Investigation of Alternatives to Effort Reporting for the University of Wisconsin-Milwaukee
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Effort reporting is consistently ranked as one of the most frustrating and burdensome administrative tasks related to grants management, often resulting in inaccurate effort reports and low certification rates at many universities nationwide. Furthermore, the cost of administering an effective program is significant when considering the volume of reports and the number of people involved in the process. These instances are particularly true at the University of Wisconsin-Milwaukee (UWM), in which effort reports are often certified late and certification rates are less than 100%. Concerned with the quality and timeliness of its certified effort reports, UWM has questioned whether the cost of effort reporting outweighs the benefits. The emphasis on internal controls in the Federal Office of Management and Budget’s regulations under 2 CFR 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) has produced a spectrum of alternatives to effort reporting, including payroll certification and systems that rely solely on internal controls. Because the Uniform Guidance regulations offer universities flexibility in developing their own methodology for documenting compensation charged to federal grants, this research project explores cost-effective alternatives to effort reporting for UWM that would improve its compliance with federal regulations and reduce administrative burden. The strengths and weaknesses of UWM’s current effort reporting system were evaluated using the Internal Control—Integrated Framework established by the Committee of Sponsoring Organizations of the Treadway Commission, which is the standard to be used by universities when designing a system of internal control. This evaluation included interviews with UWM Principal Investigators, discussion with research administrators at peer universities, examination of the current regulatory environment, and review of alternative methodologies used by other universities as potential options for UWM. The findings show that two strategies could help UWM improve compliance in documenting salaries and wages charged to federal grants: (1) strengthening internal controls to improve the timeliness and quality of certifications with the goal of achieving a 100% certification rate by the end of the 90-day certification window, and (2) conducting a feasibility study to determine the viability of transitioning to a project-based payroll certification system as a way to optimize the cost of compliance. Both options could offer UWM greater efficiency, accuracy, and higher certification rates.