Budget & Financial ServicesUniversity of CincinnatiDivision of Administration and FinanceBudget & Financial Services

Budget & Financial Services

GCC Frequently Asked Questions

Labor Verification

What is a Quarterly Effort Verification Statement (LVS)?

The LVS is a certification which is used to document the amount of effort actually spent on a project.

Why do we have LVSs?

Effort reports are required by federal regulations found in OMB Circular A-21.  Auditors from the agencies that give UC money use LVSs to verify that the percent of salaries charged to the project, or cost-shared, are justified.  The LVS serves as the certification for salary expenses. If, for example, an auditor could not find an LVS, or the percentage of salary charged to the project is more than the percentage of effort reported in the LVS, the auditor will request a refund of the difference.

How often are LVSs required?

Once each academic quarter (4 per year)

Who has to complete an LVS?

Only those with salary charged, or committed as cost sharing, to sponsored projects.  Usually these projects are within the account series G10000 – G49999.

How do I complete the LVS?

Verify the percentage of effort actually performed during the quarter. Then sign, date and return the LVS to GCC. The total effort reported for all projects MUST TOTAL 100%.

What of a restricted project doesn't have an account yet or the account doesn't appear on the LVS and you are working on it?

Notify GCC.

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Who can sign an LVS?

  • Principal Investigators (PI's): PI's must sign their own LVS's.  
  • Full-time Faculty (Non-PI's): should also sign their own LVS's (especially if they are working on multiple projects with different PI's), however it is acceptable to have the PI or Co-PI sign for them if they are familiar with all of their restricted projects.
    Part-time Faculty, Staff, and Graduate Students: must be signed by the PI if the person is working on their projects. For these persons working in multiple departments or for multiple and different PI's then each PI must sign for their own project.
  • In those rare circumstances when the above guidelines cannot be met, a department chair may sign the LVS's if they have suitable means of verification that the work was performed as indicated by the percentages in the LVS.
  • Why the PI? Because only the faculty member can contradict the effort reported on the LVS thereby putting the department at financial risk for audit disallowance.

What if the appriopriate signatory is unavailable?

  • If the appropriate signatory is temporarily unavailable for a brief time (e.g., on vacation), you should wait until they are available, and then have them sign the LVS.
  • If the appropriate signatory is temporarily unavailable for a considerable time (e.g., on sabbatical or long-term sick leave), you should send the document to them via fax or email, to be signed and faxed/emailed back to you.
  • If the signatory is permanently unavailable (e.g., they have left the University and are out of contact), a department chair may sign if they have suitable means of verifying the effort.

How should the information on the LVS be verified?

The information on the LVS should be verified by comparing it to the appropriate grant budgets (committed effort) and to the labor history found in SAP Business Warehouse (BW) report LH100E – Labor History by Employee.  The LVS should not be signed until someone has reviewed and verified the amounts.

What types of pay are included on the LVS?

Basic pay (including sick leave and vacation pay), Administrative Stipends, and Summer teaching (for AY faculty) are included on the LVS.   Awards, Bonuses, Additional Pay (ADL), Work Study pay, and Intercession Pay (EXC) are not included.

What if the amount reported on the LVS do not refelect actual work performed?

DO NOT SIGN THE LVS if you do not believe it to be correct.

If the actual work performed differs from the effort listed on the LVS, the department should initiate a change to the labor history by submitting a Personnel Change Request (PCR), as well as a salary Cost Transfer Request (CTR) if necessary.  Once these have been approved and the changes posted to payroll, a new LVS will be issued and can be signed.

How are changes made to Labor History?

The appropriate administrator (generally either the BA or someone assigned by the BA) issues a Personnel Change Request (PCR) to cover the time period to be changed.  If funds are being moved on to or off of a grant account, a Cost Transfer Request (CTR) must also be completed and approved by Sponsored Program Accounting (SPA).

What if the amounts reported on the LVS do not match the Labor history?

DO NOT SIGN THE LVS if you do not believe it to be correct.

Please contact GCC, and we will review the information and, if necessary, issue a new LVS.

Should I use a 40 hour work week as a base for computing the effort percent to be reported on the LVS?

You should calculate the effort percent based on the time it took to perform the duties for which you were paid.  If, for example, an individual can fulfill his/her obligation to the University in a 50 hour work week the LVS needs to be completed, adding up to 100%, based on the distribution of those 50 hours.  If an individual needs a 60 hour work week to fulfill his/her obligation, the LVS needs to be completed, adding up to 100%, based on the distribution of those 60 hours. 

If I have a half time appointment, should the LVS total 100%?

All LVSs should total 100% regardless of percent employment or percent of the quarter worked.  If a person only worked two weeks of a quarter, the LVS should still total 100% (based on the distribution of those two weeks).

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What is the "all other" secion on the LVS?

The “all other” section of the LVS includes all work for an employee on non-sponsored activities.

Who can sign the "all other" section?

The “all other” section can be signed by any of the following individuals, provided that they are sufficiently knowledgeable:

  • The employee (only if Full Time Faculty)
  • The PI of a grant worked on by the employee
  • The Departmental Administrator
  • The Department Chair

Why is a signature needed in the "all other" section?

A signature is needed for the “all other” section because the federal government requires that the LVS represent the total effort for the employee, not just the sponsored effort.

I can't verify what the employee worked on his non-sponsored projects, so why should I sign the "all other" portion?

The “all other” section is not asking the signatory to verify what the employee did during his non-sponsored time, only that they verify that the percentage listed is a reasonable representation of their non-sponsored effort in relation to their work on sponsored projects.

When I sign the LVS, what am I agreeing to?

You are certifying that you spent at-least as much effort as the effort reported in the LVS for the report period.  Auditors sampling the accuracy of the LVS will begin their review with the person that signed the LVS.

If pay is moved to the long-term sick pool or faculty sick pool, is it included on the LVS?

No.  The long-term sick pools are considered fringe benefits, not salary, and the LVS is intended to track salary/wage payments only.  Therefore, charges to the long-term sick pools are excluded from the LVS.  If transfers to the long-term sick pools affect the stated effort percentages on a project, it is recommended that a copy of the labor history, showing the transfer to the benefit pool, is included with the statement.  If effort was previously certified, a new LVS will be issued for signature.

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Institutional Base Salary

How should Institutional Base Salary be calculated?

  • For salaried employees, Institutional Base Salary (IBS) is calculated by taking an employee’s basic pay (0FAC/0SAL/0ADJ), and adding the annual rate for any administrative stipends (0ADM).  For example, an employee with a basic salary of $60,000 per year, plus a $1,000 monthly administrative stipend, would have an IBS of $72,000 per year ($60,000 + $1,000 * 12).
  • For hourly employees, the IBS is calculated based on the employee’s hourly rate, multiplied by 2080, the standard number of hours worked in a single year for a full-time employee (52 weeks, 40 hours per week).

How is IBS used?

  • IBS is used for two primary purposes.  First, it used when preparing budgets for sponsored programs, and paying employees from these programs.  If an employee commits 10% effort to a project, the project should pay the equivalent of 10% of the employee’s IBS.  Please note, however, that while stipends are included in the calculation of IBS, admin stipends cannot be paid from sponsored projects.
  • The second purpose of the IBS is to determine the basis for the estimated hourly rate for faculty when calculating Extra Compensation (0EXC) payments.  For more information on how to calculate the hourly rate for EXC payments, please see question #4 in this document.

Why does IBS include basic pay and stipends, but not other pay types?

IBS is designed to represent the amount paid to an employee for execution of their regular duties.  This includes their basic pay (0FAC, 0SAL, 0ADJ), plus any standardized, recurring payments for ongoing and significant tasks, such as stipends (0ADM).  These payments represent the total effort of the employee, per Federal guidelines.  Bonuses (0BNS), awards (0AWD), royalties (0ROY), additional compensation (0ADL), intersession compensation (0EXC), moving expenses (0MOV, 0MVT), housing expenses (0HOU), retirement pay (0RET), and cell phone stipends (0CEL) are not included because they are not paid for execution of normal duties, they cannot be accurately projected, and they are designed to be incidental in nature. 

How do I calculate hourly rates for Extra Compensation (EXC) pay?

  • When calculating faculty EXC pay, an average “hourly rate” must be determined, and then multiplied by the number of EXC hours worked. 
  • To calculate this, first determine the faculty member’s IBS, by adding their basic pay to the annual rate of any administrative stipends.  Then divide the IBS by 1,280 to calculate the hourly rate (9-month faculty are considered to have a 32-week appointment; 32 weeks * 40 hours per week = 1,280 hours)
  • For example, if a professor has an annual salary of $75,000, plus an academic-year stipend of $1,000 per month for 9 months, and a summer stipend of $1,500 per month for three months, their IBS is:
    • $75,000 + ($1,000 * 9) + ($1,500 * 3) = $88,500
    • $88,500 / 1,280 hours = an hourly rate of $69.14
  • Calculated hourly rates for faculty can change throughout the year, due to pay increases or the addition, deletion, or modification of stipends.  Therefore, the rate should be recalculated each time the faculty member completes an EXC form.

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Salary Cost Transfer

What is a Salary Cost Transfer?

  • A Salary Cost Transfer is the reassignment of an expense to or from a sponsored project after the expense was initially charged elsewhere. Cost Transfers include reassignments of salary, wages and other direct costs.
  • Salary CTR is the acronym for Cost Transfer Request. The Salary CTR form is used to identify, explain, and justify cost transfers.

Where can I access the Salary CTR form?

Departments can access these forms from the SRS Web Site.

When is a Salary CTR required?

  • A Salary CTR form is required to move effort onto or off a sponsored project
    • Examples:
    • Effort is being moved:
      • From a Department Fund to a grant
      • From a Department Fund to cost share on a grant
      • From a Grant to a different grant
      • From a Grant to cost share
      • From Cost Share to a new grant
      • From Cost Share to a department fund

Who should complete the Salary CTR?

The department should complete the Salary CTR.

When should a Salary CTR be made?

A Salary CTR should be made as soon as a PCR has been submitted for the transaction. All Salary CTRs should be made promptly but no later than 90 days after the close of the month in which the transaction occurred.

Is justification required for a Salary Cost Transfer?

YES! All Salary Cost Transfers must include adequate justification for the transaction. An explanation should include what caused the modification to be necessary and what steps are being taken to prevent such errors in the future.

What is a Late Cost Transfer, and what is the policy covering this possibility?

  • Late Cost Transfers are Salary CTRs that are not completed within 90 days after the close of the month in which the transaction occurred. Late cost transfers moving a charge to a grant must be approved by the Vice President and/or Associate Vice President for Research and will only be granted in extenuating circumstances. Extenuating circumstances DO NOT
  • Include limited responses such as:
    • Absences of PIs or responsible administrator
    • Shortage or lack of experience of staff
  • Late cost transfers that are moving a charge off the grant to a department account (not another grant) do require late justification but do not require the VP’s or AVP’s approval.

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What is the process for completing a Salary CTR?

  • BA:  Complete PCR (or time correction form if hourly employee controlled via information type 9001)
  • BA:  Download Salary CTR workbook, save to local drive. Complete Salary CTR form. (Questions 1-4 are mandatory. Questions 5-6 are conditional. Answer N/A for question 4 if it doesn’t apply.)
  • BA:  Email completed Salary CTR form, a copy of the Labor History, and if applicable, agency approval, and/or time correction form, as attachments, to the PI(s) for approval. All PIs for all grants listed on the Salary CTR form must approve the transfer.

What information needs to appear in the Salary CTR email?

The subject line in the Salary CTR email that is sent to the Principal Investigator/Primary Investigator for approval must be completed as follows:

  • Department Cost Center #/Employee’s Last Name (Not PI, Not Grant #s) /SRSAD GA #(s)
  • If the subject line of the email differs from the format outlined above, the Salary CTR may not be received or processed.
  • The SRSAD GA #s can be found on the SRSAD Agency Assignment List tab in the CTR workbook, or in UCFlex using transaction GMGrantD (contacts tab).

Who should approve the Salary CTR?

The Principal Investigator/Primary Investigator on each grant affected by the reassignment of expense must approve the request. The Salary CTR must also be approved by the SRSAD GA for each grant and, if the request is over 90 days, it must also be approved by the Director of Sponsored Program Accounting, Vice President and/or Associate Vice President for Research.

Where is the Salary CTR sent upon completion?

Upon approval, the Principal Investigator/Primary Investigator must FORWARD the e-mail, leaving the subject line intact, with the Salary CTR and all supporting documentation attached, and must include a statement of approval within the body of the e-mail to CTR@uc.edu for review and processing.

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