Subrecipient Monitoring

Policy Summary

The university is responsible for monitoring the programmatic and financial activities of its subrecipients to properly manage a Subaward. This policy applies to Subawards issued under all sponsored projects awarded to the university, regardless of the primary source of funding. This policy does not apply to consultant agreements or the procurement of goods or services from Contractors.

When the university enters into a Subaward and assigns responsibility for conducting a portion of its sponsored project work to a Subrecipient, the university remains responsible to the sponsor for management of funds and for meeting performance goals.  The university evaluates and monitors the financial and programmatic performance of Subrecipients, and assesses their capacity to properly manage a Subaward.  The university’s objective is to monitor that sponsor funds are properly spent, that performance goals are met, and that Subrecipients comply with all applicable laws, regulations, and prime award terms and conditions. The university may impose specific controls, as needed, for certain Subrecipients based on relevant risk factors. 

Related Regulations

OMB Uniform Guidance 2 CFR §200

• §200.331 – Subrecipient and contractor determinations
• §200.332 – Requirements for pass-through entities.  Requires pass-through entities to evaluate each subrecipient’s risk of noncompliance in order to determine the appropriate monitoring level, monitor the activities of subrecipient organizations to ensure that the Subaward is in compliance with applicable Federal statutes and regulations and terms of the Subaward, and verify that subrecipients are audited as required by Subpart F of the Uniform Guidance.

Who is Governed by this Policy 

• Staff
• Faculty

Policy

This policy includes the following elements: 

1. Determining Subrecipient versus Contractor 

The university must make a case-by-case determination whether each agreement it makes for the disbursement of federal or non-federal program funds casts the party receiving the funds in the role of a Subrecipient or a Contractor.

2. Pre-Qualification of Subrecipients 

The university assesses, among other factors, the Subrecipient organization’s financial status and internal controls based on documentation from the Subrecipient and other independent sources, in order to determine whether to proceed with the Subrecipient. Based on that assessment, terms and conditions are established in the Subaward agreement to be consistent with the level of perceived risk and then the university will identify specific monitoring activities.

3. Subrecipient Monitoring 

During the period of the Subaward, the university performs the following activities with regard to Subrecipients: 

1. Advises Subrecipients of federal, state or local requirements, terms and conditions of the prime award, and university requirements that apply to the Subaward. 
2. Monitors costs and activities of Subrecipients to confirm that expenditures charged to the awards are consistent with the budget, scope of work and allowable per terms and conditions of the Subawards agreement. 
3. Verifies that the performance goals set forth in the Subaward scope of work are being met in a timely manner. 
4. Considers imposing specific Subaward conditions upon a subrecipient if appropriate.
5. Verifies that Subrecipients are audited as required by Federal Guidance. 
6. Considers whether the results of the Subrecipient's audits, on-site reviews, or other monitoring activities necessitate adjustment of the university’s records, such as budget modifications or reallocation of resources, repayment from the Subrecipient, or other measures. Considers taking enforcement action against noncompliant Subrecipients.
7. Provides subrecipients with training and technical assistance on program-related matters if applicable.

Definitions

Subaward: A Subaward (also referred to as a subgrant if the prime award is a grant or subcontract if the prime award is a contract) is an instrument through which financial or other support is awarded to an eligible and qualified organization for the performance of a substantive portion of the program or project funded under the prime award. The term also includes awards made by a Subrecipient to a lower-tier Subrecipient. The term does not include procurement of goods and services (i.e., a Contractor agreement is not a Subaward).

Subrecipient: A Subrecipient (also referred to as a Subawardee, or subgrantee if the prime award is a grant, or a subcontractor if the prime award is a contract, fixed amount awards or cooperative agreements) is the legal entity that receives a Subaward and that is accountable to the university for the use of sponsor funds provided to the entity to carry out a portion of the university’s programmatic activity under the prime award. The term may include but is not limited to institutions of higher education, for-profit corporations, not-for-profit organizations, and foreign or international organizations at the discretion of the funding sponsor.

Contractor: A Contractor is an entity from whom the university purchases property or services needed to carry out the project or program. An entity could be both a Contractor and Subrecipient (if it meets the definition of a Subrecipient). In such cases, the entity is subject to Subrecipient monitoring with respect to its Subrecipient activity. 

Forms

• Subrecipient vs. Contractor Determination Checklist
• Subrecipient Commitment Form
• Financial Status Questionnaire

Related Information

• Federal Audit Clearinghouse (FAC) 
• Procurement Policy 
• Sponsored Projects Handbook 
• System for Award Management (SAM)

Contacts