0. Subawards and Subrecipient monitoring

1. Subaward - 2 CFR
A formal legal agreement between your institution and another legal entity
An award provided by a pass-through entity (PTE) to a subrecipient for the subrecipient to carry out part of a Federal award received by the pass-through entity.
It does not include payments to a contractor
It does not include payments to an individual
Typically subrecipient will be utilizing their own personnel, space and materials to complete the scope of work for the subaward
To be a proper steward of Federal funds, to exercise our responsibility as a PTE we have to do what the Feds are doing to us
First – assessing
Second – monitoring subaward as you go along

2. Risk as a Pass Through Entity
Prime recipient responsible for actions of subrecipient
Adhering to federal regulations
Appropriate systems/controls in place
Work accomplished
Monitoring plan sufficient to mitigate potential risks of non-compliance by subrecipient

3. Subaward Set Up/Management
Subaward Document –
Subrecipient Information
Name, contact information, DUNS, EIN, IDC rate
Award Information
Name of Federal awarding agency, Federal award date, FAIN, amount of obligated federal funds in this action, total amount of obligated funds, total amount of award to PTE, CDFA number and name, R&D
Terms/Conditions of Award
FFATA (if applicable), flow down from Federal award
Specific Terms/Conditions
Management decision from RAQ
Reporting Requirements
Audit Requirements
Name on subrecipient agreement must match name on the unique identifier (DUNS or EIN)
FFATA – federal award project description as required for FFATA reporting
In subaward doc – also include SOW, Budget (payment schedule if fixed price) and Justification as well as prime agreement (for flow down T/C)
Audit Requirements – must comply with annual audit requirements per UG, and also allow PTE and representatives of the Prime Sponsor access to audit their records

4. Risk Assessment – 200.331 Conduct risk assessment
PTE prior experience with subrecipient
Results of previous Federal single audits
If not subject to single audit, review alternative financial information
Subrecipient has new personnel/systems
Results of prior direct federal funding if applicable
Type of work being conducted
Animals/human subjects
Export controls
Where is work being conducted
Domestic or foreign organization
Amount of subaward in relation to prime award
Conflict of Interest Policy
If not subject to single audit, review alternative financial information  Mini Audit from PTE
Does subrecipient have compliant policy or will subrecipient adhere to pass through entity (PTE) COI policy

5. Risk Assessment –
PTE should use Federal single audit results to evaluate subrecipient risk by accessing it on the Fed Audit Clearinghouse (FAC)
, if risk assessment findings are non compliant, PTE should make management decision noting:
Reason for decision
Expected action
Timetable for follow-up if needed
Six months to issue
Noncompliance Remedies
If not subject to single audit, review alternative financial information  Mini Audit from PTE

6. Noncompliance Remedies – 200.338
Temporarily withhold cash payments pending corrective actions
Disallow part or all of cost of activity
Wholly or partly suspend or terminate subaward
Initiate suspension or debarment as per 2 CFR part 180
Withhold further subawards to entity

7. Specific Conditions –
Additional potential terms and conditions to mitigate risk
Payments as reimbursement
Not allow automatic carryover
More detailed financial reports
Require subrecipient to obtain technical/management assistance
Additional prior approvals
Payments as reimbursement rather than advance payments
Not allow automatic carryover into future budget periods
More detailed financial reports – i.e., quarterly receipts as backup docs
Require subrecipient to obtain technical/management assistance
Additional prior approvals
Do not require terms/conditions if cannot monitor them appropriately

8. Fixed Amount Subawards – 200.332
Prior written approval from prime to provide fixed amount subaward
Up to Simplified Acquisition Threshold
$3,000 - $150,000
Required to meet standards in
MOST of the time we pay subs on a cost reimbursable basis, not fixed amount
Simplified acquisition threshold is 3k to 150k – so can go up to 150k
So weigh the risks of using fixed amount subaward
Provides specific level of support without regard to actual costs incurred
Reduces some of the administrative burden
Reduces record-keeping requirements
Accountability primarily based on performance and results
Award amount negotiated using cost principles
Project scope is specific
Adequate cost, historical or unit pricing is available – provide reasonable estimates of actual costs
Accountability is based on performance and results
Except in case of early termination no review of actual costs incurred
Several partial payments, amount agreed upon in advance & the milestone or event triggering payment agreed upon in advance.
Unit price basis for a defined unit or units, defined price or prices agreed to in advance
One payment at award completion

9. Risk Assessment Doc Does subrecipient have compliant policy
Subrecipient adhere to pass through entity (PTE) COI policy

11. Indirect Costs – ,
Obligated to pay subrecipient’s federally negotiated F&A rate
de minimus 10% MTDC
Obligated to pay subrecipient’s federally negotiated F&A rate at time contract is fully executed – for full duration of the award even if their negotiated rate changes (some exceptions: e.g., hospitals)
If no federally negotiated F&A rate, provide de minimus 10% MTDC

12. Subrecipient Monitoring
Invoice Review and approval by PI and Department Administrators
Payment –
Expected 30 calendar day payments (unless not compliant)
Financial & Progress Reports and deliverables – ,
Must specify required reports
Review of programmatic reports
Institutional officials should be alerted if there are problems with any of the above
Invoice Review – PI review – only one who can assess whether or not the invoice reflects the progress of the work being accomplished
Cost reimbursement –
Expected 30 calendar day payments
Non performance or non compliance
Financial & Progress Reports – ,
Must specify required reports
Review of programmatic reports
Institutional officials should be alerted if there are problems with any of the above – this is HOW we monitor subawards – deal with it sooner rather than later (don’t wait until closeout for a year 1 invoice)

13. Closeout –
Appropriate terms/conditions for closeout of subaward
Programmatic reports
Financial reports
Final invoice & closeout documentation
Other reports required by Prime award, as applicable