Furloughs and Effort Reporting
Adapted from the UW-Madison Furloughs and Effort Reporting Web page
The State of Wisconsin has implemented a plan for 8 days of furloughs for all State employees in FY 2010 and FY 2011. We have anticipated the following questions about the impact of furloughs on employees who are paid from grants and contracts.
1. Do furloughs require any change to UWM effort reporting?
Furloughs will NOT affect effort reporting since effort reporting is based on 100% of an individual’s compensated activities at the university. Furloughs reduce the actual time an individual works and the pay associated with that work. However, the reduced time still represents 100% of the person’s compensated activities. There will be no effect on the percentage of time and the distribution of effort across different funding sources.
2. Will individuals working on grants be furloughed?
Yes. The State has mandated furloughs for all State employees, regardless of source of funds. However, there are a few classes of employees, primarily students, who have been exempted from furloughs. Please check the University’s website for complete information about furloughs and their application to various classes of employees: http://www4.uwm.edu/hr/furloughs/.
3. How will furloughed employees certify effort in the ECRT system?
The effort reporting principles won't change. The Notice of Grant Award or other award documents from the sponsor have already established a level of activity or commitment that is still expected. Certifiers should still certify that their commitments to sponsors have been met. Assuming that salaries are still distributed as planned and overall effort is expended in the same proportions as before the furloughs, none of the percentages on the effort statement will change.
Departments and certifiers should review salary and effort distributions even more closely during the furlough period, especially those who have a significant portion of their salary funded from grants. In particular, please consider the following financial accounting factors: how the grant(s) have been charged, any re-budgeting that has occurred, financial status reports, and award closeouts.
4. Is it legal to require people paid on grants to take furloughs? What about federal grants?
Yes, it is legal for the State to require people on grants, even federal grants, to take furloughs. OMB Circular A-21, section J10b(2)(d) states: “Practices vary among institutions and within institutions as to the activity constituting a full workload. Therefore, the payroll distribution system may reflect categories of activities expressed as a percentage distribution of total activities.” Institutions are expected to have organizational policies with regard to the payment of salary and wages for employees and to consistently apply those policies regardless of the source of funds. Payroll and effort records should reflect no more than the percentage of time actually devoted to any grant or contract.
5. What about student employees? Do they have to take furloughs? Will that affect their effort reporting?
Most classes of student employees at the university have been exempted from furloughs, and there will be no impact on effort reporting for them. Please check the University’s website for complete information on students and furloughs: http://www4.uwm.edu/hr/furloughs/
6. Is there an example of how furloughs will work with effort reporting?
Let’s take an example of an employee who is required to take an 8-day furlough and who is paid 50% from State funds and 50% from Federal funds. Since the furlough program covers all individuals regardless of funding source, there would be a proportional decrease in compensation to both funding sources. The payroll distribution would be unaffected, and the individual’s full-time appointment and corresponding responsibilities would not be affected. Thus, the percentage of effort certified will not change. Just as before, this employee should certify 50% effort on State (or non-sponsored) funds and 50% effort on Federal funds.
7. I have a MANDATORY cost sharing commitment on my grant, and I am meeting the commitment with donated effort. How do furloughs impact my cost sharing?
A mandatory cost share means the funding agency is requiring a certain level of matching contributions as a condition of eligibility for an award. If you are meeting the commitment through contributions of your time, there is an impact. While your effort reporting level will not change because of the furloughs, your cost sharing DOLLAR commitment will be reduced. If cost sharing is mandatory, you will need to increase your level of effort in order to meet the dollar level of cost sharing promised in the proposal.
8. What if the cost sharing is voluntarily committed and not mandatory?
In that case, you must meet the level of effort promised in the proposal, but you are not required to meet the dollar threshold. The commitment was to effort, not dollars.
9. Are other universities requiring employees to take furloughs?
Yes, more than 20 other states are requiring furloughs. UWM is working with other major research universities to provide a generally consistent approach to furloughs and effort reporting across institutions.