Why Faculty Need to Complete the FEC

The Federal government requires signed documentation for faculty salary costs charged to grants and contracts and for cost sharing related to sponsored agreements. Sponsored agreements include grants and contracts.

Office of Management and Budgetⁱ (OMBⁱ) Circular A-21, "Cost Principles for Educational Institutions" requires faculty involved in sponsored agreements to report activities for which they are compensated each academic term or no less often than every six months. Faculty are also to account for mandatory and committed cost sharing that was placed on the proposal budget page or budget justification and any required K award or salary cap cost sharing. The FEC reflects an after-the-fact-reporting for faculty effort, paid and cost shared.

What are the Compliance Risks

Recent audits resulting in multi-million dollar settlements between the government and research institutions, coupled with policy changes at the national level, have resulted in an increased level of risk to effort reporting.

Improper or inadequate certification of effort can result in the following restrictions imposed on the University by the federal government:

• Payback of award funds to sponsor
• Withholding of future awards
• Special monitoring by sponsor
• Temporary withholding of payments
• Audit findings
• Requirement for corrective action plan
• Designation as a "high risk" organization
• Loss of Expanded Authorities
• Payment of punitive damages

How the FEC Form Is Used

The FEC is used:

• In audit and compliance:
  
  • Faculty Effortⁱ Certification reports are used in the audit process to ensure compliance with the level of effort agreed to in the award document and/or to determine cost shared effort.
  • Ensures compliance with the OMB Circular A-21 requirement to confirm that the distribution of effort "represents a reasonable estimate of the work performed by the employee during the period."
  • FECs are reviewed by:
    
    • Granting Agencies
    • The University of Washington, Internal Audit
    • State Agencies/Auditors
    • Federal Government Agencies/Auditors
• To show salary information and amounts available as a cost share source.
  • FECs provide departments with the salary for an FEC cycle by budget source for a given individual and specify the non-federal budget amounts available for cost sharing.
• To certify that the faculty have performed the sponsored project work for which they are paid.
  • Sponsors expect the FEC to provide verification that the compensation charged is appropriate to the activity performed.
• To document the faculty effort cost sharing.
  •  This cost share is included in the Facilities and Administrative (indirect  cost) proposal for the University.
• To complete the final report to the sponsor prepared by Grant and Contract Accounting (GCAⁱ).

Note:The FEC report is considered a public record under the terms of the State of Washington's Public Disclosure Act.