SU is responsible for ensuring that sponsor funds provided by the University to other organizations via subrecipient agreements are spent in accordance with applicable laws and federal regulations.

If a sub-recipient relationship exists, SU is responsible for ensuring adherence with requirements of appropriate standards for good business practices, including internal controls in accordance with OMB Circular A-133 “Audits of States, Local Governments, and Non-Profit Organizations.”

SU achieves these assurances through periodic sub-recipient monitoring (on-site visits and the completion of a Management Compliance Questionaire).

Purpose:

The purpose of these procedures is to provide guidance to University staff in monitoring sub-recipients to ensure their compliance with federal laws and regulations.

Definitions:

Recipient or “prime” recipient- is a non-federal entity that receives an award directly from a federal agency to carry out a federal program.

Pass through entity-term for a non -federal entity (SU, state, other) that obtains a federal award and “passes it through” to a sub-recipient.

Sub-recipient-an entity that is responsible for a discreet and substantive portion of a project awarded to a prime recipient or another subrecipient to carry out or administer a program with the responsibility for programmatic decision-making.

Vendor-a dealer, distributor, merchant or other seller providing goods or services that is required for the conduct of a federal program. These goods or services may be for an organization’s own use or for the use of beneficiaries of the federal program.

To be a subrecipient an entity must have the following characteristics:

Meets the objectives of the program through performance measures.
Makes programmatic decisions.
Uses program funds provided to carry out a program of the sub-recipient as opposed to providing goods or services for program of the agency.
Is responsible for helping the agency meet the requirements of its prime award.
Has responsibility for adherence to applicable federal compliance requirements.

To be a vendor an entity must have the following characteristics:

Provides goods and services as part of their normal business operations.
Operates in a competitive environment.
Is not subject to the applicable federal program requirements.

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Sub-recipient Monitoring Requirements and Procedures:

A. University Research Services:

Reviews applications and proposals to ensure sub-recipients are appropriate for the project
Verifies and obtains certifications that sub-recipient has not been suspended, debarred or otherwise deemed ineligible to participate in federal assistance programs.
Acquires and reviews the most recent A133 or audited financial statement prior to the agreement.
Negotiates subrecipient agreement terms and conditions.
Provides assurance to sponsor that each sub-recipient complies with the federal requirements.
Ensures that the sub-recipient agreement identifies the federal program along with CFDA (Catalog of Federal Domestic Assistance) program number, and that the University (or its auditor) has access to the sub-recipient’s grant records.
Provides principal investigator with a copy of the University’s sub-recipient monitoring policy.
Determines and coordinates site visits, when necessary. The site visit might include a review for compliance with financial and program records required by OMB Circular A-110 or could solely be an observance of daily operations.
Obtains certification (for first fiscal year end after agreement has been ratified) of completed audit reports and/or single audit reports (OMB Circular A-133) for sub-recipients expanding $300,000 prior to Jan 1, 2004 and $500,00 or more thereafter in federal awards during the fiscal year.
Evaluates audit findings for completeness and for compliance with applicable laws and regulations, issues appropriate management directions to the sub-recipient, and determines whether a plan of corrective action has been prepared and implemented. If necessary, conducts a review and assessment of documentation (e.g., payroll registers, time and effort reports, fringe benefit and indirect cost rate charged) during the award period and/or post-award closeout.
Reviews and approves invoices received from the sub-recipient, to ensure costs are allocable, allowable and reasonable (e.g. circulars A-21 for educational institutions and A-122 for most other nonprofits).
Questions costs which differ materially from the approved budget, or which appear unusual or unallowable. Further, invoices shall not be approved for payment until a satisfactory explanation is received or an appropriate audit of unresolved issues can be performed.

B. The principal investigator (or his/her designee):

Oversees the satisfactory performance of the agreement to ensure that goals are achieved. This includes but is not limited to periodic reviews of progress reports and reviewing results delivered against statement of work in subagreement.

Monitors the technical and programmatic activities of the sub-recipient as necessary to ensure that the federal funds are used for authorized purposes.

Also reviews and approves invoices received from the sub-recipient, to ensure costs are allocable, allowable and reasonable (e.g. circulars A-21 for educational institutions and A-122 for most other nonprofits).

Should question costs which differ materially from the approved budget, or which appear unusual or unallowable. Further, invoices should not be approved for payment until a satisfactory explanation is received or an appropriate audit of unresolved issues can be performed.

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