Personnel charges need evidence that connects the amounts charged with the work actually performed. Effort certification and payroll verification are two ways institutions organize that evidence. Their labels matter less than whether the complete process meets the applicable documentation and internal-control requirements.
An effort-certification process commonly asks knowledgeable people to review the distribution of institutional activity. A payroll-verification process starts with salary charges and checks whether they are supported by the work performed. Section 200.430 does not prescribe a system bearing either name.
The practical question is how your institution will maintain reliable supporting records, identify discrepancies, and correct charges.
What the Regulation Actually Says
2 CFR 200.430(g)(1) states:
"Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed."
Paragraph (g)(1)(i) also requires internal controls that provide reasonable assurance about accuracy, allowability, and allocation. The surrounding provisions address inclusion in official records, the employee’s total compensated activity, and distribution among the relevant activities and cost objectives.
The regulation does not mandate a universal quarterly certification form. Institutions have flexibility in system design, but that flexibility predates the 2024 revision and does not remove the substantive recordkeeping requirements. Sponsor terms and institutional procedures still need to be checked.
Effort Certification: How It Works
Traditional effort certification focuses on the proportion of time each person spends on each sponsored project.
Key features:
- Uses the institution’s documented review schedule; for example, twice a year or quarterly (four times a year)
- Assigns responsibility to designated central and departmental staff under institutional policy
- Uses payroll distributions as a starting point, then checks them against actual work, including relevant cost sharing and nonfederal activities
- Certified by PIs, faculty, or supervisors with direct knowledge of the work performed
- Documents that the level of effort charged to the award aligns with the work actually performed
Common audit concerns: Over- or under-statement of reported effort; late certifications; certifiers without direct knowledge signing off on others' effort.
Potential benefit: Reviewing the complete distribution of institutional activity can help people see how sponsored work fits alongside other responsibilities.
Design challenge: Explain the relationship between effort and salary charges, train reviewers, and provide a clear process for correcting discrepancies.
Payroll Verification: How It Works
Payroll verification starts with the salary amounts charged to awards and checks whether the records support the work performed. Matching two payroll reports is not enough: both could repeat the same incorrect allocation.
Key features:
- Uses a review frequency selected to support timely detection and correction of errors
- Defines central and departmental responsibilities in institutional procedures
- Verifies that salary distributions in the payroll system match actual work performed
- Confirmed by PIs, faculty, and supervisors — similar certifier pool to effort certification
Common audit concerns: Unsupported, erroneous, or misallocated payroll charges; lack of documentation linking payroll records to specific project activity.
Potential benefit: Beginning with the financial record can make the amounts requiring review easy to identify.
Design challenge: Preserve evidence of work performed across federal and nonfederal activities, address cost sharing, and make timely adjustments when the initial allocation is wrong. Payroll records alone do not establish compliance.
Comparison at a Glance
| Dimension | Effort Certification | Payroll Verification |
|---|---|---|
| Focus | % of time on each award | $ of salary per award |
| Frequency | Set by documented institutional procedures | Set to support timely review and correction |
| Process owner | Defined central and departmental responsibilities | Defined central and departmental responsibilities |
| Certifiers | PIs, faculty, supervisors | PIs, faculty, supervisors |
| Audit concern | Effort misstatement | Payroll misallocation |
| Compliance test | Complete records and effective controls under applicable requirements | The same records and controls requirements |
How to Choose: The Four Dimensions
Use four practical questions when evaluating a system change:
1. Compliance. What do the applicable regulation, sponsor terms, and institutional policies require? Can the proposed process show that charges reflect the work performed, including activity outside sponsored awards?
2. Finance. What are the change-management costs? A new approach may require new staff, new training, or new system configurations. Is there a budget for transition?
3. Operations. How many users will need to change their workflow? How well does your current process work, and what specific problems are you trying to solve?
4. Technology. Which approach does your ERP system support natively? Will you need a new system or significant customization? Are you planning a system implementation in the near future that could incorporate the new approach?
Before selecting a system, walk through a realistic case: a staff member’s initial payroll distribution no longer matches their actual work. Who detects the discrepancy, what supporting evidence do they use, who approves the correction, and how is it recorded? Test those steps instead of assuming that a particular system name guarantees compliance.
The Audit Risk That Never Goes Away
Whatever system you choose, the fundamental risk is the same: personnel charges that do not reflect actual work performed. A documented process needs to function in everyday use.
The key markers of a functioning system, under either approach:
- Certifications completed on time
- Certifiers have direct knowledge of the work performed
- Needed adjustments are made in a timely manner so final charges reflect actual work; changes to future allocations do not replace corrections to erroneous past charges
- The system is tested through internal audit or monitoring
Personnel documentation is a useful topic when studying research financial management. For your next session, practice identifying what evidence supports a charge and what should happen when the evidence does not match the payroll allocation. Try the free diagnostic to begin practicing with the product.