How to Comply with Time and Effort Documentation

One major expense often associated with federal grants is employee compensation.

For example, in higher education, grants are often used to fund research projects.

Proper reimbursement and compliance requires that staff time be allocated to the grant in proportion to the time spent on it.

The challenge is that many employees perform functions across multiple grant-funded projects, in addition to administrative or operational tasks. And without proper internal controls, reporting can get hazy, putting both current and future funds at risk.

OMB Uniform Grant Guidance Requirements

Historically, time and effort requirements for federally funded grants varied in the education, nonprofit and government sectors. However, the new Uniform Grant Guidance standardizes these requirements cross industry in section 2 CFR 200.430.

It calls for strong internal controls to ensure that personnel costs are reasonable, allowable, accurate and properly allocated.

Time Tracking and Reporting Best Practices

To ensure that your organization is gathering accurate time and effort documentation that is compliant with OMB Uniform Grant Guidance, follow these best practices:

• Keep accurate records of personnel time to demonstrate work performed. For prime recipients, this also includes personnel activity reports from sub-recipients to ensure that expenses are allowable, accurate and properly documented.
• Don’t wait until grant reports are due to funders to compile staff timesheets. Require employees to submit their hours on a weekly or monthly basis for improved accuracy. The individuals completing the work should submit reports, as they will have the most direct knowledge of proper allocation.
• Gather timesheets for the total number of hours worked, including time allocated to non-grant related activities. This way, you can appropriately designate what portion of the individual’s salary can be attributed to the grant.
• Educate employees on the importance of accurate time tracking and reporting. Explain the big-picture ramifications of noncompliance, particularly how it could reduce future funding to the projects they care about most.
• Have supervisors review and approve employee timesheets to ensure that they are complete and factual. This also strengthens your internal controls.
• Link employee time to the appropriate grant. Split time and compensation expenses accordingly if working across multiple grant-funded projects. Divvy time based on actual hours worked, not estimates.
• Integrate grant management and HR software systems to easily sync payroll records with reporting for easier report generation.

For more on grant reporting, download our guide on the Changing Federal Grant Regulations.