Office of
Sponsored Programs

Postaward Guidelines

Process for Subrecipient Issuance & Monitoring

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Purpose

OMB Circular A-110 requires institutions to have, . . . provisions to define a sound and complete [subrecipient] agreement (A-110, Subpart C, __.48), and; . . . a system for contract administration…to ensure contractor conformance with terms, conditions and specifications of the contract, and to ensure adequate and timely follow-up of all purchases. Recipients shall evaluate contractor performance and document, as appropriate, whether contractors have met the terms, conditions and specifications of the contract. [A-110, Subpart C, __.47 and __.51(a)].   This dictates that institutions develop a system for issuing contracts and for monitoring costs and performance associated with subrecipient agreements.  The following guidelines and procedures ensure that these requirements are met.

To assist in determining whether a particular relationship will be defined by a vendor contract or a subrecipient agreement, the Office of Sponsored Research (OSR) relies on the document entitled “Procurement of Services”.  This distinguishes between a subcontractor that provides goods and services and a subrecipient who actually carries out a portion of the research program.
These guidelines provide procedures to OSR when it is determined that the collaborative relationship is that of a grantor (SIT) to a subrecipient partner (grantee). 

Subrecipient agreements observe and comply with the requirements in OMB Circular A-110 and A-133 and use as a model subcontracts developed and approved by the Federal Demonstration Partnership. 

Procedures

Pre-award Activities –Subrecipient Agreement Issuance and Maintenance

At the time an award notification is received from the sponsor for the first year’s funding, the pre-award specialist will proceed through all items shown in Sections A and B on the “Subrecipient Agreement Activity Checklist” (Attachment B).  This information is needed so the specialist can appropriately prepare the subrecipient agreement and decide the level of monitoring required for the contract.

As audit reports or website verifications are received, each is reviewed as to who performed the audit, the findings, compliance issues, and whether or not these were weaknesses only, deficiencies, or actual disallowances.  The subrecipient’s response and corrective action taken are considered when determining:

  • Whether or not the action is sufficient
  • Does the finding itself warrant further investigation by SIT
  • Do the audit result warrant an adjustment to SIT’s financial records

If a subrecipient shows a material finding, the specialist will counsel with the Executive Director to determine appropriate monitoring needs.  Further, if that material finding involves SIT’s agreement to the sub and that cost was disallowed, SIT will request reimbursement of those disallowed costs.  This will be tracked for follow-up until resolution is achieved.  Once reimbursement is received, those funds are deposited to the affected SIT award and are thus reflected in our Annual Financial Statements.  The specialist should contact the subrecipient’s business or invoicing office if there are any problems.

If the SIT Principal Investigator (PI) determines during the life of the agreement that additional effort by the subrecipient is needed, i.e., effort in addition to that described and agreed upon in the original proposal and subrecipient agreement, he/she should submit a description of the additional effort and OSR will work with the subrecipient’s business office to negotiate a revised budget and the contract specialist will modify the agreement as needed.

Contract Activities – Done at the Time of Subrecipient Agreement Issuance

The formal subcontract / subrecipient agreement is written by the OSR specialist in concert with the PI.  A critical piece of documentation needed by the contract specialist in order to start this process is information provided by the PI as a result of the initial e-mail sent by pre-award at the time the award notice is received from the sponsor. This information is needed in order to adequately address the PI’s requirements for successful contract execution. 

Each agreement is unique and tailored to the individual circumstances of the project and award terms and conditions; however, SIT uses as ‘boilerplates,’ the FDP documents entitled “FDP Subaward Agreement” and “Subaward Agreement” when the original source of funds for the award is from the federal government. 

Postaward Activities – Subrecipient Agreement Monitoring and Close-Out

Although the form entitled “Subrecipient Agreement Activity Checklist” describes the level of and tasks involved in subrecipient monitoring; it’s recognized that additional monitoring needs might become apparent as a result of working through and reviewing items from a variety of sources.  To that end this document, and all referenced attachments, provide a framework for the preaward specialists to determine those additional needs.  If it is determined the subrecipient poses a MEDIUM or HIGH risk the preaward specialist will also utilize “Research Services - Subrecipient Monitoring Questionnaire” (Attachment C) as an additional monitoring tool.

IMPORTANT NOTE:   As the prime award recipient, SIT assumes ultimate responsibility for the conduct and completion of the project.  It is the responsibility of SIT’s PI to review and monitor the subrecipient’s technical progress.  Therefore, when the PI receives a subrecipient invoice, he/she should review it to determine that the amount being requested for payment is consistent with the amount of effort performed during the billing period and with technical progress on the project.  Both OSR and the PI should remain vigilant to these facts when reviewing subrecipient expenditure documents, reports, and other requests for information.

Approximately 120 days, and again at 60 days, before final expiration of the subrecipient award, COEUS will generate notification letters that will be sent to the subrecipients.  The letter will remind them of the impending expiration and the closing documents that may be due.  Normally, a subrecipient is required to submit the following documents upon termination of the agreement:

  • Final technical report
  • Final property/inventory report
  • Final patent disclosure statement
  • Final invoice 

IMPORTANT NOTE:  Final payment will not be approved until all required reports have been received; however, the same caution advised previously in the event of late payments should be exercised if the specialist anticipates a delay in receiving all required documentation.

Documentation of all correspondence, invoices, back-up detail, and any other notes should always be maintained in the account file.