Departmental Research Administrators
Training Track
Subrecipient
Monitoring
Office of Sponsored Programs
Christina Stanger, CRA
stanger@umbc.edu, ext 5-4155
1
Course Overview
Module I: Intro, Definitions, & Workflow
 Module II: UMBC Policies &
Federal Compliance Issues
 Helpful Websites

2
Module I: Definitions
OMB A-110 (2 CFR Part 215) Definition:

Subaward means an award of financial assistance in the form of money, or
property in lieu of money, made under an award by a recipient to an eligible
subrecipient or by a subrecipient to a lower tier subrecipient. The term
includes financial assistance when provided by any legal agreement, even if
the agreement is called a contract, but does not include procurement of
goods and services nor does it include any form of assistance which is
excluded from the definition of "award" in paragraph (e)…(“e” is from A110’s definition of an award).

Subrecipient means the legal entity to which a subaward is made and which
is accountable to the recipient for the use of the funds provided. The term
may include foreign or international organizations (such as agencies of the
United Nations) at the discretion of the Federal awarding agency.
Module I: Definitions
UMBC Definition:
 A subaward issued by UMBC refers to an agreement between
UMBC and any other organization in which a Principal
Investigator (PI) at the other organization will assist UMBC in
accomplishing an externally-funded project by performing
substantive work on the project. Substantive work is effort in
which the collaborator engages directly in the performance of
the specific aims of the project. UMBC and the subrecipient
mutually agree on how the substantive work will be performed
and how it will be measured. The subaward will have a PI and
will generally have potentially patentable or copyrightable
technology and/or publications resulting from the project. A
subaward does not include agreements for the procurement or
purchase of routine goods or services.
Module I: Definitions
Subaward
 Refers to an agreement in which grant terms and
conditions are being flown down to the subrecipient
Subcontract
 Refers to an agreement in which contract terms and
conditions are being flown down to the subcontractor
Modifications (Mods)/ Amendments
 Refers to official changes to the terms & conditions of
the initial subaward/subcontract
Module I: When to Subaward
Appropriate Use of Subawards





the scope of work to be performed utilizes the facilities, employees and/or
resources of a subrecipient;
the subrecipient is contributing substantively to the scholarly and/or scientific
conduct of the project as described in the scope of work and has responsibility
for programmatic decision making;
the subrecipient has responsibility for adherence to applicable federal program
compliance and performance and is measured against whether the objectives
of the federal program are met;
the subrecipient will bring a unique knowledge and expertise to the project and
conduct the work mostly independent of UMBC’s direct supervision or control
with only general technical direction and coordination exercised by the UMBC PI;
and
the subrecipient, as part of its primary business operations, does not provide
the same goods and services to others and will be using the subaward funds to
carry out a program of the subrecipient organization rather than provide goods
and services to complete a program for the sole benefit of UMBC (e.g. purchase,
fabrication or repair of equipment, data processing, routine analytical or testing
services).
Module I: When to Subaward
Inappropriate Use of a Subaward






if the agreement is for the provision of goods or services within normal
business operations;
if the organization/business provides similar goods or services to many
different purchasers;
if the organization/business operates in a competitive environment for the
provisioning of the goods or services to be procured;
if providing goods or services are ancillary to the operation of the funding
agency; or
if the organization/business is not subject to the requirements of the
funding agency.
When a subaward is not appropriate, the PI/department should check with
the Procurement Department for information on how to purchase the goods
or services. Note, F&A is charged on only the first $25,000 of a subcontract
but on the entire amount of a vendor contractual arrangement.
Module I: Pass-Through Entity Relationship
Prime Sponsor
(Federal Agency, State Agency,
Contractor, etc..)
Prime Awardee
(UMBC)
Subrecipient 1
Subrecipient 2
Sub-Tier Subrecipient A
Sub-Tier Subrecipient B
Subrecipient 3
Module I: Pass-Through Entity Relationship



Privity of contract exists between UMBC & any subrecipient, meaning the
subrecipient should always contact UMBC for request and prior approvals (never the
prime sponsor). Privity exists between the prime sponsor and the prime awardee
(UMBC), and privity exists between the prime awardee (UMBC) and the subrecipient.
There is no privity between the prime sponsor and the subrecipient
The subrecipient has no legal recourse against the prime federal sponsor
The prime awardee (UMBC) would be ultimately responsible in the eyes of the federal
government for the performance of the subrecipeint. All proposed cost sharing or
unallowable costs generated by the subrecipient is the responsibility of the prime
awardee (UMBC). Subrecipients are, however, subject to federal audits due to the
relationship established by a subaward from the prime awardee (UMBC). It is up to
UMBC to ensure the subrecipient is in compliance with federal regulations. Federal
sponsors will recoup any cost sharing or unallowable costs through the prime
awardee (UMBC).
Module I: Workflow for a New Subrecipient
OSP receives
primary grant
with subaward
pre-approval
OSP contacts UMBC PI
to verify collaboration,
dates, amounts, etc…
Changes from
Original
Proposal?
yes
PI/Bus. Mgr. provides
OSP with revised
Budget/SOW/Etc..
no
OSP drafts
subagreement
with specific
flow-down T&C
Bus. Mgr. submits a
purchase request &
forwards the
PR # to OSP
OSP collects
subrecipient compliance
data & certifications
OSP contacts
Procurement for the
PO #, which becomes
the subaward #
OSP sends draft
agreement to PI
for review & approval
PI reviews & sends
approval to OSP
OSP partially executes
& sends to
subrecipient AO
Subrecipient begins
work & invoices
against PO
OSP receives fully
executed subagreement
& send to PI/Bus. Mgr.
Module I: Workflow for Modifications
OSP receives
primary grant/contract
amendment
OSP contacts UMBC PI
to verify sustainability
& get approval
for subaward mod
Revisions to
Original T&C?
yes
OSP drafts mod with
revisions & gets
PI approval
no
OSP drafts
modification
OSP verifies annual
certifications
or retrieves them
OSP forwards executed
mod to PI & Bus. Mgr.
OSP receives fully
executed mod from
subrecipient
OSP partially executes
mod & sends to
subrecipient for signature
Bus. Mgr. ensures PO
change request is
submitted to &
processed by
Procurement
Subrecipient
continues work
& invoicing
according to mod
Module I: Workflow for Invoice Payment
OSP receives the
subaward invoice from
Accounts Payable
OSP conducts a
2-person review via
the subaward checklist
yes
Problems?
OSP contacts the
subaward financial
contact or UMBC dept
no
Bus. Mgr. ensures
a receipt is entered
into PeopleSoft for
invoice payment
PI & Bus. Mgr. review
invoice & verify
expenses match
project progress
AP reviews, approves
& sends payment
request to the State
State reviews [30 days]
& verifies subrecipient
does not owe State
for any reason
OSP forwards the
invoice to the PI &
Bus. Mgr., notating
any issues/resolutions
Subrecipient is paid
amount of invoice -sometimes minus
outstanding State debt
OSP gets a resolution
to the invoice problem
Module I: Workflow for Close Out
Prime award ends,
subaward ends, or
PI terminates subaward
PI notifies OSP
of termination
or vice versa
PI request final
technical report
From subrecipient
OSP contacts
Subrecipient and
request property &
patent/invention reports
Subrecipient
submits reports
Subrecipient reports
are used to
close out
UMBC prime award
Module II: Policies & Compliance
Subrecipients must
follow all of these
laws/regulations/policies
Federal
Regulations
Refers to OMB’s/CFR’s; Federal Law
Federal Agency
Policies
Refers to Specific Agency Requirements
UMBC Policies / Terms & Conditions
Subrecipient Institute’s Policies
Module II: Policies & Compliance
We Flow Down:
Module II: Policies & Compliance
We Flow Down:

OMB A-21 (2 CFR Part 220)
Cost Principles for Educational Institutions
(Allowable, Allocable, Reasonable & Consistently-Treated Expenses)
OMB A-110 (2 CFR Part 215)
Uniform Administrative Requirements for Grants &
Agreements with Institutions of Higher Education,
Hospitals, and Other Non-Profit
(Management & Monitoring of Federal Funds; Also sets forth consistency &
uniformity among Fed Agencies for administration of grants & contracts to
institutions of higher education)
Module II: Policies & Compliance
We Flow Down:

OMB A-133
Audits of States, Local Governments, and Non-Profit Organizations

Title 34 CFR (§ 84.630)
Debarment means an action taken by a Federal agency to prohibit a
recipient from participating in Federal Government procurement
contracts and covered nonprocurement transactions. A recipient so
prohibited is debarred, in accordance with the Federal Acquisition
Regulation for procurement contracts (48 CFR part 9, subpart 9.4)
and the common rule, Government-wide Debarment and Suspension
(Nonprocurement), that implements Executive Order 12549 and
Executive Order 12689.
Module II: Policies & Compliance
We Flow Down:

Federal Funding Accountability & Transparency
Act of 2006 (FFATA)
-18 month delay for subrecipients

American Recovery & Reinvestment Act (ARRA)
- Subawards are subjected to ARRA reporting
- Reporting is due no later than 5 days after
each calendar quarter for subawards
Module II: Policies & Compliance

Federal Compliance Issues
- Proper monitoring of subrecipient spending
- Certifications for cost sharing & compliance

UMBC Subaward Policies & Procedures
- Defines use of subrecipient agreements
- Defines monitoring responsibility
- Provides general procedures
Module II: Policies & Compliance
Subrecipient Monitoring
PI & Department Responsibility





verifying that work performed by the subrecipient is conducted in
a timely manner and is acceptable;
reviewing and approving subrecipient invoices (to be forwarded by
OSP); Verify salary, expenses, & effort = work being produced!
maintaining regular contact with the subrecipient regarding the
technical aspects of the project;
performing site visits as necessary to review fiscal and
programmatic records and/or observe programmatic activities;
and
ensuring that all deliverables (e.g. technical, property, and
invention reports) required under the subaward are being
provided.
Module II: Policies & Compliance
Subrecipient Monitoring
OSP Responsibility





informing each subrecipient of the CFDA title and number, award name
and number, and name of the federal agency providing funding;
advising subrecipients of the requirements imposed on them by federal
laws, regulations, the provisions of the prime award, or provisions of
UMBC;
ensuring that non-profit subrecipients expending $500,000 or more in
federal awards during the subrecipient’s fiscal year have met the audit
requirements of OMB Circular A-133;
issuing a management decision (when subrecipients have A-133 audit
findings) within six months after receipt of the subrecipient’s audit
report and ensuring that the subrecipient takes appropriate and timely
corrective action;
considering whether subrecipient audits necessitate adjustment of
UMBC’s own records;
Module II: Policies & Compliance
Subrecipient Monitoring
OSP Responsibility (Continued)







requiring each subrecipient to permit UMBC and auditors to have access to
the records and financial statements as necessary for audit purposes;
reviewing and approving subrecipient invoices and forwarding them to the PI
for review and approval; and
verifying cost sharing commitment is documented and certified by
subrecipient
verifying the subrecipient has not been debarred or suspended from
receiving federal funds
verifying the subrecipient has an IRB or IACUC approved research protocol
performing desk audits and/or site visits as necessary for review of
subrecipient financial records; and
obtaining a Small Business Subcontracting Plan from the subrecipient if a
subaward is on a federal contract incorporating the Small Business
Subcontracting Plan requirement, the amount of the subaward is $550,000
or more AND the subrecipient is not a small business.
Module II: Policies & Compliance
What happens if we don’t comply?




UMBC NSF Audit 2006
Finding: Inadequate subrecipient monitoring of costs
Finding: Inadequate monitoring of subrecipient costsharing
Action: Audited UMBC subrecipients
Resolution: UMBC charged with developing a
comprehensive subrecipient fiscal monitoring plan,
including reviewing cost sharing data and supporting
cost documentation from its subrecipients on a
regular basis
Module II: Policies & Compliance
What happens if we don’t comply?
 HHS Audit of Yale subaward to U Mass Medical
School
 Major
signal about the responsibility to monitor
subrecipients
 Disallowed $194K of a $572K award
 Disallowed cost transfers, effort, cost allocation
methodology
Useful Websites







OSP
http://www.umbc.edu/research/OSP/
Excluded Parties List
https://www.epls.gov/
Harvester
http://harvester.census.gov/sac/
FFATA
http://www.ffata.org/ffata/
FDP
http://www.thefdp.org/
MD State Vendor Payments
https://interactive.marylandtaxes.com/extranet/gad/
GADLogin/login.asp
Query for viewing invoice pymts in PS:
UM_AP_VCHRS_BY_PROJECT_PD
Questions?
References
UMBC Subrecipient Policy & Procedures
 Univ. of Minnesota “Dirty Deeds” presentation
 Univ. of Mississippi Subrecipient Policy
 Management Concepts course “Subawarding
for Pass-Through Entities”
