Personnel Time Documentation Under 2 CFR 200: What INGOs With U.S. Federal Awards Should Know

Many international NGOs (INGOs) working in East Africa hold U.S. federal awards, and some of those began as USAID awards. According to the U.S. Government Accountability Office (GAO-26-108607, 30 September 2026), USAID stopped administering foreign assistance awards as of 1 July 2025, and the Department of State now manages the remaining active awards. State's Office of Inspector General has reported that updating the terms of those transferred awards took time, so the terms and conditions in your own award documents are the starting point.

What has not changed is the core federal cost rule for salaries. The State Department adopts OMB's Uniform Guidance at 2 CFR 200 through its own regulation, 2 CFR 600. For foreign non-profit organizations, that includes Subpart E, the cost principles, where 2 CFR 200.430 sets the standards for documenting personnel expenses. This article walks through what that section says and where staff time records fit in.

What 2 CFR 200.430(g) Says About Documenting Staff Time

2 CFR 200.430, "Compensation — personal services," is part of the federal cost principles. Its paragraph (g), "Standards for documentation of personnel expenses," states that charges for salaries and wages must be based on records that accurately reflect the work performed. Among other points, paragraph (g)(1) says those records should:

• be supported by a system of internal control that gives reasonable assurance the charges are accurate, allowable and properly allocated;
• be incorporated into the organization's official records;
• reflect the total activity for which the employee is compensated, not exceeding 100 percent of compensated activities;
• encompass federally assisted and all other activities the employee is paid for;
• support the distribution of an employee's salary among specific activities or cost objectives when the employee works on more than one.

Daily hours for FLSA-nonexempt staff. Paragraph (g)(3) adds that, for employees who are nonexempt under the U.S. Fair Labor Standards Act, records must also show the hours worked each day (see 29 CFR Part 516). The FLSA generally does not cover work performed in a foreign country (29 U.S.C. 213(f)), so whether this applies to a given staff member is a question for your HR and legal advisers.

Budget estimates. On estimates, the regulation is explicit: estimates made before the work is performed alone do not qualify as support for charges to federal awards. Paragraph (g)(1)(vii) allows them for interim accounting only if they are reasonable, significant changes in work activity are promptly identified and entered into the records, and internal controls include periodic after-the-fact reviews of those interim charges, with any necessary adjustments made so the final amount charged is accurate. The regulation does not set a percentage threshold or a fixed review frequency; some organizations set their own in written policy.

Recent changes, in order

• 22 April 2024 — OMB published revisions to the Uniform Guidance (89 FR 30046), effective 1 October 2024. Among other changes, the personnel documentation standards now sit in 200.430(g) (previously 200.430(i)), the Single Audit threshold rose from $750,000 to $1,000,000 in federal expenditure per fiscal year (200.501), and the de minimis indirect cost rate rose from 10% to up to 15% of modified total direct costs (200.414(f)).
• August–October 2024 — USAID moved to the 2024 revisions: its standard provisions applied them to awards issued or amended from 7 August 2024, and it revised its assistance regulation (2 CFR 700) effective 1 October 2024. This is now history for awards State has taken over.
• 1 July 2025 — USAID stopped administering foreign assistance awards, and State manages the remaining ones (GAO-26-108607).
• 29 May 2026 — OMB proposed a broad rewrite, "Regulation for Federal Financial Assistance" (91 FR 32198). As of this article it is a proposal, not a final rule; check federalregister.gov for its current status.

Prior approvals. Under 200.308(f), recipients need prior approval for, among other things, a change in key personnel named in the award and a 25 percent reduction in time and effort by the approved project director or principal investigator.

Audits. The Single Audit (Subpart F) applies to U.S.-based non-federal entities above the threshold. Under 2 CFR 600.101, State applies Subparts A–E, not Subpart F, to foreign non-profit organizations, though their award terms may set other audit requirements.

Where Time Records Tend to Come Under Scrutiny

Federal auditors, including inspectors general and independent audit firms, test whether personnel charges are supported, allowable and allocable. USAID's Office of Inspector General, which kept oversight jurisdiction over former USAID programs under the Consolidated Appropriations Act, 2026, has published audits in which direct labor charges lacked complete supporting documentation. Read against the wording of 200.430(g), situations that are hard to support include:

• fixed percentage splits charged month after month without an after-the-fact review against actual work;
• total effort across awards adding up to more than 100% of an employee's compensated time;
• timesheets completed long after the work, which weakens their value as a contemporaneous record;
• approvals by people with no knowledge of the work.

Where records fall short, the regulation allows the federal government to require personnel activity reports (200.430(g)(8)), and auditors may report unsupported amounts as questioned costs for the awarding agency to resolve. Published examples are in the audit reports on oig.usaid.gov and stateoig.gov.

Working Across Donors: One Example From the EU

Field staff often split their time between U.S. awards and other donors, and each donor has its own rules. As one example, DG ECHO's humanitarian grant agreement (Article 6.2.A) calculates a daily rate from annual personnel costs divided by 215, and caps declared day-equivalents at 215 per person per year; average personnel costs are an alternative where they are the partner's usual accounting practice. ECHO asks that days worked be identifiable and verifiable, supported by time records or signed declarations. U.S. awards under 2 CFR 200.430, by contrast, look at an employee's total compensated activity. For other donors, including the EU's DG INTPA and the UK's FCDO, the rules are set in each grant agreement, so those documents are the place to check.

Because the methods differ, many country offices find it useful to record daily hours by project code. Those records can support a day-based calculation for one donor and a percentage-of-total-activity distribution for another.

The Low-Connectivity Reality

Field locations with unreliable connectivity — Turkana or Garissa in Kenya, West Nile in Uganda, remote South Sudan bases — often push offices toward paper timesheets or month-end spreadsheets. Measured against the "accurately reflect the work performed" standard in 200.430(g), these practices can bring:

• Recall bias — staff can't accurately reconstruct hours worked three to four weeks earlier;
• Transcription errors — moving paper to spreadsheets introduces mistakes and missing signatures;
• Weaker audit trails — spreadsheets created after the fact lack trusted timestamps.

On monitoring. Contemporaneous time records matter, but invasive monitoring — keystroke logging, webcam capture, desktop surveillance — carries its own ethical and legal risks in humanitarian settings. Field staff handling sensitive participant data should not be subject to invasive surveillance; depending on the facts, it may raise issues under national data protection laws such as Kenya's Data Protection Act (2019) or Uganda's Data Protection and Privacy Act (2019), and it can erode trust. 2 CFR 200.430 asks for records that accurately reflect the work performed. It does not ask for behavioral tracking.

Spreadsheets vs. Wisertrack

What INGO Finance Teams Commonly Put in Place

1. A written policy on effort reporting, allocation and review that references 2 CFR 200.430 and the award terms. Any variance threshold or review frequency in it is the organization's own policy, not a federal number.
2. Activity codes that match the award — project categories aligned with approved budget lines and cost objectives, with separate codes for overhead, leave and unallowable activities.
3. Regular time recording — daily or weekly rather than month-end recall, with a plan for teams in low-connectivity locations.
4. Approval by people who know the work — supervisors with direct knowledge of the activity approve timesheets before payroll.
5. After-the-fact review of interim charges — where salaries are charged from budget estimates during the year, a periodic comparison with actual effort and a record of the adjustments.
6. A current file — timesheets, approvals, payroll summaries and adjustment records, kept for the retention period in the award terms.

FAQ

What can happen if time records do not support salary charges?

Auditors may report unsupported salary charges as questioned costs. The awarding agency (now State, for most former USAID awards) decides whether costs are allowable and what remedy applies under the award and 2 CFR 200.

Can salaries be charged from budget percentages?

2 CFR 200.430(g)(1)(vii) says budget estimates alone do not qualify as support. They may be used for interim accounting if they are reasonable, significant changes are promptly recorded, and periodic after-the-fact reviews lead to any necessary adjustments. The regulation does not set a percentage threshold.

What did the 2024 Uniform Guidance revisions change?

Effective 1 October 2024 (89 FR 30046), they moved the personnel documentation standards to 200.430(g), raised the Single Audit threshold to $1,000,000 and raised the de minimis indirect rate to up to 15% of MTDC.

Do the rules still apply now that USAID no longer administers awards?

State manages the remaining former USAID awards (GAO-26-108607). State adopts 2 CFR 200 through 2 CFR 600 and applies Subparts A–E, including 200.430, to foreign non-profit organizations. The current terms and conditions of each award are the place to confirm this.

How does this differ from EU ECHO?

ECHO calculates a daily rate from annual personnel costs ÷ 215 and counts days worked on the action. 2 CFR 200.430 distributes salary based on total compensated activity.

Do the rules require specific software?

No. 2 CFR 200.430 sets standards for the records, not a particular system or template.

Sources

1. GAO-26-108607 — USAID: status of programs and awards (30 Sep 2026)
2. State OIG AUD-FA-26-17 — administration of awards transferred from USAID
3. 2 CFR 600.101 — State Department adoption of 2 CFR 200 (eCFR)
4. 2 CFR 200.430 — Compensation, personal services (eCFR)
5. 2 CFR 200.308 — Revision of budget and program plans (eCFR)
6. 2 CFR 200.414 — Indirect costs (eCFR)
7. 2 CFR 200.501 — Audit requirements (eCFR)
8. Guidance for Federal Financial Assistance, 89 FR 30046 (22 Apr 2024)
9. Regulation for Federal Financial Assistance, proposed rule, 91 FR 32198 (29 May 2026)
10. USAID OIG oversight plan FY 2026–27
11. 29 CFR 516.2 — FLSA records (eCFR)
12. 29 U.S.C. 213 — FLSA exemptions (Cornell LII)
13. DG ECHO Partners Helpdesk — eligibility of personnel costs
14. Kenya Data Protection Act, 2019 — Kenya Law
15. Uganda Data Protection and Privacy Act, 2019 — ULII