Time and Effort Certification Workflow (Federal Grants)

Time-and-effort certification is the documentation control that makes payroll allocation credible. Without it, every salary charge to a federal award is an assertion unsupported by evidence. With it, the allocation has a paper trail an auditor can test. The certification workflow itself is not complicated — it is the discipline of running it every month that most organizations struggle with.

When to run this workflow

Run this workflow each month, aligned to your payroll and grant close cycle. Certifications should be distributed to employees within two weeks of month-end and returned within a week of distribution. The entire cycle — distribution, completion, collection, and reconciliation to payroll — should close before you submit any monthly financial progress reports to funders.

For employees on semi-annual certification (those working 100% on a single award), run the cycle at the six-month marks of the grant year and at fiscal year-end. Confirm annually that the list of semi-annual certifiers still qualifies — an employee who picked up a small second-award assignment no longer meets the single-award criterion.

Common pitfalls

Applying semi-annual certification to employees who do not qualify. An employee working 80% on one federal award and 20% on administrative duties is not a single-award employee — the 20% is a separate cost objective. Monthly certification is required. Auditors know this rule and test for it by looking at how employees are classified and whether the certification frequency matches.

Distributing certifications late. Certifications requested 90 days after the period ends are not credible after-the-fact records. They are reconstructions from memory, payroll reports, and email review. Auditors can tell the difference. Build the distribution into the close calendar so it happens automatically within two weeks of period end.

Filing certifications without reconciling to payroll. The certification and the payroll allocation must agree. Many organizations collect certifications and file them without comparing the percentages to what was posted. The comparison is the control — the filing without comparison provides no assurance.

Accepting certifications that cover the wrong period or lack a date. A certification for “April” that does not specify the year, or one that covers “the grant period” rather than a specific calendar period, is not compliant. Certifications must identify the specific period covered and be signed by the certifier with a date.

Audit trail requirements

For each pay period or month, maintain:

A complete list of employees with federal grant charges for the period
Completed and signed certifications for each employee, covering the correct period
The reconciliation worksheet comparing certification percentages to posted payroll allocations
Any correcting journal entries with the supporting certification basis
Notation if any employee’s certification was late, with the date received

Store by employee and by period so auditors can sample in either dimension. A common audit approach: select a sample of employees, request all certifications for the audit year; then select a sample of months, request all certifications across all employees. Your filing system must support both.

How GrantPipe automates this

GrantPipe sends certification requests to employees on the schedule you configure, tracks completion status, and flags overdue certifications before the monthly close. When certifications are submitted, the system compares the stated percentages to the payroll allocation and surfaces discrepancies as exceptions to review. The reconciliation that would otherwise require a manual spreadsheet comparison runs automatically. Start a trial.

Free resource

Get the Nonprofit Grant Compliance Checklist

A practical checklist for post-award grant compliance: restricted funds, reporting cadence, audit prep, and common failure points. Delivered by email.

Under 2 CFR 200.430, charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed and are supported by a system of internal controls providing reasonable assurance of proper charges

Source: OMB 2 CFR 200.430

Semi-annual time-and-effort certification is permitted only for employees working solely on a single federal award; employees on multiple awards must use more frequent certification under 2 CFR 200.430(i)

Source: OMB 2 CFR 200.430(i)

Personnel costs are consistently among the largest single audit findings categories, with time-and-effort documentation deficiencies cited across federal programs in GAO and OIG reports

Source: GAO Federal Grants Management Reports

After-the-fact confirmation: The principle in 2 CFR 200.430 requiring that payroll charges to federal awards reflect actual time worked, certified by the employee or a responsible supervisor after the work period ends, not based on prospective budget plans.

Time-and-effort certification: A signed document confirming an employee's actual time distribution across grants and other activities for a specified period. Required under 2 CFR 200.430 for all employees whose compensation is charged to federal awards.

Semi-annual certification: A time-and-effort certification covering six months, permitted under 2 CFR 200.430(i) only for employees who work 100% on a single federal award or cost objective — not employees split across multiple awards.

Questioned cost: An expenditure flagged by an auditor as potentially unallowable, unsupported, or unreasonable. Payroll charges without supporting time certifications are a common category of questioned cost in Single Audits.

Q&A

How far back can we request certifications that were never completed?

You can request them as far back as needed, but their credibility decreases with time. A certification completed two years after the period it covers is not a reliable after-the-fact record — it is a reconstruction from memory. Auditors treat late-prepared certifications skeptically. The risk of questioned costs for periods without contemporaneous certifications remains even after late certifications are prepared.

Q&A

What if the certified time and the posted payroll do not match for historical periods?

Correct the payroll allocation retroactively for any period still within the grant's open window. If the grant has closed, a post-closeout correction may be required with federal agency approval. Document both the discrepancy and the corrective action. The root cause — why the certifications were not compared to payroll when they were completed — should also be identified and addressed.

Q&A

Does voluntary cost-share time need time certification?

If the organization committed voluntary cost-share in the federal award budget, that time must be documented with the same rigor as direct-charged time. It is not federally funded, but it is committed and auditable. Include it in the time certification as a separate cost objective.

Frequently asked

Frequently Asked Questions

What is the after-the-fact confirmation principle?

Under 2 CFR 200.430, payroll charges to federal awards must reflect actual time worked — confirmed after the fact by the employee or a supervisor with direct knowledge. The principle prohibits using budgeted or projected time distributions as the basis for payroll charges without subsequent reconciliation to actual time. Budget-based allocations that are never reconciled to actual time violate this principle.

Can a supervisor sign time-and-effort certifications instead of the employee?

Yes, under 2 CFR 200.430(i). The supervisor must have direct knowledge of the work performed — not just awareness of the assignment. A supervisor who was not present and did not directly observe the work cannot reliably certify based on firsthand knowledge. In practice, self-certification by the employee is more defensible and easier to explain to auditors.

What if an employee refuses to certify their time?

Any payroll charges to federal awards without a supporting time certification are questioned costs. The organization is responsible for ensuring certifications are completed. Management should establish a clear policy and escalation path for employees who do not submit certifications on schedule. Chronic non-compliance by specific employees is a compliance risk that management must address, not work around.

Do we need certifications for employees on indirect cost pools?

No — indirect cost certifications are handled through the indirect cost rate proposal and negotiation process, not through individual time certifications. Employees whose time is in the indirect pool are not charging direct costs to federal awards; their certifications are not required under 2 CFR 200.430. Verify which employees are in the direct pool versus the indirect pool.

What is the difference between a time sheet and a time-and-effort certification?

A time sheet records hours worked on specific days. A time-and-effort certification (also called an effort report or activity report) distributes an employee's total time across cost objectives as a percentage. Both are compliant if properly signed and completed. The percentage-based activity report is more common in nonprofits with complex multi-award environments; the detailed time sheet is more common in research settings.

Workflow: Time and Effort Certification