Labor Verification Reports

The Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (12/13) defines what costs are allowable and allocable to federal grants and other "assistance" agreements. The "Uniform Guide" includes requirements for Compensation for Services as described in section §200.430 Compensation—personal services.

General Principles

(a) General. Compensation for personal services includes all remuneration, paid currently or accrued, for services of employees rendered during the period of performance under the Federal award, including but not necessarily limited to wages and salaries. Compensation for personal services may also include fringe benefits which are addressed in §200.431 Compensation—fringe benefits. Costs of compensation are allowable to the extent that they satisfy the specific requirements of this part, and that the total compensation for individual employees:

(1) Is reasonable for the services rendered and conforms to the established written policy of the non-Federal entity consistently applied to both Federal and non-Federal activities;

(2) Follows an appointment made in accordance with a non-Federal entity's laws and/or rules or written policies and meets the requirements of Federal statute, where applicable; and

(3) Is determined and supported as provided in paragraph (i) of this section, Standards for Documentation of Personnel Expenses, when applicable.

(b) Reasonableness. Compensation for employees engaged in work on Federal awards will be considered reasonable to the extent that it is consistent with that paid for similar work in other activities of the non-Federal entity. In cases where the kinds of employees required for Federal awards are not found in the other activities of the non-Federal entity, compensation will be considered reasonable to the extent that it is comparable to that paid for similar work in the labor market in which the non-Federal entity competes for the kind of employees involved.

Salary Basis

The Uniform Guidance includes standards for the institutional salary base used to calculate compensation charged to grants.  Below are a few excerpts from the Uniform Guidance.  

  • Charges for work performed on Federal awards by faculty members during the academic year are allowable at the IBS rate. 
  • Periods outside the academic year. (i) Except as specified for teaching activity in paragraph (h)(5)(ii) of this section, charges for work performed by faculty members on Federal awards during periods not included in the base salary period will be at a rate not in excess of the IBS.

Labor Verification Reports

  • To comply with these requirements the Office of Sponsored Projects established two reports which are titled "Labor Verification Reports by Employees" and "Labor Verification Reports by Project."
  • On an annual basis, usually within several months after the fiscal year ends, the Office of Sponsored Projects generates both reports for all Dartmouth College Employees who were paid on a sponsored project (federal and non-federally funded) award during the previous fiscal year.
  • Each employee report shows 100% of the employee's salary allocation during the previous fiscal year.
  • Both reports are submitted electronically using OnBase.
  • The Labor Verification Report by Project is a view only report that allows the PI to see all of the Dartmouth Employees who worked on their sponsored project awards during the last fiscal year.
  • The Labor Verification Report by Employee is the report that is certified.

Who Approves

  • PI's approve their own reports.
  • PI's approve all non-faculty employee reports in which that employee had all or a portion of their wages charged to one of the PI's sponsored project accounts during the previous fiscal year.
  • If an employee was paid on multiple sponsored project accounts that involved multiple PI's, each PI would approve their portion of that employee's report.
  • Faculty approve their own reports.
  • If the PI or Faculty are no longer here or are unavailable to approve, department chairs and department administrators can approve these reports.
  • The Labor Verification Reports by Employee need to be approved within 30 calendar days of receiving them.
  • All approvals are done electronically using OnBase.

Correcting Labor Verification Reports by Employee

  • If the PI or Faculty determine that the salary allocation on one of their reports or an employee report is not correct, a correcting wage transfer needs to be completed.
  • Once the correcting wage transfer has been processed, a revised Labor Verification Report for that employee is run which reflects the corrected salary allocation.
  • PI and their department are notified once the revised Labor Verification Report is ready to be approved.

A reminder that when reviewing salary allocations, time spent preparing a proposal or a bid is not normally directly chargeable to a sponsored project.