If a contractor works for a nonprofit agency and their salary is being paid from grant money that is NOT being received by the nonprofit agency, should her pay be recorded in the nonprofit's financial records?

Well if anyone would ask in future, I would have a financial report that simply states:
Contract work (description) project completed by (name of contractor) and contractors salary paid for by funds remitted through their employer (list agency). This would be a *Note: to the cost of the project to you as a non profit.