Funders pay for hours spent on their program. The time record is the proof.
An outreach worker may spend 60 percent of the month on a county contract, 30 percent on a foundation grant and 10 percent on general administration. Each funder expects its share of the person’s pay to match the work done for it. Budget estimates are a starting point, but they do not replace records of actual time.
To record clock-ins, breaks and overtime automatically, see EZTime time and attendance software.
| Program | Hours | Share | Cost at $4,000 |
|---|---|---|---|
| County contract | 96 | 60% | $2,400 |
| Foundation grant | 48 | 30% | $1,200 |
| Administration | 16 | 10% | $400 |
For awards under the federal Uniform Guidance, charges for salaries must be based on records that accurately reflect the work performed, supported by a system of internal control, and reasonable in comparison with the actual work. Records do not have to be in hours in every case, and the rules allow some flexibility, but they must account for the total activity for which the person is compensated. Check your award terms and talk to your grants manager before you decide on a format.
Some funders let you count volunteer time as match at a stated hourly value. If so, keep a log of who volunteered, when, and what they did. Staff and volunteers who do similar work should be recorded in the same way, to avoid gaps in the match report.
Ask each employee to confirm their time at month end and have a supervisor approve it. A person who sees a mistake in March can fix it in an hour. The same mistake found in an audit months later takes a week and may not be fixable.
Before an audit, pick two months and compare time records to payroll and to the grant billing. Do the percentages line up? Is each timesheet signed? If not, correct the process now and document the change. Auditors respond better to an organization that found and fixed a problem than to one that learned of it from them.
Most time questions in a grant-funded program trace back to a handful of rules. Federal awards follow the Uniform Guidance at 2 CFR 200, issued by the Office of Management and Budget. Wage and hour rules come from the Fair Labor Standards Act, enforced by the U.S. Department of Labor. Your own award terms and any state or foundation contract add to both.
| Rule | Who sets it | What it means for time |
|---|---|---|
| 2 CFR 200.430(i), documentation of personnel costs | Office of Management and Budget | Salary charges need records that reflect the actual work and cover all of the person’s paid activity |
| 2 CFR 200.334, record retention | Office of Management and Budget | Keep records three years from the final expenditure report, longer if an audit or claim is open |
| 2 CFR 200.306, cost sharing and match | Office of Management and Budget | Volunteer time counted as match needs records and a value consistent with similar paid work |
| Single Audit, 2 CFR 200 Subpart F | Office of Management and Budget | Required when federal spending in a fiscal year reaches $1,000,000 (for fiscal years starting on or after October 1, 2024) |
| Fair Labor Standards Act | U.S. Department of Labor | Non-exempt staff are owed overtime over 40 hours, whichever grant pays them |
The numbers here are fictional. A case manager earning $4,800 a month is budgeted 50 percent to a federal housing grant and 50 percent to a city contract. In March, the timesheets show 104 hours on housing cases, 52 hours on the city contract and 8 hours of general administration, 164 hours in total.
| Funding source | Budgeted | Actual share | Charge based on actual |
|---|---|---|---|
| Federal housing grant | $2,400 | 63.4% | $3,044 |
| City contract | $2,400 | 31.7% | $1,522 |
| General administration | $0 | 4.9% | $234 |
Charging the budget would understate the housing grant by $644 and push $234 of administration onto program funds. The fix is to post the actual split, or to make a documented adjustment before the end of the budget period, as your organization’s written policy describes. Either way, the timesheet is what supports the number.
A program assistant who stays after work to help at the Saturday food drive raises a real question. The U.S. Department of Labor generally does not treat paid employees of a private nonprofit as volunteers when they do the same kind of work they are paid for, for the same organization. If the Saturday task is part of their normal job, it is likely paid work and counts toward overtime. If it is genuinely different and freely chosen, it may be volunteer time. Write down the decision, keep the volunteer log separate from timesheets and ask counsel when you are unsure.
EZTime lets staff clock in from the mobile app, web or a tablet kiosk and tag each entry by job or client, which you can set up as one code per grant or program. Monthly attendance reports can be signed digitally by employees, timecard corrections keep an audit trail, and reports export to Excel or PDF for the finance team. Data history is kept for up to seven years, which helps with long retention periods.
If their pay is charged to a federal award, you generally need records that support the allocation, even if they are exempt from overtime.
Sometimes, if they reflect actual work and are reviewed regularly. Confirm with your funder.
The employee and a supervisor with first-hand knowledge of the work.
You still need records that support the charge, and federal wage rules still apply to non-exempt staff. A simpler record may be enough when all work serves one award, but confirm with your award terms.
Many federal awards allow volunteer services as cost sharing if they are needed for the project, documented, and valued at rates consistent with similar paid work in your area. Check the specific award before counting them.
Convert pay between formats
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This page is general information, not legal, payroll or tax advice. Rules differ by state, city and contract, and they change. Check with a qualified professional before you act. Numbers in examples are made up.