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Uniform guidance: time and effort reporting

uniform guidance, time and effort, government accountingMany questions have arisen regarding the Uniform Guidance on the reporting of personnel expenses and the need to record hours worked across multiple grants and responsibilities. The Standards for Documentation of Personnel Expenses can be found under section §200.430(i).

In reading the uniform guidance, we noted three things:

  • Paragraph (i)(1)(i) states first and foremost that the charges must “Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable and properly allocated.”
  • Paragraph (i)(1)(vii) states that an organization must have support for an employee’s allocation of salary or wages among multiple activities, but does not specify the exact method or support required.
  • Paragraph (i)(1)(ix) states that employees working under the Institutional Base Salary (IBS) are not required to allocate based on actual time spent, but may do so as a percentage of time spent among all the activities.
  • Paragraphs (i)(2) and (i)(3) specify that supporting documentation showing the total number of hours worked each day is required for any circumstance.

This information allows us to conclude that while organizations may continue to record actual time spent on each grant during payroll, you may instead allocate based on an estimate percentage of time spent so long as you can justify this allocation with support from your internal controls. Be mindful, if you do choose to change your process, to consider the controls as we note in paragraph (i)(1)(viii) that estimates alone do not qualify as support for allocations.

To provide an example, if a position was created to equally service three federal grants as well as administrative tasks, you could support an allocation of 25% of wages to each grant (and another 25% to administrative) by identifying the responsibilities of the position, the grants serviced by the position and the controls related to ensuring that time is spent as allocated. Controls relevant to this could be working on specific grants on specific days, setting pre-determined schedules to work on specific grants, or by keeping to the method used in the past of recording actual time spent on projects. Keep in mind for a control to be effective, it must be reconciled (if possible) and reviewed after the work has been performed.

This, however, may not matter if you happen to be a state, local government or Indian tribe as the process for allocating both salaries and wages to federal awards may be done in any other method that can quantifiably measure work performed as long as the method is approved by the Federal grant agency. Further information on this exception may be found in section §200.430(i)(5).

Corey McFarland