The following terms are commonly used when referring to the work that a university employee undertakes on a sponsored project:

Effort is the time spent on an activity by an individual, expressed as a percentage of the individual's total institutional activities, such as work on sponsored programs, teaching and instruction, service, or other duties. Effort cannot exceed one hundred percent (100%). Effort is not calculated based on a standard forty (40) hour work week, but is calculated as a percentage of the total hours spent on work-related activities.

Total Institutional Activities (or Total Effort) are all those activities for which an Individual is paid by the University to perform. Common activities include instruction (teaching and instructing students), public service, administrative duties (Chair, Dean, etc.), and research (proposal preparation and development, work on sponsored programs). Total Institutional Activities must equal 100% of a person's time.

Institutional Base Salary (IBS) is the annual compensation an Individual receives from the University in return for a particular set of institutional activities as determined by his/her appointment letter, contract, tenure code or as established in the appointment process. The IBS excludes: fringe benefit payments, reimbursed expenses, temporary supplemental compensation for incidental work, income earned outside of duties to the University, and any portion of the compensation deemed to be non-permanent. The IBS includes additional payment received for administrative duties associated with administrative appointments ("administrative supplements"). The IBS is used to compute compensation for personal services that is charged to sponsored programs, unless the policies of sponsoring agencies further limit salary charges. Academic (nine-month) appointments are annualized to determine an IBS monthly rate for quantifying Committed Effort in proposals. The IBS of a University employee shall not be increased as a result of replacing institutional salary funds with sponsored project funds.

Primary Individuals are those persons responsible for the conduct and management of the research or activity as described in the proposal/application or as indicated in the notice of award of a sponsored project. Primary Individuals include the following: Principal Investigator, Project Director, Co-Investigator, Co-Project Director, or those personnel with comparable responsibilities on a sponsored project. A Primary Individual typically, but not always, carries a faculty appointment.

Supporting Individuals are individuals other than the Primary Individual who expend effort on a sponsored program in benefit of the sponsored research.

Committed Effort, or Effort Commitment, is the amount of time and effort identified in a sponsored program proposal or application that is accepted by the sponsor for funding regardless of whether salary support is requested in support of that effort. It is the total effort committed to a sponsored program, expressed as the sum of: (1) effort proposed to be paid by the sponsoring agency and (2) contributed effort. Committed effort can be expended during the academic year, the summer, or both.

Contributed Effort (also known as cost shared effort) is the percent of Committed Effort that is contributed (to be paid and cost shared) by the University. It represents effort not directly charged (as a salary expenditure) to a sponsored project but committed to the sponsored program with University resources.

Minimum Level of Effort describes the smallest quantifiable amount of time and effort dedicated to a sponsored project. UT System Policy requires that Primary Individuals include at least a minimum level of effort on a sponsored project, either directly charged or cost-shared (as in the case when the Sponsor may restrict funding for faculty time, for example). The minimum level and a Primary Individual's actual effort should be commensurate with his/her responsibilities. At a minimum, a Primary Individual should include at least one percent (1%) of his/her time and effort on a proposed/awarded sponsored project for the period of performance. If a sponsored project does not include a direct charge to the budget for a portion of the Primary Individual's salary, then a portion of the salary must be committed to the sponsored project as voluntary committed cost sharing and is tracked and reported in the University's financial system to the sponsor under a cost sharing account. Some exceptions to this requirement are noted below:

1. Equipment/instrumentation grants
2. Limited-purpose awards such as travel grants or conference support
3. Special institutional awards
4. Training grants
5. Doctoral dissertation grants, fellowships or other awards intended as "student augmentation"
6. Supplements to existing awards (depending on the sponsor requirements)

Maximum Level of Effort by Individuals committed to a sponsored program varies, as most faculty members who may also serve as Primary Individuals generally have other responsibilities as part of their total institutional activities that would preclude them from devoting one hundred percent (100%) of their academic time to sponsored programs. In most situations, a Primary Individual may not have more than eighty percent (80%) effort committed on a sponsored program during the academic year, unless s/he receives approval from their appropriate academic supervisor (e.g. Chair, Dean). In addition, an individual with a nine-month appointment for the fiscal year who has committed effort on a sponsored program may be allowed a one hundred percent (100%) appointment during one or more summer months. However, the individual cannot perform other activities during that period (e.g. serving on institutional committees, writing proposals, etc.) whose costs are not allowable under OMB Circular A-21. In addition, that individual may not take vacation, attend conferences that do not directly benefit the sponsored project, or engage in any activity, including summer teaching or student supervision, that would cause them to devote less than 100% of their Time and Effort to the sponsored project. Supporting Individuals on sponsored projects (e.g. research technicians, research postdoctoral positions or research associates) may be allowed a one hundred percent (100%) appointment on a sponsored program with a similar level of effort, provided that the individual does not perform any other activities.

Effort Reporting is the process by which the University determines and documents the effort expended on sponsored projects during each effort reporting period. The effort report form documents the proportion of time devoted to sponsored projects, teaching, and other activities, expressed as a percentage of total institutional activities.

Effort Certification is a means of confirming that Committed Effort, whether paid on the sponsored award account or expended in support of a sponsored program but cost shared on the sponsored account, has been performed. Effort certification provides sponsoring agencies with a reasonable assurance that compensation for personnel services charged to a sponsored program is appropriate and reflects a reasonable estimation of the time spent working on the sponsored program.

A cost transfer is the reassignment of an expense to/from a sponsored project after the expense was initially charged to/from another sponsored project or non-sponsored project. Cost transfers include reassignments of salary, wages and other direct costs.

Cost Accounting Standards. Included as Appendix A Part 99005 – Cost Accounting Standards for Educational Institutions in OMB Circular A-21, these standards generally hold that costs charged to sponsored projects must be:

• allowable (the cost is allowed by federal regulations, sponsor terms and conditions, including program specific requirements and University policy);
• reasonable (reflects whether or not the individuals concerned acted with due prudence in the circumstances);
• allocable (the cost has a direct benefit to the account being charged); and
• treated consistently (like costs in similar instances are treated consistently throughout the University).

Cost Sharing is a portion of total sponsored project costs not funded by the sponsor. Cost sharing includes contributed effort, matching funds or commitments, and unrecovered facilities and administrative costs (F&A or indirect costs).

Mandatory Cost Sharing refers to funding, required by the terms and conditions of the award, that requires the University to contribute toward the project as a condition of receiving the award.

Voluntary Committed Cost Sharing is a cost associated with a sponsored project, which was identified in the proposal, but was not required or funded by the sponsor. Some common examples include:

• A percentage of effort of faculty or senior researchers included in a proposal budget or stated in the text of the proposal for which compensation was not requested; and
• The purchase of equipment for the project, identified in the proposal, for which funds have not been requested.

Sponsors may expect some cost sharing commitment to be identified in the proposal. If voluntary cost sharing is included in the proposal, it will become legally mandatory cost sharing if accepted by the sponsoring agency as a part of the award.

Voluntary Uncommitted Cost Sharing is a cost associated with a sponsored project and not funded by the sponsor, which was not committed in the proposal or in any other communication to the sponsor. This includes effort of faculty or senior researchers that is over and above that which is committed and budgeted for in a sponsored agreement and is thus not tracked or monitored.

A course buyout is the use of externally generated grant funds to cover part of a faculty member's salary, thereby releasing funds to his/her home department to use for replacement teaching or other such academic purposes. Course buyouts are meant to support a faculty member's scholarly activities in a way that enhances his/her scholarly productivity

A course release is the use of a limited number of release options that a department is granted by its home college to release a faculty member from teaching a course.

Workload policy is a uniform standard developed by an individual college for the purpose of providing guidance on how a faculty member can divide his/her total institutional activities (i.e., teaching, research, service, and administration). Workload policy typically specifies the types of assignments and the distribution of the percent of effort in each function.

OMB Circular A-21, Cost Principles for Educational Institutions, is a Federal Government circular that sets forth the rules governing the eligibility and calculation of costs in support of sponsored research, development, training and other works produced in agreement with the United States Federal Government. Section J.10 (General provisions for selected items of cost, Compensation for personal services) deals with effort on sponsored projects.