Finance Administrative Policies and Procedures
Section: 4- Grants and Contracts Accounting
Policy Procedure: 4-5.02
Subject: Compliance Requirements for Activity (Effort) Reporting
Effective Date: 7/1/2005
Responsible Department: Grants and Contracts Accounting


Questions regarding activity reporting systems and procedures should be addressed to Grants and Contracts Accounting at 792-2850.

This procedure explains the compliance requirements for Activity (Effort) Reporting at MUSC. As a recipient of Federal Agreements, MUSC must have systems and procedures in place to ensure compliance with applicable regulations concerning the documentation of the distribution of salaries and fringe benefits charged to sponsored programs and facilities and administrative (F&A) cost activities. Additionally, as a recipient of Medicare/Medicaid funds, MUSC is required to document clinical and hospital administrative activities in order to comply with Medicare/Medicaid Cost Reimbursement requirements.
General Guidelines

A. Activity Reporting Systems:

MUSC uses two systems/procedures developed in accordance with the applicable regulations contained in Office of Management and Budget (OMB) Circular A-21 (Cost Principles for Educational Institutions), Section J.8, entitled "Compensation for Personal Services":

1. Quarterly Activity Reporting System for Monthly-Paid Employees:

The Quarterly Activity Reporting System is used as the basis for distribution of salaries and wages for monthly-paid faculty and staff. Under this system, the distribution of salaries and wages is initially charged to UDAK projects based on a budgeted salary distribution. This distribution must subsequently be supported by quarterly after-the-fact electronic activity reports that reflect the employee's reasonable estimate of his/her activities being compensated. Monthly-paid employees must also document clinical and hospital administrative activities for Medicare/Medicaid Reporting through this system.

2. Time-Reporting System for Bi-Weekly-Paid Employees:

The distribution of salaries and wages for bi-weekly-paid employees is documented separately by MUSC's electronic time reporting system, manual time cards, or manual time sheets. No further certification or documentation is required in accordance with Circular A-21.

B. Employees Covered by Quarterly Activity Reporting Requirements:

1. All University Faculty, except Faculty with 100% effort in instruction.

2. All other University personnel who:

a. Direct charge or cost share effort to one or more sponsored agreements.
b. Distribute activities between direct and indirect activities.

3. Affiliate Personnel who are directly charged to sponsored agreements. For more information concerning affiliate entities, see Cost Accounting Standards / Affiliates Policies and Procedures.

C. Employee Responsibilities:

1. Each covered employee must review and electronically certify his/her Online Quarterly Activity Report within 60 days of each quarter end date.

2. The employee must provide a reasonable estimate of the distribution of his/her activities by activity category for each UDAK Project that funded his/her salary and fringe benefits for the quarter.

3. The employee?s reported effort percentages will be compared with the distribution of actual payroll charges by UDAK project in order to determine if retroactive adjustments to his/her salary distribution are necessary.

4. The employee is responsible for informing his/her supervisor or responsible official during the quarter if the distribution of salary charges should be modified based on a significant change in his/her activities.

D. Departmental Effort Coordinator Responsibilities:

Each department will appoint an individual to perform the duties of Department Effort Coordinator who will act as the central distribution point between the department and Grants and Contracts Accounting. The coordinator's responsibilities include:

1. Informing covered employees when the Online Activity Reports are available for review and certification.

2. Ensuring that the reports are electronically submitted to GCA by the stipulated due date.

3. Notifying the Departmental Business Manager or other appropriate departmental personnel if significant variances (greater than +/- five percent) are reported between the employee's effort percentages by UDAK project and the actual distribution of payroll charges by UDAK project.

4. Maintaining adequate documentation to substantiate any changes to an employee's salary distribution that will meet internal and external audit requirements.


Online Quarterly Activity Report:
Sample Form


A. Distribution of Quarterly Activity Reports:

1. Grants and Contracts Accounting will notify the Departmental Effort Coordinator via e-mail when the quarterly activity reports are available for review and certification online at the system's secure web site at:

2. A MUSC Network Account (MNA) User Id and Password are required to access the Online Activity Reporting System. Instructions and forms for obtaining an MNA account are found at The employee must complete the MNA Security and Confidentiality Agreement (link: under which he/she agrees not to reveal the MNA password and to take all reasonable measures to prevent disclosure of the password. Additionally, the employee is positively identified prior to being issued the MNA account. When the employee accesses the Online Activity Reporting System using the MNA account, the application electronically authenticates the MNA login versus his/her employee identification number and restricts access to allow the employee to review and electronically submit/certify only his/her individual activity reporting information. The Departmental Effort Coordinator must also access the system using his/her MNA login, and is allowed by the system to review his/her department/unit's activity reports, but he/she is not allowed by the application to electronically submit or certify any employees' activity reports

3. Step-by-step instructions for accessing and using the online system are provided at the following web addresses:  Online Activity Reporting System Department Effort Coordinator Guide Online Activity Reporting System Employee Guide

4. The Departmental Effort Coordinator will pre-review each of the online activity reports and then notify each of the covered employees in the department/unit using the e-mail function within the application when the report is available for review and certification.

B. Completion and Review of Activity Reports.

1. Each covered employee must submit his/her own quarterly activity report online. The employee's effort percentages must total 100% and must be distributed among the following categories. Complete definitions of the categories are provided here.

1. Sponsored and University Research

2. Cost Sharing

3. HouseStaff/Clinical Instruction

4. Clinical Services

5. Hospital Administration

6. Classroom Instruction

7. Other University Activities

3. When submitting the activity report online, each employee certifies the following statement to meet audit requirements:"I certify to the best of my knowledge and belief that the distribution of salary charges represents a reasonable estimate of activity during the stated period."

4. For terminated employees and other employees unavailable to submit reports online, a responsible official at least one organizational level higher than the employee with firsthand knowledge of the employee's activities must sign an activity report printed from the online system.

2. If the employee reports activity in any of the clinical categories (Clinical and House Staff Instruction, Clinical Services, or Hospital Administration), then the employee must provide an estimate of Average Hours per Work Week in order to meet Medicare/Medicaid Cost Reporting requirements.

C. Significant Changes in Effort Distribution:

1. If a significant change on the Activity Report is necessary to reflect actual effort of an employee, then the Departmental Business Manager or his/her staff must submit retroactive adjustments to salaries and fringe benefits charges on a timely basis in accordance with Procedure 4-3.12: Requesting a Cost Transfer to/from a Sponsored Project for Personal Service Expenditures. Although there is no precise definition for the term "significant", it has been construed as a general rule that a change applicable to a given project or activity of 5% or more of an employee's total effort warrants an adjustment. These adjustments should be implemented immediately following the employee's certification of the Activity Report.

2. Recognizing that workload requirements for projects and activities may vary from quarter to quarter, a significant change of greater than +/- 5% that is expected to average out to the budgeted level of effort over the course of the current fiscal year will not require retroactive salary adjustments.

D. Due Dates and Delinquent Reports:

1. Due dates will be indicated within the online system. Activity Reports are due 30 calendar days after distribution.

2. Activity Reports are considered delinquent if not completed within 60 days after the due date. Sponsored Projects UDAKs listed on any delinquent activity reports will be subject to suspension of expenditure privileges, including personnel charges, until all delinquent reports are submitted.

E. Retroactive Changes to a Certified Activity Report

1. A change to a previously certified Quarterly Activity Report resulting from a retroactive change to salary distribution should be rare and should be limited to the correction of errors. Such changes are subject to close audit scrutiny.

2. The employee must inform his/her Business Manager or Departmental Effort Coordinator and provide a full explanation to GCA as to why the previously certified report requires re-certification. The department must contact GCA for instructions on re-certifying the Online Activity Report.