TLDR
T&E records are the evidence that connects salary charges to actual work. Without them, every federally charged salary is at risk of being questioned. The contemporaneous standard is not flexible — records dated after the work period they describe are not adequate, regardless of how accurately they might reflect actual effort.
Time-and-effort records are the most frequently missing documentation in federal grant audits — and among the most expensive to be missing. Salary costs are typically the largest line item in any grant budget. Without T&E documentation, those costs are at risk.
The Distinction Between Effort Reporting and Time Tracking
Effort reporting and time tracking are often confused, but they serve different purposes.
Time tracking records when an employee works, typically for payroll purposes — hours start and end, overtime, leave. Most organizations have some form of time tracking.
Effort reporting records what work an employee performed during that time — specifically, which grants or programs their work benefited. This is the documentation that links salary charges to specific federal awards.
Many organizations track time but not effort. An employee clocks 40 hours a week, but without effort records, there is no documentation of how those hours were distributed across a federal grant, a state grant, and general organizational activities. The time tracking exists; the compliance documentation does not.
The Contemporaneous Standard
The word “contemporaneous” in 2 CFR 200.430 is not decorative. Records that are prepared weeks or months after the work period they cover do not meet the standard.
Auditors are trained to examine record dates carefully. A T&E report signed for the month of October that was completed on November 30 is technically contemporaneous — it was completed within a reasonable window of the work period. A batch of monthly certifications for an entire year, all signed on the same day in June, is not contemporaneous. It is retroactive, even if the person who signed them genuinely believes they are accurate.
The reason the standard exists is that human memory is unreliable, especially regarding detailed effort distributions. A certification prepared a year after the fact reflects what the person thinks they did, not necessarily what the payroll records show was charged. The contemporaneous requirement protects both the grantee and the federal government from inaccuracies that are not intentional misrepresentations but are nonetheless inaccurate.
Consequences of Missing Records
When T&E records are missing for a period, the associated salary costs are questioned. The auditor cannot verify that the charged effort matches the actual work. Without that verification, the costs cannot be confirmed as allowable.
Questioned costs do not automatically become disallowed — the organization has an opportunity to provide documentation. But for missing T&E records, the available remedies are limited. If the records never existed, they cannot be created retroactively. The best available documentation — supervisor statements, grant-specific work products showing employee involvement, calendar records — may partially address the gap, but organizations should not rely on being able to reconstruct T&E documentation after the fact.
See Also
Free resource
Get the Time and Effort Certification Template
A 2 CFR 200.430-compliant effort reporting template for nonprofits with federal grants — covering personnel cost documentation, certification requirements, multi-source allocation, and a pre-audit documentation checklist. Delivered by email.
Q&A
What does 'contemporaneous' mean for T&E records?
Contemporaneous means records prepared at or near the time the work is performed — ideally recorded daily or weekly and certified at the end of each pay period. Records completed weeks or months after the work period they cover are not contemporaneous. Auditors examine the dates on T&E records relative to payroll periods to identify retroactive documentation.
Q&A
Is a Personnel Activity Report required for all grant-funded employees?
No. Employees working solely on a single federal program may use semi-annual certifications rather than monthly PARs. Full effort reporting (PAR or equivalent) is required only for employees whose time is distributed across multiple activities — multiple grants, a mix of federal and non-federal work, or multiple federal programs.
Q&A
What happens if T&E records are missing?
Salary costs charged to federal awards without adequate T&E documentation are questioned costs — auditors flag them as potentially unallowable. If the organization cannot provide documentation supporting the allocation, the questioned costs may be disallowed, requiring repayment of the federal share. Missing T&E records are among the most common and most costly audit findings for nonprofits.
Frequently asked