Subrecipient Monitoring Policy

Background

OMB Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (2 CFR §200) ("Uniform Guidance"), specifically sections §200.330 and §200.331, requires prime recipients of federal funds to monitor subawards and to ensure subrecipients meet the audit requirements in Subpart F and use funds in accordance with applicable laws, regulations and terms of the award.

Definitions

Pass-through entity (Uniform Guidance §200.74) - Pass-through entity means a non-Federal entity that provides a subaward to a subrecipient to carry out part of a Federal program.

Subaward (Uniform Guidance §200.92) - Subaward means an award provided by a pass-through entity 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 or payments to an individual that is a beneficiary of a Federal program.  A subaward may be provided through any form of legal agreement, including an agreement that the pass-through entity considers a contract. 

Subrecipient (Uniform Guidance §200.93) - Subrecipient means a non-Federal entity that receives a subaward from a pass-through entity to carry out part of a Federal program; but does not include an individual that is a beneficiary of such program.  A subrecipient may also be a recipient of other Federal awards directly from a Federal awarding agency.

Distinction between a Subrecipient and a Contractor

A non-Federal entity may concurrently receive Federal awards as a recipient, a subrecipient, and a contractor, depending on the substance of its agreements with Federal awarding agencies and pass-through entities.  Therefore a pass-through entity must make a case by case determination whether an entity is a subrecipient or a contractor.  Documentation on the decision should be kept in the file.

Subrecipients - A subaward is for the purpose of carrying out a portion of a Federal award and creates a Federal assistance relationship with the subrecipient.  Performance should be measured in relation to whether objectives of a Federal program were met.  The subrecipient should have responsibility for programmatic decision making and adherence to applicable Federal program requirements specified in the Federal award.  In summary, the subrecipient is using Federal funds to carry out a program for a public purpose as opposed to providing goods or services for the benefit of the pass-through entity.

Contractors - A contract is for the purpose of obtaining goods and services for the non-Federal entity's own use and creates a procurement relationship with the contractor.  The contractor is providing goods and services within normal business operations and provides similar goods and services to many different purchasers.  Contractors normally operate in a competitive environment and are not subject to compliance requirements of the Federal program as a result of the agreement. 

Subrecipient Monitoring Responsibilities - PreAward

During the proposal stage, a Principal Investigator should:

  • Obtain evidence from the subrecipient to participate in the project and abide by all associated terms and conditions
  • Obtain a statement of work
  • Obtain a detailed budget and budget justification

The Grants Accounting office is responsible for assessing risk and should:

  • Check to make sure the subrecipient is not suspended or debarred
  • Request the subrecipient's most recent A-133 audit.  If findings were noted, Grants Accounting should assess whether or not these findings make the subrecipient a high-risk subaward
  • Check to see if this subrecipient has had a subaward in the past with Wesleyan
  • Ask the subrecipient for a copy of their federally negotiated indirect cost rate.  This rate must be used on any subawards.  If no rate exists, you must use a 10% de minimis rate.

Subrecipient Monitoring Responsibilities - PostAward

Before a subaward agreement is drafted, the PI should fill out the Sole Source Justification Form. 

All pass-through entities must ensure that every subaward is clearly identified to the subrecipient as a subaward and include a list of required information (see §200.331 for a list of items required in the subaward agreement).  Wesleyan University uses the Federal Demonstration Partnership (FDP) Template for all Federal subawards which includes sections for all required information. 

During the subaward period, Principal Investigators should:

  • Review technical performance reports or any other specified deliverables on a timely basis.  Any issues should be documented, investigated and resolved.
  • Review invoices for budget to actual comparisons.  Any questionable items should be resolved before the invoice is submitted for payment.
  • Not process the FINAL invoice for payment until the PI is satisfied with the work and has received all final technical reports.

PI workflow approval on subrecipient invoice vouchers in WFS is considered to be PI approval of subrecipient's performance and work.

During the subaward period, the Grants Accounting office will:

  • Request audit certification letters and copies of A-133 reports from all subrecipients.
  • Verify that no audit findings are related to the subaward.
  • If audit findings are noted related to Wesleyan's subaward, ensure that action is taken and issue a management decision.  The management decision must clearly state whether or not the audit finding is sustained, the reasons for the decision, and the expected auditee action to repay disallowed costs, make financial adjustments, or take other action.  If the auditee has not completed corrective action, a timetable for follow-up should be given.  (Uniform Guidance §200.521)