3.9 Allowable Costs
Compensation for Personal Services
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Limit on Use of Award Funds for Employee Compensation
Support of Salaries, Wages, and Fringe Benefits
Overtime Compensation
Limit on Use of Award Funds for Employee Compensation
You may not use Federal grant funds to pay cash compensation (salary plus bonuses) to any employee at a rate that exceeds 110 percent of the annual maximum salary payable to a member of the Federal Government???s Senior Executive Service (SES) at an agency with a Certified SES Performance Appraisal System for that year.
OJP Specific Tip
With respect to the limitation, compensation for salary plus bonuses are applicable to any award of more than $250,000.
The 2015 salary table for SES employees is available on the U.S. Office of Personnel Management???s 2015 Executive and Senior Level Employee Pay Tables web page.
A recipient may compensate an employee at a higher rate, provided the amount in excess of the limitation is paid with non-Federal funds. For employees who charge only a portion of their time to an award, the allowable amount to be charged to that award is equal to the percentage of time worked on the grant times the maximum salary limit (110% of SES salary).
OJP Specific Tip
The Assistant Attorney General for OJP (or, for certain awards, the official listed in the applicable program solicitation) may exercise discretion to waive, on an individual basis, the limitation on compensation rates allowable under an award. An applicant requesting a waiver should include a detailed justification in the budget narrative of the application. Unless the applicant submits a waiver request and justification with the application, the applicant should anticipate that OJP will request the applicant to adjust and resubmit the budget. The justification should include the particular qualifications and expertise of the individual, the uniqueness of the service the individual will provide, the individual???s specific knowledge of the program or project being undertaken with award funds, and a statement explaining that the individual???s salary is commensurate with the regular and customary rate for an individual with his/her qualifications and expertise, and for the work to be done.
Financial Management Tip
Any additional compensation beyond 110 percent of the U.S. Government SES level will not be considered matching funds where matching requirements apply.
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Support of Salaries, Wages, and Fringe Benefits
Charges made to Federal awards for salaries, wages, and fringe benefits must be based on records that accurately reflect the work performed and comply with the established policies and practices of the organization. See 2 C.F.R. ?? 200.430.??
- Charges must be supported by a system of internal controls which provides reasonable assurance that the charges are accurate, allowable and properly allocated.
- Documentation for charges must be incorporated into the official records of the organization.
- Support must reasonably reflect the total activity for which the employee is compensated by the organization and cover both federally funded and all other activities. The records may include the use of subsidiary records as defined in the organization???s written policies.
- Where grant recipients work on multiple grant programs or cost activities, documentation must support a reasonable allocation or distribution of costs among specific activities or cost objectives.
- In cases where two or more grants constitute one identified activity or program, salary charges to one grant may be allowable after written permission is obtained from the awarding agency.
Financial Management Tip
Examples of items that may support salaries and wages can include timesheets, time and effort reports, or activity reports that have been certified by the employee and approved by a supervisor with firsthand knowledge of the work performed. Payroll records should also reflect either after the fact distribution of actual activities or certifications of employee???s actual work performed.
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OJP Specific Tip
Added Work
As a recipient or subrecipient, you may employ a State or local government worker to complete tasks in addition to his or her full-time job, provided the work is performed on the employee???s own time and:
- You pay him or her compensation that is reasonable and consistent with that paid for similar work in other activities of State or local government;
- The employment arrangement is approved and proper under State or local regulations (e.g., no conflict of interest); and
- The time and/or services provided are supported by adequate documentation.
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Overtime Compensation
Recipient and subrecipient employees should be compensated with overtime payments for work performed in excess of the established work week (usually 40 hours).
- Payment of more than occasional overtime is subject to periodic review by the awarding agency.
- In addition, overtime compensation is typically reviewed during site visits and audits.
Executives, such as the president or executive director of an organization, may not be reimbursed for overtime or compensatory time under grants and cooperative agreements.
Overtime payments are allowable, unless otherwise restricted (i.e. by your federal award or program guidance) only to the extent that payment for such services is in accordance with the policies of the organization. The overtime premiums should be prorated among all jobs or activities and not be charged exclusively to the Federal award unless permitted by the specific program.
Financial Management Tip
In no case is dual compensation allowable. That is, an employee may not receive compensation from his/her organization AND from an award for a single period of time (e.g., 1 to 5 p.m.), even though such work may benefit both activities.
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