Do we need timesheets for federal grants?

Where the myth comes from

Before the Uniform Guidance, the cost rules for nonprofits (OMB Circular A-122) were stricter: monthly activity reports, signed after the fact. "Timesheet" became shorthand for that record. The current rule focuses on what the records show, not the form they take. So small organizations sometimes build timekeeping systems they were never asked for, or panic when they find they don't have one.

What is actually required

Under 2 CFR 200.430(g), the records must do six things. They must reflect the total activity the employee is paid for, cover federal and non-federal work alike, sit inside your official records, rest on internal controls, follow your own established accounting policies, and show how the salary splits across grants and programs.

Nowhere does that say "timesheet." It describes a standard your records must meet.

The one place hours are required

There is a real exception, and it is easy to miss if you read only the headline. It covers nonexempt employees: staff the Fair Labor Standards Act entitles to overtime pay. Some are paid by the hour and some are salaried. What counts is whether the law owes them overtime, not how they are paid. For them, §200.430(g)(3) points to Department of Labor rules under the Fair Labor Standards Act (29 CFR part 516), and says your charges must also rest on records showing the total hours worked each day.

So for nonexempt staff you do need a daily hours record. §200.430(g)(3) requires it for any nonexempt salary or wages you charge to a federal grant, and federal wage-and-hour law requires it of covered employers anyway, grant or no grant. The effort-distribution record sits on top of it. For exempt staff, neither asks for a daily hours record.

What this changes in practice

It means you can pick a method that fits how your organization actually works, as long as you can describe it, apply it consistently, and defend the output. For a five-person organization that might be a monthly activity record per person, reviewed and certified by a supervisor. For a larger one it might be detailed daily entry. For the monthly record, a time and effort certification template gives you one ready to copy.

It does not mean documentation is optional. The obligation is real, and payroll allocation is an area auditors test. What's optional is the format.

What good records look like

• Total activity. Every hour lands somewhere, grant, program, admin, fundraising.
• Contemporaneous. Created close to when the work happened, with a date that shows it.
• Signed off. A dated sign-off by someone with firsthand knowledge. Good practice, not a rule in §200.430.
• Consistent. Same method every period. Changing approach mid-year invites questions.
• Reconciled. Ties back to payroll and to what the grant was charged.
• Written down. A one-page policy describing all of the above.

The honest caveat

Your specific award may add requirements. Federal agencies issue their own guidance. And a pass-through entity, a state agency or a larger nonprofit, can set stricter terms in your subaward agreement than the federal minimum.

So here's the accurate statement. The Uniform Guidance does not require timesheets as your effort record. But §200.430(g)(3) and wage-and-hour law both require daily hours for nonexempt staff, and your grant agreement may add more. Read the agreement, and ask your grant officer if it's unclear.

This is general information, not legal or accounting advice. Federal grant rules change and are applied differently by different agencies and auditors. Check with your auditor, your grant officer, or an attorney before relying on any of it.

The Ember tool for this

Ember Time

Ember Time lets your team log time by program, and you approve the week. Approved hours for hourly staff become each program's staff cost at the rate you set. Unlimited users on every tier.

Sources: 2 CFR Part 200 (eCFR), §200.430. Verified 27 September 2026.