What is time and effort reporting?

Why it exists

When a funder pays part of someone's salary, they are buying a share of that person's time. If your program director is budgeted at 40% on a federal grant but spent the year almost entirely on something else, the grant was charged for work it didn't get.

Time and effort documentation is how you demonstrate that didn't happen. Payroll can be a large share of a grant budget, so auditors look closely at it.

What the rules actually require

The relevant rule is 2 CFR 200.430, part of the Uniform Guidance that governs federal awards. It asks that charges for salaries be based on records that accurately reflect the work performed. Those records must:

• be supported by an internal control system that gives reasonable assurance the charges are accurate, allowable and properly allocated;
• be incorporated into the official records of the organization;
• reasonably reflect the total activity for which the employee is compensated, not just the grant-funded portion;
• cover all activities, whether federally funded or not;
• follow your own established accounting policies;
• support the distribution among specific activities or cost objectives.

Note the third and fourth points. The mistake to avoid is documenting only the grant-funded slice. If someone is 30% on a grant, the record needs to account for the other 70% too, or there is nothing to compare the 30% against.

What the rules do not require

They do not name a form. They do not mandate a particular tool. And they do not require timesheets as a set form. One exception: for nonexempt staff, hourly or salaried, §200.430(g)(3) also requires a record of total hours worked each day. What they require is a documented, consistently applied method that produces defensible records.

What is explicitly not enough is a budget estimate on its own. Deciding at the start of the year that someone is 40% on a grant, charging 40% every month, and never revisiting it is what §200.430(g)(1)(vii) rules out. Budget estimates can be used for interim charging, but they have to be reconciled to what actually happened.

Who this applies to

Any organization charging personnel costs to a federal award, including a subaward passed through a state agency, a city, or a larger nonprofit. Pass-through money is still federal money. If your funding came originally from a federal agency, these rules follow it down the chain.

What good practice looks like for a small organization

1. Write your method down

   One page: who records time, how often, what counts, who reviews it, who certifies it. An auditor asking "what is your process?" should get a document, not a description.

2. Record all time, not just grant time

   Every hour lands somewhere, a grant, a program, general administration, fundraising.

3. Record it as you go

   Contemporaneous records carry more weight than a reconstruction. A record created in March about March beats one created in December about March.

4. Have a supervisor confirm it

   Someone with firsthand knowledge of the work should certify the record, and that certification should be dated. A time and effort certification template gives you a signed, dated form to start from.

5. Reconcile to payroll

   What you charged the grant and what your payroll system paid should agree. Where estimates were used for interim charging, reconcile them to actuals and adjust.

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.

For more terms in plain English, see our nonprofit glossary.

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, compensation for personal services. Verified 27 September 2026.