Non-Profit Organizations (Requirements per OMB Circular A-122)
Support of salaries and wages. These standards regarding time distribution are in addition to the standards for payroll documentation.
- Charges to awards for salaries and wages, whether treated as direct costs or indirect costs, will be
based on documented payrolls approved by a responsible official(s) of the organization. The
distribution of salaries and wages to awards must be supported by personnel activity reports, as
prescribed in subparagraph (2), except when a substitute system has been approved in writing by
the cognizant agency. (See subparagraph E.2 of Attachment A.)
- Reports reflecting the distribution of activity of each employee must be maintained for all staff
members (professionals and nonprofessionals) whose compensation is charged, in whole or in part,
directly to awards. In addition, in order to support the allocation of indirect costs, such reports must
also be maintained for other employees whose work involves two or more functions or activities if a
distribution of their compensation between such functions or activities is needed in the determination of
the organization's indirect cost rate(s) (e.g., an employee engaged part-time in indirect cost activities
and part-time in a direct function). Reports maintained by non-profit organizations to satisfy these
requirements must meet the following standards:
- The reports must reflect an after-the-fact determination of the actual activity of each employee. Budget estimates (i.e., estimates determined before the services are performed) do not qualify as support for charges to awards.
- Each report must account for the total activity for which employees are compensated and which is required in fulfillment of their obligations to the organization.
- The reports must be signed by the individual employee, or by a responsible supervisory official having first hand knowledge of the activities performed by the employee, that the distribution of activity represents a reasonable estimate of the actual work performed by the employee during the periods covered by the reports.
- The reports must be prepared at least monthly and must coincide with one or more pay periods.
- Charges for the salaries and wages of nonprofessional employees, in addition to the supporting
documentation described in subparagraphs (1) and (2), must also be supported by records
indicating the total number of hours worked each day maintained in conformance with Department of
Labor regulations implementing the Fair Labor Standards Act (FLSA) (29 CFR Part 516). For this
purpose, the term "nonprofessional employee" shall have the same meaning as "nonexempt employee,"
- Salaries and wages of employees used in meeting cost sharing or matching requirements on awards must be supported in the same manner as salaries and wages claimed for reimbursement from awarding agencies.