Frequently Asked Questions (FAQ) for Labor Verification

Administration and Finance

Government Cost Compliance

Frequently Asked Questions (FAQ) for Labor Verification

1) What is a Labor Verification Statement (LVS)?

2) Why do we have LVSs?

3) How often are LVSs required?

4) Who has to complete an LVS?

5) Describe the LVS Types?

6) How do I complete the LVS?

7) What if a restricted project doesn’t have an account yet or the account doesn’t appear on the LVS and you are working on it?

8) Who can sign the LVS?

9) What if the appropriate signatory is unavailable?

10) How should the information on the LVS be verified?

11) What types of pay are included on the LVS?

12) What if the amounts reported on the LVS do not reflect actual work performed?

13) How are changes made to Labor History?

14) What if the amounts reported on the LVS do not match the Labor History?

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

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

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

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

1. What is a Labor Verification Statement (LVS)?

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

2. Why do we have LVSs?

§ LVSs are required by federal regulations found in OMB Uniform Cost Principles. 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.

3. How often are LVSs required?

§ Once each academic semester (3 per year)

4. 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.

5. What are LVS Types?

§ Type 1: Statements are grouped by project (SAP grant number), rather than by employee. They include the effort for every employee who worked on a particular grant during the period. The PI, whose name appears at the top, signs one time for the entire group. There is an additional section on the bottom of these statements that displays full‐time faculty effort on the project. This is for the PI’s reference, as the PI does not certify for these employees.

§ Type 2: Statements are for full‐time faculty and most academic director positions (i.e. President, Provost, Deans, Dept. Heads, and Directors Academic). They appear similar to the statements you have seen in the past, and cover 100% of the effort for each employee. These statements are routed to the home department of the employee, who should sign and date accordingly. Please note that there is now only one signature line on each statement to eliminate any confusion.

§ Type 3: Statements are limited to one per department. This statement covers the non‐sponsored effort (referred to as “all other” effort on past statements) for part‐time faculty, staff, and students who worked on sponsored programs. In the past, the “all other” section for part‐time faculty, staff, and students was signed by an individual (often the department BA) to certify that the amount listed was a reasonable estimate of time spent on non‐sponsored activities. This will still be the case, but now, the effort for all part‐time faculty, staff, and students will be covered by this single statement, and the non‐sponsored effort for these employees will be certified on the Type 1 Statement described above.

6. How do I complete the LVS?

§ Verify the percentage of effort actually performed during the semester. Then sign, date and return the LVS to GCC.

7. What if 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

8. Who can sign the LVS?

§ Principal Investigators (PI's): PI's must sign a Type 1 LVS for each project during the period. The Type 1 lists the effort for all Part-time Faculty, Staff, and Graduate Students with effort on the grant.

§ Full-time Faculty (Non-PI's): should sign their own Type 2 LVS’s.
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.

9. What if the appropriate 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.

10. 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.

11. 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.

12. What if the amounts reported on the LVS do not reflect 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.

13. 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).

14. 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.

15. 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.

16. 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 semester worked. If a person only worked two weeks of a semester, the LVS should still total 100% (based on the distribution of those two weeks).

17. 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.

18. 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.

labor_verification_statement_faqs 1 Revised: June 6, 2014