This document shall serve as the Department's guidance on the time and effort requirements for Federal Grants under the No Child Left Behind legislation.

OMB Circular A-87 Attachment B (8)(h) states:

Support of salaries and wages. These standards regarding time distribution are in addition to the standards for payroll documentation.

(1) Charges to Federal awards for salaries and wages, whether treated as direct or indirect costs , will be based on payrolls documented in accordance with generally accepted practice of the governmental unit and approved by a responsible official(s) of the governmental unit.

(2) No further documentation is required for the salaries and wages of employees who work in a single indirect cost activity.

(3) Where employees are expected to work solely on a single Federal award or cost objective , charges for their salaries and wages will be supported by periodic certifications that the employees worked solely on that program for the period covered by the certification. These certifications will be prepared at least semi annually and will be signed by the employee or supervisory official having first hand knowledge of the work performed by the employee.

(4) Where employees work on multiple activities or cost objectives, a distribution of their salaries or wages will be supported by personnel activity reports or equivalent documentation which meets the standards in subsection (5) unless a statistical sampling system (see subsection (6)) or other substitute system has been approved by the cognizant Federal agency. Such documentary support will be required where employees work on:

(a) More than one Federal award,

(b) A Federal award and a non Federal award,

(c) An indirect cost activity and a direct cost activity,

(d) Two or more indirect activities which are allocated using different allocation bases, or

(e) An unallowable activity and a direct or indirect cost activity.

(5) Personnel activity reports or equivalent documentation must meet the following standards:

(a) They must reflect an after the fact distribution of the actual activity of each employee,

(b) They must account for the total activity for which each employee is compensated,

(c) They must be prepared at least monthly and must coincide with one or more pay periods, and

(d) They must be signed by the employee.

(e) Budget estimates or other distribution percentages determined before the services are performed do not qualify as support for charges to Federal awards but may be used for interim accounting purposes, provided that:

(i) The governmental unit's system for establishing the estimates produces reasonable approximations of the activity actually performed;

(ii) At least quarterly, comparisons of actual costs to budgeted distributions based on the monthly activity reports are made. Costs charged to Federal awards to reflect adjustments made as a result of the activity actually performed may be recorded annually if the quarterly comparisons show the differences between budgeted and actual costs are less than ten percent; and

(iii) The budget estimates or other distribution percentages are revised at least quarterly, if necessary, to reflect changed circumstances.

Due to the regulation cited, it is required to provide time and effort documentation for any employee which is paid from more than one source.

This time and effort documentation must be contemporaneous and reflective of actual hours worked. A special system designed to meet this requirement is not required if the local entity can provide clear, concise and unambiguous documentation that the standard was met.

Semi-annual certifications may be used in lieu of time and effort documentation only in cases where the employee is conducting work under one cost objective and is funded from only one source. These semi-annual certifications, as authorized by OMB Circular A-87, must be signed by the employee and supervisor or just the supervisor if they have first hand knowledge of the information contained in the certification. These documents should be kept in the personnel file of the affected employee or in other conspicuous locations to aid in the audit and review of entity payroll information.

The Non-Regulatory Guidance for Title I fiscal issues dated May 2006 details how the LEA should document employee time and effort in schools that operate schoolwide programs in the question and answer E-8:

Generally, Attachment B.8.h(3) of Office of Management and Budget (OMB) Circular A-87, which contains government-wide cost principles that apply to the use of Federal funds by State and local governments and Federally recognized Indian tribal governments, provides that charges for the wages or salary of an employee who works solely on a single Federal program or cost objective must be supported by periodic certifications that the employee worked solely on that program or cost objective. These certifications must be prepared at least semi-annually and must be signed by the employee or supervisory official having first-hand knowledge of the work performed by the employee. If an employee works on multiple activities or cost objectives, Attachment B.8.h(4), (5), and

(6) require the employee to prepare personnel activity reports or equivalent documentation to support a distribution of his or her salary or wages among the Federal programs or cost objectives.

Application of the OMB Circular A-87 requirements to employees in a school operating a schoolwide program varies under different circumstances. For example:

1. If a school operating a schoolwide program consolidates Federal, State, and local funds under section 1114(a)(3)(C) in a single account, an employee who is paid with funds from the single account is not required to file a semi-annual certification. Because Federal funds are consolidated with State and local funds in a single account, there is no distinction between staff paid with Federal funds and staff paid with State or local funds from the single account. In effect, payment from the single account certifies that the employee works only activities of a single program or cost objective-i.e., the schoolwide program.

2. If a school operating a schoolwide program does not consolidate Federal funds it receives in a single account, an employee who works, in whole or in part, on a Federal program or cost objective must meet the OMB Circular A-87 requirements as follows:

(a) An employee who works solely on a single cost objective (i.e., a single Federal program whose funds have not been consolidated in a single account) must furnish a semi-annual certification that he/she has been engaged solely in activities supported by the applicable source in accordance with OMB Circular A-87, Attachment B, paragraph 8.h(3).

(b) An employee who works on multiple activities or cost objectives (i.e., in part on a Federal program whose funds have not been consolidated in a single account and in part on Federal programs supported with funds consolidated in a single account or on activities funded from other revenue sources) must maintain time and effort distribution records in accordance with OMB Circular A-87, Attachment B, paragraph 8.h(4), (5) and (6). The employee must document the portion of time and effort dedicated to:

(1) The Federal program and

(2) Each program or other cost objective supported by either consolidated Federal administrative funds or other revenue sources.

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