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Budgeting Personnel

 

As you are building budgets, or looking at rebudgeting in post-award, it is important to understand the different methods of calculating effort and the impact of different employment arrangements for those at the UM and expectations of particular sponsors.

Effort as a Percentage

Internal budgets and some external sponsors tend to calculate in terms of a percentage.   Whether the individual has a full 1.0 FTE or a partial appointment, for example 0.8FTE, all employees of UM have 100% appointments to allocate.  Budgets should be built on the institutional base and the % of time (out of 100%) is applied to calculate the reasonable amount to charge the sponsor.  

Example 1:  Full 1.0 FTE:

The staff member will work half their time on the project, it is 50% requested.

Example 2:  Partial 0.8 FTE:

The staff member will work half their time on the project, 50% of their university appointment requested.

Note:  The institutional base for the two individuals will be different, but the effort % is the same.

Effort in Calendar Months

Many sponsors require that effort be requested in person months rather than by %.  Person months can be broken down into calendar, academic and summer months.  Medical School faculty typically have calendar year appointments, therefore effort is reflected in calendar months.  We highly recommend working with a participating academic unit closely if you have participants that are on an academic or summer month appointment.   Some high-level notes are below.

To calculate calendar months take the % effort the person will spend on the project and multiply by the FTE appointment at the U and multiply by 12 (for the 12 months in the year). 

Example 1:  Full 1.0 FTE:

The PI will be working on the project at 25% effort.  25% (or .25) x (1.0 FTE x 12 months) = 3.0 calendar months

Example 2:  Partial 0.8 FTE:

The PI will be working on the project at 25% effort.  25% (or .25) x (0.8 FTE x 12 months) = 2.4 calendar months

Note:  To calculate academic or summer months, it is a similar method of applying effort against the FTE and base calendar months; however, the calendar months become the number months of the appointment (9 months for academic / summer months depend on the home unit and the individual’s employment arrangement.)

Effort in Labor Hours

Occasionally sponsors (including federal contracts) ask for budgets based on a per labor hour calculation.   It is important to know that the University’s effort tracking system does not allow exempt employees to track effort on an hourly basis.  Instead, we recognize a work week that is “normalized” to 40 hours and a total work year of 2080 hours.  A statement could be phrased:  Effort represented is based on a standard 40 hour work week. Effort tracking systems will be collected in % effort and converted for recovery.  It is easiest to think about the effort needed in terms of a percentage and convert it to the needed hours requested.

Example 1:  Full 1.0 FTE:

A technician will be working on the project at 25% effort.  25% (or .25) x (2080 hours) = 520 hours

Example 2:  Partial 0.8 FTE:

A technician will be working on the project at 25% of their partial appointment.  25% (or .25) x (0.8 FTE x 2080 hours) = 416 hours