed effort" or "originally funded amount" is the percent against which future reductions should be determined and calculated.
  • A renegotiated "originally proposed effort" or "originally funded amount" becomes a new percent/amount against which future reductions should be calculated.


While this document refers to the PI (out of writing convenience), a change in the level of effort of any Key Personnel (as identified in the notice of award document) on a sponsored project requires that the same procedures be followed.


Federal Requirements

Under the guidelines in Uniform Administrative Requirements, Cost Principles, And Audit Requirements for Federal Awards (formerly Office of Management and Budgetii (OMi) Circular A-110ii), a PI may not reduce his/her cumulative maximum effort by 25% or more across all non-competing segments of the award without prior agency approval.

If, at any time, the cumulative change represents 25% or more reduction of the originally committed effort, a formal request for prior approval to the sponsor for the reduction in effort is required.


Note: this guidance applies only to Federal grants. Departments should check the specific terms and conditions for Federal contracts and non-Federally funded sponsored agreements.


Process for Documenting Reductions of Effort or Shifts in Funding Source


When there are changes either in the level of effort provided or shifts in the funding source(s) supporting the effort, the following procedures should be followed.

  • Reduction of Effort from Original Commitment
    • Less than 25%:  adjust OPUS to reflect new percent effort.
    • 25% or greater: contact sponsor through OSP for prior approval.
  • Shift in Funding Source from Award Funds to Other Salary Sourcesi with no reduction in effort
    • If the change is less than 6 months, use the Adjust/View Cost Share feature in eFECS Effort Reportingi to set up a "shift" cost share.
    • If the change is 6 months or greater, or will impact more than one FEC cycle, the department must prepare a Cost Share Addendum and send it to GCAi with an informational copy to OSP.
      • GCA will add the cost share commitment to the Cost Share Module.
      • Ensures the cost share commitment appears on the FEC as a reminder to departments that a shift in the source of funding has occurred creating a cost share obligation.


It is recommended that, for the department's future reference, documentation for the shift in funding sources for the grant be maintained in department records (e.g. OPUS text, letter in faculty and/or grant file, etc.)




  • Faculty indicates 20% effort commitment on a grant proposal.
  • After the proposal is awarded, the PI discovers a need to reduce his/her effort to 16% (a reduction which is less than 25% of the originally proposed effort).

Shift Calculation: (20% - 16%) ÷20% = 20% change in effort


Option #1: Original effort is directly charged to the grant:
  • Department Action: The PI directs the department to make appropriate adjustments to OPUS to reduce the salary charged to the grant commensurate with the reduction in the level of his/her effort.
  • No other action is required as change is less than 25%.


Option #2: Original effort is cost shared (short or long term)
  • Department Action: Department submits a Cost Share Addendum directly to GCAi to reduce the cost share pledge in the Cost Share Module for the PI.
  • GCA Action: GCA reduces the pledge as documented by the revised Cost Share Addendum.


Option #3: Original effort is cost shared and some responsibilities are assumed by another faculty member (short or long term)
  • Department Action: Department secures appropriate approvals for commitment of funds to cost share salary of another faculty member.
  • Department Action: Department submits a revised Cost Share Addendum directly to GCA to reduce the cost share pledge in the Cost Share Module for the PI. If the team member assuming the additional responsibility is not being paid from the grant for the additional effort, then the cost share for that team member should be included with information added to the revised Cost Share Addendum.
  • GCA Action: GCA reduces the original pledge as documented and also adjusts the pledge by adding the faculty member replacing the PI if documented on the revised Cost Share Addendum.


Note: If the originally documented cost share is Mandatory, i.e., required as a condition of the award, other cost shared expenses must be provided to make up any shortfall resulting from the adjustments to PI or other personnel effort.



  • Faculty indicates 20% effort commitment on a grant proposal.
  • After the proposal is awarded, the PI discovers a need to reduce his/her effort to 10% (a reduction which is 25% or more of the originally proposed effort).

Shift Calculation: (20% - 10%)/20% = 50% change in effort


Option #1: Short term

Department Action: Department determines if additional effort during subsequent cycles and/or effort from previous cycles,  will result in a total change in effort of less than 25% (within competitive grant periods). If this is true, then no action is required beyond adjusting OPUS. (See Example 1, Option 1).


Option #2: Long Term – When Directly Charged to Grant
  • PI Action: PI must forward a written request to OSPi for their concurrence and submission to the sponsor's Grants Management Officer (GMO).
  • PI/Department Action: Wait for Sponsori approval.
  • When written approval is received from the Sponsor
  • OSP Action: OSP will forward approval to PI and Department
  • Department Action: The PI will direct the Department to make appropriate changes in OPUS to reduce the salary charged to the grant commensurate with the reduction in the level of effort.

Note: All Federal grants and some non-federal grants require sponsor approval. Departments should check with OSP if there is any question about the sponsor’s requirements.


Option #3: Long Term – When Effort is Cost Shared
  1. PI/Department Action: PI must forward a written request to OSP for their concurrence and submission to the sponsor's GMO
  • PI/Department Action: Wait for Sponsor approval.
  • Sponsor Action: Written approval is received from the Sponsor
  • OSP Action: OSP will forward approval to PI and Department and will send a revised Post Awardi Change (PAC) and revised Cost Share Addendum to GCAi.
  • PI/Department Action: The PI will direct the Department to make appropriate changes in OPUS to reduce the salary charged to the grant commensurate withe the reduction in the level of effort.
  • GCA Action: GCA adjusts the cost share pledge in the Cost Share Module.


Note: All Federal grants and some non-federal grants require sponsor approval. Departments should check with OSP if there is any question about the sponsor’s requirements.

A change in effort which requires sponsor approval should not be initiated until AFTER the formal approval is received.


  • Faculty indicates 20% effort commitment on a proposal with requested funding for the full 20%
  • After the proposal is awarded, the PI discovers a need to reduce his/her compensation from the award (e.g., from 20% to 15% from the award) but maintains his/her effort committed at the originally proposed level of 20%.
  • This results in a cost share situation


Option #1: Short Term (6 months or less):

Note: A Cost Share Addendum is NOT required for this scenario

  • Department Action: Choose "Edit Comments" on the FEC and in the "Additional Comments" section, place a notation in the comment box confirming the proposed pledge X% of committed effort for this faculty member remains the same and that this is a short term shift in funding source.
  • Department Action:
    • Click on the "Adjust/View Cost Share" button on the FEC
    • Choose "Add Item"
    • Enter the budget number and choose "Short Term Shift" cost share type
    • The percent entered will normally equal the difference between the amount pledged in the proposal and the amount charged directly to the grant
  • MAAi Action:

    • MAA assumes the faculty member signing the FEC has received concurrence from the department chair (or authorized department representative) to commit departmental resources for meeting this newly created cost sharing amount.

    •  MAA will periodically sample this type of cost shared effort to ensure the department is not over cost sharing or accounting for voluntary uncommitted effort as cost sharing and that it is of a short term nature.


Option #2: Long term (6 months or greater): originating at receipt of grant OR for more than one cycle.
  • Department Action: The department prepares a Cost Share Addendum documenting amount of effort being cost shared.
  • Department Action: Sends the Cost Share Addendum  to both OSPi (for information purposes only) and GCAi for entry into the Cost Share Module.
    •   Submit Cost Share Addendum revised prior to certification of the FEC to avoid need to recertify.
    • Choose "Edit Comments" on the FEC and in "Additional Comments" section, placing a notation in the  comment box confirming that the proposed pledged X% amount of committed effort for this faculty member is unchanged and that this is a long term shift in funding source.
  • Department Action: The dean’s or department chair’s signature (or their designee) must appear on the Cost Share Addendum to ensure that appropriate permissions have been obtained and resources are available.
  • GCA Action: GCA will set up an “S” (Shift in Funding Source) cost share pledge in the Cost Share Module. This pledge will then be displayed on the FEC form.
  • Department Action: Cost sharing must be met before the budget can close. Note: if the department does not complete and submit the Cost Share Addendum, the pledge will not appear on the FEC.
  • Department Action: Should the PI decide to begin charging his/her full effort at a later date, an updated Cost Share Addendum must be filed in the same manner to discontinue this expectation of cost sharing.

Note: While GCA does not report "Shift" cost share to the sponsor, it is expected that the cost share will be met before closing the budget as it documnets the committed effort for the PI or key personnel.

Recharge Centers

Overtime charges are allowable and are generally distributed proportionately to all activities during the time period in which they are earned.   

e.g. Employee A, who is overtime eligible, works 20 hours on cost Center 14-XXXX  and 30 hours on budget XX-XXXX for a total of 50 hours.  Cost Centeri 14-XXXX should be charge 40% (20/50) of both the regular earnings and the overtime earning for employee A. In addition, if employee A’s cost center activity involved more than one job for the time period, each job would normally share in the overtime earnings charged to the cost center.

Overtime charges can be recovered in two ways.  1) If overtime can be estimated with a high degree of certainty the incremental costs should be distributed to and included in the appropriate services prior to determining the rates for those services.  2) If overtime cannot be estimated with a high degree of certainty or is unanticipated the cost can be recovered through the next proposal cycle, via the over/under recovery adjustment.  3) The incremental cost of the overtime (overtime salaries plus the additional fringe benefits) can be added to the charges for ALL services (jobs) that employee worked on during the period of time the overtime was earned. Note, this is not a rate adjustment rather it represents only the actual incremental (additional) costs of the overtime.


Additional Guidance from Code of Federal Regulations

Grant and Contract Accounting and Cost Principles For Educational Institutions (OMBi CIRCULAR A-21i/CFR 2 Part 220):


Grant and Contract Accounting website

 Frequently Asked Questions

Is it allowable to have overtime pay for a clerical staff person on our Dept of Energy grant, budget xx-xxxx? Clerical staff salaries are specifically approved as direct cost on this grant, because of our activity.

Federal regulations (A-21) do not disallow overtime for personnel other than the PI. However, unless the individual is assigned 100% to the xx-xxxx project, any overtime would need to be distributed to their other activity proportionately.


Cost Principles For Educational Institutions (OMB CIRCULAR A-21/CFR 2 Part 220)

Section 10.b(1)(b)

(b) The apportionment of employees' salaries and wages which are chargeable to more than one sponsored agreement or other cost objective will be accomplished by methods which will—

      (1) Be in accordance with Sections A.2 and C of this Appendix;

      (2) Produce an equitable distribution of charges for employee's activities; and

      (3) Distinguish the employees' direct activities from their F&A activities.


NOTE: Sections A and C discuss allocable, reasonable and allowable costs.

Imputing Revenue for Recharge and Cost Centers – Imputing revenue represents the process of adjusting revenue to reflect an amount free from subsidies and other less than full reimbursements, e.g., bad debts, when determining future rates for recharging.  In essence it adjusts revenue to assume full reimbursement from all users of the recharge/cost center.  This is necessary to ensure the Federal government does not wholly or partially participate in the subsidies or other less than full reimbursements.  Recovery of the subsidy would need to be done through non Federal sources and usually from non University sources.  Most commonly this would be recovered from external users by crediting the center’s reserve budget or an alternate budget.  Depending on the amount of the subsidy this could also be recovered over a period of time, e.g., 2-3 years.



Department contributes a $10,000 piece of equipment to a recharge center. In consideration of this the recharge center provides the department with $10,000 of unbilled service.  For the current rate cycle the annual operating costs for the center were estimated to be $100,000.  For determining rates for the next rate setting cycle the unit would need to determine their carry forward balance as follows:

Actual expenses for the year                      $101,000


Actual revenue (internal/external)                (89,000)

Imputed revenue1                                             (10,000)


Net (profit)/loss (carry forward)               $    2,000


1 Represents unbilled services to department in consideration of equipment purchase of $10,000

Mid-year equipment purchases represent equipment acquisitions that do not coincide with the fiscal period of the recharge/cost center.   As a result, they are sometimes included in the annual rate proposal if anticipated or are not included if they were not anticipated or not able to accurately estimate.  In either situation, the following applies:

Depreciationi for mid-year equipment purchases cannot be included in quarterly JVs until the equipment has been placed into service in the center and a new depreciation schedule has been approved by the Dean/VP’s office and MAAi.

Special consideration should be given when any portion of the acquisition will be charged to a sponsored project(s) or the equipment will not be used 100% by the center. These situations should be discussed with your Dean/VP’s office and MAA as soon as possible to determine if there are any unique issues associated with the equipment (e.g., program income implications).


Including Mid-Year Equipment Purchases in annual proposal

When the purchase of a piece of equipment for the operation of a recharge/cost center (center) is expected to occur within a period covered by a rate schedule, that piece of equipment may be included in the depreciation schedule of the rate proposal.

For a future equipment purchase to be eligible for inclusion in a center rate proposal, the acquisition date and cost of the equipment should be known or accurately estimated.

The depreciation start date should be based on the anticipated acquisition date. This is usually the start of the quarter following the acquisition date of the equipment. Center rates cannot include depreciation for equipment for any period prior to the anticipated acquisition date. For example, if the center rate begins July 1st and the anticipated in service placement of the new equipment is October 1st, the center can only include 3 quarters, or 75%, of the annual depreciation for that year.


Mid-Year Equipment Purchases not included in annual proposal

When the purchase of a piece of equipment for the operation of a center occurs within a period covered by a rate schedule and that piece of equipment was not included on the depreciation schedule in the rate proposal, centers should update their depreciation schedule and determine whether a mid-year rate adjustment is needed. 

  • If a mid-year rate adjustment is necessary,  the center should submit an adjustment approval request to both their Dean/VP’s office and/or MAA highlighting the updated costs and the new depreciation schedule.
  • If a mid-year rate adjustment is not necessary, the center should submit the new depreciation schedule to their Dean/VP’s office and/or MAA notating that a new proposal is not necessary. 

Beginning with Quarter 3 2014 MAAi will begin to send delinquent letters to the Recharge Centers contact and cc the corresponding Dean/VP Office. The letters will be sent 8 weeks after the quarter ends to give centers time to finalize the report. 


This letter will only be sent to Recharge Centers as Cost Centers are not required to send quarterly reports only to their Dean’s/VP’s office.


Summer (7/1-9/30)–

                Due date second week of November

                Escalation letter sent first week of December


Autumn (10/1-12/31) –

                Due date second week of February

                Escalation letter sent first week of March


Winter (12/1-3/31) –

                Due date second week of May

                Escalation letter sent first week of June


Spring (4/1-6/30) –

                Due date second week of August

                Escalation letter sent first week of September

Recharge and Cost Centers are responsible for submitting rate proposals in a timely manner. Beginning March 2014 MAAi will begin sending courtesy emails to the Recharge Centeri contacts reminding them of the need to submit a new rate proposal. This email will be sent approximately 6 weeks prior to the expiration of the current rates.


Should the proposal not be received by MAA prior to the expiration of the current rates, a second follow-up email will be sent to the Dean/VP office with a copy to the Recharge Center contact. MAA will maintain a list of delinquent centers which will be provided to the Internal Audit Office on a monthly basis.


These emails will only be sent to Recharge Centers as the responsibility for conducting annual rate reviews for Cost Centers is the responsibility of the Deans/VPs office.

Capital leases essentially represent capital acquisitions and therefore must be handled in a like manner.  Additionally, capital lease payments may not provide an accurate representation of the center’s depreciation for the asset(s).   For this reason recharge and cost centers’ capital lease principle payments must be charged to the center’s reserve account (budget) and not to the center’s operating account (budget).  To recover the cost of the asset(s) the center must determine the appropriate annual center depreciation which may be charged to the center’s operating account and recovered through their recharge rates.  Note, external interest associated with capital leases should be charged to centers’ operating accounts and recovered through the recharge rates.


Recharge/cost centers who are presently charging capital leases to their operating account may be grandfathered on this change on a case-by-case basis but only for current capital leases.  Future capital leases for these centers must be handled in the above manner.  If your center is one that presently has this arrangement in place please contact Management Accounting and Analysis so that we may assess your specific situation and advise you of actions to be taken. 

In an effort to ensure centers are costing their rates appropriately a variance analysis report reflecting the previous year’s estimated costs to actual costs must be submitted on or before the submission of the first quarterly report for the succeeding rate period. The report should include an explanation of any material differences, i.e., +\- 10% or more or +/- $5,000 or more, from the original cost estimate, whichever is greater.  If there are any material encumbrances they should also be reflected.


For example, if the estimate for salaries was $30,000 and the variance +$3,500 an explanation would not be required as the variance is less than $5,000 even though it is greater than 10%.  However, if the salary estimate was $75,000 and the variance +$5,500, it would require an explanation as it is greater than $5,000 even though it is less than 10%. 


The variance report is included in the Quarterly Report Excel workbook which can be found on the MAAi website under “Forms/Templates”, Quarterly Report.  The report is the third tab of the workbook.

























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>5000 & >10%






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>5000 & >10%

On occassion a center may be asked by an external customer to complete a W9 form before a payment can be received.  For more information on how to fill out a W9 visit the following link.

Food purchases are unallowable on recharge and cost center operating budgets* unless the following exceptions apply:


  • The center has a programmatic requirement for food purchases.  In other words the food being purchased must be essential to the operations of the center.  If this is the case, it should be clearly stated in your rate proposal.
  • Centers may purchase meals or refreshments for meetings or conferences IF technical information pertaining to the center’s operations is disseminated.  In such cases an agenda and other documentation must be kept on file to prove the content of the meeting/conference.  If the meeting/conference was not approved ahead of time in your proposal, a food approval form will be required.

Visit the following link for the food approval form, details on how to fill it out, and additional information on food purchases.


*Food purchases are allowable on reserve budgets (program type 21 & 23) if the purchase directly benefits the center, however centers must still comply with UW food approval policies.

Current University guidelines allow for the Technology Recharge Fee to be included on approved recharge and cost center budgets, see  The percentage of the Tech Recharge Fee to the center should not exceed the FTE percentage of the associated employee assigned to the center.  For example, if an employee is assigned 50% to the recharge/cost center, the percentage of the Tech Recharge Fee charged to the recharge/cost center should not exceed 50% of the total amount assessed to the department.


 The two most appropriate allocation methodologies are:

  • Allocatei the fee to individual rates based on the same allocation of the related salary
  • Allocate the fee to internal center overhead.

Centers should choose the methodology that most accurately reflects how costs reflect.

K Awards

Cap cost sharing can contribute toward fulfilling the direct charged effort commitment on a K Awardi. The sum of the direct charged salary, salary cap cost sharing and K Award cost share should equal the 75% commitment of effort.

Salary from K Awardi may not be sufficient to fund the 9 person month's effort required by the K Award. Supplementation provides funding for that portion of the 75% effort requirement not paid for by the award. The University may 'supplement' the K Award salary with other institutional funds; however supplementation may not be from Federal funds unless specifically authorized by the Federal program from which such funds are derived. In no case may additional PHS funds beyond those provided in the K award be used for salary supplementation. The PI can be paid on other federal awards for the remaining 25% effort

The question of whether or not Federal support can be used for salary above the K award effort may actually depend on the particular K award. Some K awards actually require other NIHi support. Others imply that since the K award experience is considered full-time there is no room for Federal funded activities outside of the K award activities. However, in most cases, if only 75% effort is devoted to the K award, the remaining 25% can be devoted to other projects as long as they are K related and contribute to the K award experience.

Managing Faculty Effort

Department/college administration is responsible for assuring that the provisions for funding are in place to fund non-grant activities. Generally any departmental/school sources, including but not limited to, indirect cost recovery, gifts, endowments, and state funds may be used to fund these activities.

Salary support for teaching, administration, service, clinical activity, institutional governance and proposal preparation effort must come from non-sponsored funds. This applies whether the faculty member is full time or part time.

Consistent with the spirit of the Bayh-Dole Act, reasonable levels of activity related to pursuing intellectual property can be charged to grants.


These activities may include making an invention disclosure, meeting with UW’s Tech Transferi Office to discuss an invention disclosure, meeting with a patent attorney about a UW invention and/or reviewing internal actions on patent applications.


As with any effort charged to sponsored agreements, effort associated with the pursuit of intellectual property must be directly related to the sponsored project that is being charged. Where more than one award or activity contributed to the development of the intellectual property the effort distribution should be based on proportionate support provided under the awards or other equitable relationship.


The effort must also occur within the award period for it to be eligible for direct charging. These activities should be included within total University effort for effort reporting purposes.

Yes, with the following caveat. Regardless of whether the cost sharing is percent effort or dollars, if there is a specific commitment of effort by the PI or other key personnel, and the re-budgeting is caused by or results in a significant reduction (i.e. 25% or more) of that commitment, prior approval from the sponsor for this change needs to be obtained. Additionally, significant adjustments between effort and non-effort categories may imply a scope change. If this is the case, the sponsor must be contacted to approve the change.

While it is important that the researcher maintains a good relationship with the Program Officer, communicating changes solely through the Program Officer is not sufficient. Any decrease in effort of 25% or more by key personnel (as noted in the Notice of Grant Awardi) must be approved in writing prior to the change by the sponsors' Grants Officer. An increase in effort greater than 25% for key personnel should also be reviewed to assess whether there has been a change in the scope of work and the impact, if any, on other sponsored agreements. Any change in the scope of work must also be approved in writing prior to the change by the sponsors' Grants Officer. All requests must be processed through the UW Office of Sponsored Programs in advance of the change.

The faculty member needs to be mindful of all information s/he uses to describe his/her activities. However, since the Medicare report is a snapshot of 2 weeks every six months, it may vary from information reflected on an FEC which is averaged over a six month reporting period.

The faculty member needs to be consistent when thinking about his/her time and accurately depict those times in every report s/he completes.

From a strict policy stand point, the terms and conditions of the award continue unless amended, so reducing effort by 25% or more would require sponsor approval.


The PI may, however, request that the sponsor approves eliminating or reducing the cost share during the no-cost extension process. While the University may approve the no-cost extension, the reduction of effort must be granted by the sponsor.


K awards present a unique case as they generally carry the requirement for a 75% commitment of total professional effort.

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