1. Section 68 – What are your Sub- Recipients up to? (Sub-Recipient Monitoring – State Perspective) Wednesday, May 23, 2012 1:30-2:45 Cindy Jarvis, Assistant to the Director WVU Office of Sponsored Programs (OSP) and Jaime Bunner, Assistant Director WVU Cost Accounting

2. Is this a subcontractor or a vendor? The terms subcontractor and subrecipient mean the same in the WVU system and will both be used during this presentation. This determination needs to be made at the proposal stage as it can impact the facilities and administration rates (F&A) portion of the budget. Determines who is eligible to receive what financial assistance. OSP consults the Excluded Parties list before entering into a subrecipient relationship.

3. Criteria for Determining a Subcontractor: Has its performance measured against whether the objectives of the federal program are met. Has responsibility for programmatic decision making. Has responsibility for adherence to applicable federal program compliance responsibilities. Use the federal funds to carry out a program of the organization as compared to providing goods or services.

4. Criteria for Determining a Vendor : Anyone who provides goods and services within normal business operations; Anyone who provides similar goods and services to many different purchasers; Anyone who operates in a competitive market; Anyone who provides goods and services that are ancillary to the operation of the federal program; Anyone who is not subject to certain compliance requirements of the federal program (human subjects, animal welfare); Must work with WVU Procurement to issue a service agreement.

5. YESNO VENDOR Does the organization operate in a competitive environment? Does the organization provide goods and services within normal business operations to different purchasers? Does the organization provide goods or services that are ancillary to the operation of the program? Are services being performed routine services that could be performed for the general public or general research/scientific community rather than unique to the project? Is the contribution made to the project one of services performed rather than independent research? Is the organization free from programmatic compliance requirements? SUBRECIPIENT Is the organization using funds to carry out a program of the organization rather than providing goods and services to WVURC’s program? Is the organization free to decide how to carry out the activities of the program? Is work being performed unique to the project and designed specifically to enhance the scientific research goals and outcomes of the program? Does organization have distinct deliverables to deliver to the research goals of the project? Will organization contribute deliverables with little direct supervision from WVU’s PI? Is there an identified investigator at the organization? Does the organization have publishing rights and responsibilities? Will the organization have rights to resulting patentable or copyrightable technology? Does the organization make measurable, significant, scientific contributions to the final report or product? Is the organization required to adhere to applicable program compliance requirements? WEST VIRGINIA UNIVERSITY RESEARCH CORPORATION CHECKLIST FOR DETERMINATION OF VENDOR/SUBRECIPIENT NAME OF ORGANIZATION: SPONSORING AGENCY: CONTRACT/GRANT: RELATIONSHIP DETERMINED: [ ] VENDOR[ ] SUBRECIPIENT

6. OSP Subcontract Initiation Process: If subrecipient is named in the proposal and subsequent award, then OSP will need the following in order to establish a subcontract: Statement of work specific to subcontractor’s activities: 1.Statement of work should give enough detail that it would hold up in court if there is any question as to what is expected. 2. If possible tie deliverables in statement of work to payments. Line item budget 1.Line items in accordance with budget lines approved in the proposal. 2.Include proper fringes and F&A. Specify deliverables

7. Agency Specific Terms and Conditions OSP will then issue a subcontract flowing down all agency required terms and conditions – CFDA number, award name and number, if the award is R&D, the name of the Federal Agency, ARRA requirements, etc. Subcontractor is required to agree to all applicable terms and conditions of the prime award.

8. Institution Specific Terms One article will indicate to whom invoices are to be sent. Typically this is the Principal Investigator (PI). If this is not the PI, it must be someone with direct knowledge of the subcontractor’s effort. Insurance requirements are identified. Liability language is an absolute requirement.

9. OSP Processes Negotiations of all terms and conditions are conducted by OSP. Any requested changes to the Statement of Work are forwarded to the PI for their approval. Once subrecipient returns signed subcontract, OSP will enter requisition into MAP* and forward electronically to designated approver within the PI’s department/college. Designated approver and PI (or other departmental contact if requested) will receive hard copy for their records. *MAP – Mountaineer Administrative Processes – WVU financial system

10. WVU Internal Processes After OSP issues requisition, departmental/college approver forwards requisition to Procurement and a purchase order (PO) is issued. Procurement sends executed purchase order/change order to subrecipient for their records. Subrecipient should include PO number on all invoices. WVU department/college business officer uses PO to pay invoices once approved by PI. PI should review each invoice to ensure that charges match deliverables.

11. WVU Processes continued If the subrecipient is not named but a contractual line is included in the proposal, the principal investigator will need to work with Procurement on a Request for Proposals (RFP) which will seek a bid or get a sole source justification approved. Once a subcontractor is identified then the process will continue as outlined above.

12. WVU Policy and Guidelines A copy of the WVU OSP subcontracting guidelines can be found on the OSP web page at: http://osp.research.wvu.edu/subcont racts http://osp.research.wvu.edu/subcont racts This includes our Subrecipient Monitoring Policy: http://osp.research.wvu.edu/r/downl oad/22728 http://osp.research.wvu.edu/r/downl oad/22728

13. OMB Circular A-133 A Pass Through entity is required to: –Monitor the activities of subrecipients as necessary to ensure that Federal awards are used for authorized purposes in compliance with laws, regulations, and the provisions of contracts or grant agreements and that performance goals are achieved.

14. New Subcontractors New subcontractors asked to fill out a Subcontractor Questionnaire Subcontractor Questionnaire asks for A-133 audit results If A-133 isn’t applicable, subcontractor required to answer questions about compliance issues Level of risk determined by answers

15. PI/Departmental Responsibilities Responsible for monitoring periodic progress reports and invoices from the subcontractors for compliance with the terms of the contract. Invoices should be checked to ensure that they are indicative of progress (i.e. amount of money spent is reflective of the work completed). Noncompliance with technical reporting requirements or dissatisfaction with level of subcontractor progress should be reported immediately to the Office of Sponsored Programs.

16. Subrecipient Monitoring Responsibilities of Financial Services Issues subrecipient monitoring letters of inquiry every year Different letter formats for not-for-profit subrecipients versus for-profit subrecipients Not-for-profit subrecipients asked for A-133 audit status For-profit subrecipients asked for copies of Financial Statements or other audited reports

17. Four classes of Subrecipients Not-for-profits with Federal expenditures greater than $500,000 Not-for-profits with Federal expenditures less than $500,000 Non US-based entities For-profit entities

18. Not-for profits Greater than $500,000 Well defined in Circular A-133 Review of the entity’s A-133 audit –Options – Web, Report, confirmation –Look for items that affect subrecipients –Significant items not directly affecting subrecipients should be investigated –When identified, issues should be resolved in a timely manner

19. Not-for-profits Less than $500,000 Entities expending less than $500,000 in total Federal monies are not required to receive an A- 133 audit Pass through entity should require the subrecipient to confirm in writing that they did not receive over $500,000 Devise other mechanism to be assured of federal compliance – for example: questionnaire

20. Non-US based & For-Profits Review any other financial reports provided. Assess risk level – based on: –Size of subcontract –Percentage of award passed to subrecipient –Complexity of award & sensitivity of work –Prior experience with the subrecipient

21. For Selected High-Risk Subrecipients Request documentation of internal controls Request documentation of grants management procedures Ask questions related to allowable costs, accounting practices, financial records, etc.

22. Subrecipients Who Don’t Respond Subject to withholding of future payments Possible termination of subcontract agreement No new subcontracts issued

23. Subcontract Closeout Final invoice submitted Required cost-share has been met and reported Patents and/or inventions are properly reported Technical report(s) completed and mailed to WVU PI All property reports have been completed

24. Questions?Questions?