Time and Effort Reporting for Federal Grants

When you charge salaries and wages to a federal award, you must support the charges with records that accurately reflect the work performed. The Uniform Guidance does not require one specific time and effort form, reporting interval, signature, personnel activity report, or semiannual certification.

The sections below explain the requirements and some common ways to meet them.

Why time and effort records are needed

The legal requirement

Under 2 CFR 200.430(g), an organization that charges salaries and wages to federal awards must keep records that accurately reflect the work performed. The records must support how each employee's pay is split across awards and other activities.

The audit risk

Unsupported or inaccurate personnel charges are a common source of audit findings. They can lead to questioned costs, which the agency may later disallow and recover. They can also lead to findings that affect future funding, closer review in later audits, and, in serious cases, fraud investigations.

The practical purpose

Good time records also help you charge grants correctly, find grants that are overspent or underspent, plan budgets, and document what employees worked on.

What the rule says

2 CFR 200.430(g), standards for documentation of personnel expenses

The rule states:

"Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed."

Under 2 CFR 200.430(g)(1), the records must:

• Be supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable, and properly allocated
• Be incorporated into your official records
• Reasonably reflect the total activity for which you pay the employee, not exceeding 100 percent
• Cover federal awards and all other activities the employee is paid for
• Comply with your established accounting policies and procedures
• Support how you split the employee's pay among activities when the employee works on more than one award or activity

For nonexempt employees, 2 CFR 200.430(g)(3) also requires records of the total hours worked each day, in line with Department of Labor rules under the Fair Labor Standards Act. Salaries and wages that you count as cost sharing need the same support as salaries and wages you charge to the award.

What the rule means in practice

Your records and controls should:

1. Show what employees actually worked on.
2. Cover all paid activities, not only federal projects.
3. Be part of your official records.
4. Support the split of pay among awards and activities when an employee works on more than one.

Ways to document time

The approaches below are examples, not required formats. Auditors judge your system as a whole against 2 CFR 200.430 and the award terms.

Personnel activity reports

A personnel activity report (PAR) is prepared after the work is done. It usually shows total hours worked, the split across projects and activities, and the employee's and supervisor's signatures. Your control system sets how often employees complete PARs. Monthly or each pay period is common, but no federal interval applies to everyone.

Certifications for a single cost objective

Some organizations use a periodic certification for employees who work on only one cost objective, for example:

"I certify that 100% of [Employee Name]'s time from [date] to [date] was spent on [Grant Name]."

Certifications come from older guidance, and some agencies still require them. The current 2 CFR 200.430 does not create a government-wide semiannual certification requirement. Working on one cost objective is not always the same as working on one grant, so follow your agency's and award's terms.

Daily time records

Daily time records show hours by project or activity and are prepared as the work happens, not estimated afterward. Examples include timesheets, time-tracking software, and project logs.

Other internal control systems

The current rule sets standards instead of a format. You generally do not need federal approval to choose a different documentation format, although agency or award terms may require approval. Your system must provide reasonable assurance that the charges are accurate, allowable, and properly allocated.

Creating compliant time records

Useful elements

Depending on your system, useful elements include:

• Employee name and ID
• Pay period dates
• Total hours worked, including hours on activities that are not grant-funded
• Hours by project or grant
• Evidence of the review your controls require, with the date
• History of corrections and reconciliations

Sample time record

Date	Total hours	Grant A (federal)	Grant B (state)	General admin	PTO
1/6	8	4	2	2	0
1/7	8	3	3	2	0
1/8	8	5	1	2	0
...	...	...	...	...	...
Total	80	35	20	20	5
%	100%	43.75%	25%	25%	6.25%

What counts as actual activity

Your records must reflect the time actually worked on each project. They must also cover the employee's total paid activity and support a reasonable split among cost objectives.

Budget estimates alone do not support final charges. Under 2 CFR 200.430(g)(1)(vii), you may use them for interim charges if your system produces reasonable approximations of the actual work. You must also promptly record significant changes in the work and review the interim charges after the fact. Short-term changes of one or two months do not need adjustment if the split is reasonable over the longer term.

You may use a standard allocation only when the facts and your controls make it an accurate reflection of the work performed. An allocation chosen to use up a budget is not evidence. When records or payroll distributions are wrong, make supported corrections, not retroactive changes made only to use a budget.

Periodic certifications

When organizations use them

Some organizations or awards use certifications when an employee works 100% on one federal award or 100% on activities charged to one cost objective.

Sample certification

SEMI-ANNUAL CERTIFICATION

I certify that for the period [Start Date] to [End Date],
[Employee Name] worked solely on [Grant Name/Number].

This certification is based on my direct knowledge of
the employee's work activities.

Employee Signature: _______________ Date: ___________

Supervisor Signature: _____________ Date: ___________

Set the timing based on your internal controls and any agency or award requirement. The current Part 200 does not require a six-month interval.

Budget estimates compared with actual time

The problem with estimates

Many organizations follow a pattern that creates findings. First, they budget 50% of an employee's salary to a grant. Second, they charge 50% each month automatically. Third, they never compare the charge to the time actually worked. The pattern does not meet the rule unless your system produces reasonable approximations and you adjust the charges to reflect the work performed.

Required review of interim charges

If you use estimates for interim charges, you must:

• Promptly identify significant changes in the work, as your written policy defines them, and record them.
• Review interim charges after the fact and make all needed adjustments, so the final charge is accurate. The rule does not set a quarterly interval or a variance percentage.
• Document the review.

Example adjustment

Employee	Budgeted to Grant A	Actual time	Adjustment
Smith	50% ($25,000)	47% ($23,500)	Credit $1,500
Jones	30% ($15,000)	33% ($16,500)	Charge $1,500

Common audit findings

No time records

The organization charged salaries to grants with no records. To fix the problem, find out what official records and controls support the charges, correct any unsupported charges, and set up a documentation system. Whether you must repay depends on the facts and on how the finding is resolved.

Records do not support the charges

The time records show a different split than the payroll charges. To fix the problem, adjust the charges to match the actual time.

Estimates were never reviewed

The organization charged budgeted percentages without checking the actual work. To fix the problem, review interim charges on a documented schedule that finds significant changes promptly, and adjust them as needed.

Missing review evidence

The records lack the review or approval that your internal controls or the award terms require. To fix the problem, follow your documented review control and keep the evidence. A signature is one possible control, but no federal rule requires it in every case.

Records prepared long after the work

Employees created time records months later from memory. To fix the problem, set a preparation and review schedule that produces reliable records. Weekly or every two weeks is one possible design, not a federal deadline.

Good practices

Make time tracking easy

Simple forms or software, a short and clear project list, training with examples, and regular reviews all improve the quality of time records.

Train staff

Make sure employees understand why time tracking matters, which activities belong to which projects, how to record split time, and when records are due.

Supervisor review

Supervisors who review time should know what the employee worked on. They should review records on time under your written policy, and they should question unusual entries. Two weeks is one example of a review deadline, not a federal rule.

Reconcile regularly

On a documented schedule that fits your payroll and risk, compare time records to payroll charges, find the differences, record adjusting entries, and document the reconciliation.

Keep records

Keep all time and effort records for at least three years from the date you submit the final financial report, under 2 CFR 200.334. Some situations start the period later or extend it, e.g., litigation, claims, audits, written notice from the agency, property rules, or your own policy. Keep the records available for audit.

Setting up a system

Using spreadsheets

A small organization can use a simple process:

1. Create a weekly timesheet template.
2. List all projects and grants.
3. Have employees complete it each week.
4. Have supervisors review and approve it.
5. Use the approved timesheets to allocate salaries in payroll.

Using time-tracking software

Many time-tracking tools connect to payroll. You can set up projects that match your grants, have employees log time daily or weekly, and run reports. Some tools also offer certification workflows.

Connecting time records to payroll

However you track time, make sure the payroll charges match the approved time. Either export the percentages to your payroll system or use your payroll system's time tracking, and keep the documentation linked to each pay period.

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How GrantLink supports this today

GrantLink keeps grant allocations based on QuickBooks Online transactions, along with budget lines, fund receipts, funding shares, documents, reports, and activity history. You can use these records when you prepare for an audit. GrantLink does not replace funder guidance, your accounting policy, or review by your accountant or auditor.