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Subaward Monitoring and Management - D11

Purpose

The purpose of this procedure is to execute the OHIO obligation regarding the proper monitoring and stewardship of sponsored funds when those funds are used to issue a subaward to a subrecipient.  As a condition of an award made to OHIO, the University is obligated to comply with applicable federal, state, and local regulations. When the University assigns responsibility to a subrecipient for conducting a substantive portion of the work under an OHIO award, the University remains responsible to the sponsor for the management of funds and meeting performance goals. Thus, the monitoring of technical and financial activities associated with a subrecipient is an integral part of the University’s stewardship of sponsor funds.

For Federal grants OHIO will ensure compliance with OMB 2 CFR §200.331  Subrecipient and contractor determinations and §200.332  Requirements for pass-through entities.

It is the Principal Investigator’s (PI) responsibility to monitor the programmatic and financial activities of Subrecipients to ensure proper stewardship of sponsor funds, performance goals (scope of work or specific aims) are achieved, and compliance with the terms and conditions of the subrecipient agreement.

OHIO will ensure compliance with any restrictions on transactions with foreign individuals or entities as required by federal law, e.g., Executive Order 13224 of September 23, 2001, Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten To Commit, or Support Terrorism.

OHIO Principal Investigator or key personnel who have a significant financial interest in the subrecipient entity will disclose the interest to the OHIO’s Research Compliance office and, when appropriate, prepare and submit a conflict-of-interest management plan for review and approval.


Scope

This procedure applies to all sponsored projects subject to OU Policy 19.045 Administering External Grants and Contracts set up as separate accounts in the OHIO Financial Management System (FMS).


Procedure

Subrecipient and Contractor Determinations

OHIO must make case-by-case determinations whether each agreement it makes for the disbursement of Federal program funds casts the party receiving the funds in the role of a subrecipient, professional service provider, or supplier. For consistency in the treatment of cost categories, use these guidelines for all sponsored projects, including non-Federal sponsors.

When external resources are necessary to complete a project, the PI/PD will identify the providing entity (when known), scope of work, cost, deliverables, etc. The PI/PD will refer to the Federal Demonstration Partnership (FDP) online tools to determine if the procurement is a professional service, supply, or subaward and whether or not the procurement is subject to Finance Purchasing contracting guidelines . Software development services are subject to further evaluation by OIT prior to procurement, see OHIO technology review for more information.

An OHIO relationship with a subrecipient is documented in an agreement negotiated on behalf of the University by the Office of Research and Sponsored Programs (ORSP) and the authorized representative of the subrecipient organization.

Federal Demonstration Partnership (FDP)

OHIO uses the  FDP subaward templates and Forms  to expedite and streamline federal subaward review. The templates are considered an ongoing FDP demonstration. FDP workgroups monitor federal developments and make necessary updates. The templates are not meant to be edited.

Risk of Non-Compliance Assessment

The PI will identify subrecipients during the proposal process in the line-item budget. The ORSP Sponsored Programs Manager (SPM) will perform a preliminary check through visual compliance and SAM that the subrecipient listed in the budget is authorized to receive funds.

The SPM is responsible for ensuring the Subrecipient provides all the necessary documents for inclusion in the proposal (see procedure B05.10 Budget Preparation – subrecipient costs for further instructions).

Upon receipt of the Notice of Award (NOA) from the sponsor, the SPM will process the request for an account setup from Grants Accounting and forward the internal  Subrecipient initiation documents  to the Subaward Manager (SM).

The SM will complete a second visual compliance check upon receipt of the NOA and internal Subrecipient initiation documents. If eligible, the SM will continue with the subaward process. If not eligible, the SM will notify the SPM that the University is unable to work with the vendor. The SPM will work with the PI to establish alternate solutions.

The SM verifies the supplier/payee (subrecipient) is established in BobcatBuy. To ensure the supplier/payee is paid correctly, the supplier/payee payment information in the contract must match what is in the Oracle system. If the subrecipient is not listed in BobcatBuy, the SM will follow the process for new supplier/payee setup. If the supplier/payee is already in BobcatBuy, the SM will continue with the subaward process.

The SM will look up the Subrecipient in SAM to ensure eligibility to receive federal funds. If eligible, the SM will continue with the subaward process. If not eligible, the SM will notify the SPM that the University is unable to work with the supplier/payee. The SPM will work with the PI to establish alternate solutions.

The SM assesses the subrecipient’s financial status and internal controls by using the Subrecipient Risk Analysis tool.  Based on this evaluation, the SM determines the appropriate monitoring strategy which is reflected in the terms and conditions of the subrecipient agreement. The strategy is consistent with the level of risk determined by the University.

New Supplier/Payee Setup Process

When the Subrecipient is not listed in BobcatBuy, the SM sends the Supplier form, W-9, 3B forms to the Subrecipient organization POC for completion. Once the forms are returned, the SM saves the forms in a secure folder designated for supplier and W-9 forms. These forms are retained until the purchase order has been established in case there are questions. The SM completes the risk of non-compliance assessment.

An agreement is prepared and sent to the subrecipient for review and signature. In some cases, a subrecipient may not sign the agreement; therefore, ORSP does not send a request for vendor setup to Procurement until the agreement is fully executed.

Once the agreement has been fully executed, the SM sends the supplier and W-9 forms to procurement by email to supplier.management@ohio.edu . Procurement will set up the vendor in the system and notify ORSP by email when complete. The SM then sends a request for purchase order to Grants and Contracts Accounting.

Subaward Agreement Negotiation and Execution

When the Subrecipient is already established in BobcatBuy, the SM will send Attachment 3B to the Subrecipient organization POC for completion. The SM will draft a subaward agreement using the appropriate FDP template .

The subaward agreement will define the terms and conditions with which the Subrecipient will abide. It will also include necessary flow down clauses as required by the prime award agreement; a copy of which will be included in the sub-award agreement. The SM will forward the subaward package for signature to the Authorized Organization Representative (AOR) of each party.

Upon receipt of the fully executed subaward, the SM will request a purchase order from Grants Accounting. Funds will be encumbered against the account at the point of acceptance and signature of the subaward by the subrecipient's institutional official and final signature by Ohio University's institutional official.

Federal Funding Accountability and Transparency Act (2006)

In accordance with Federal Acquisition Regulation clause 52.204-10 (Reporting Executive Compensation and First-Tier Sub-contract Awards), Prime Contractors awarded a federal contract or order are required to file a FFATA sub-award report by the end of the month following the month in which the prime contractor awards any sub-contract greater than $30,000.

The FFATA Subaward Reporting System (FSRS) is the reporting tool Federal prime awardees (i.e. prime contractors and prime grants recipients) use to capture and report subaward and executive compensation data regarding their first-tier subawards to meet the FFATA reporting requirements. Prime contract awardees will report against sub-contracts awarded and prime grant awardees will report against sub-grants awarded. The sub-award information entered in FSRS will then be displayed on  www.USASpending.gov  associated with the prime award furthering Federal spending transparency. The SM prepares the FFATA sub-award report each month, as required by regulation.

Payment Invoices

The Subrecipient will follow the invoicing instructions indicated in the subaward (Line Item #2 in the FDP template). Unless otherwise indicated, subrecipient shall submit invoices not more often than monthly and not less frequently than quarterly for allowable costs incurred. Upon the receipt of proper invoices, Ohio University agrees to process payments in accordance with this Subaward and 2 CFR 200.305-Payment. All invoices shall be submitted to finance.grants@ohio.edu using Subrecipient’s standard invoice, but at a minimum shall include current and cumulative costs (including cost sharing), breakdown by major cost category, Subaward number, and certification, as required in 2 CFR 200.415(a)-Required Certifications. Invoices that do not reference Ohio University’s Purchase Order number shall be returned to Subrecipient. Invoices and questions concerning invoice receipt or payments shall be directed to the party's financial contact, shown in Attachment 3A of the subaward ( a sample is attached ).

Invoices under non-federal awards: A final statement of cumulative costs incurred, including cost sharing, marked "FINAL" must be submitted to finance.grants@ohio.edu , not later than 60 days (or as indicated in the subaward) after the final budget period end date or each budget period end date. The final statement of costs shall constitute Subrecipient's final financial report. The final report shall include the following statement by the Subrecipient: " By signing this report, I certify to the best of my knowledge and belief that the report is true, complete and accurate, and the expenditures, disbursements and cash receipts are for the purposes and objectives set forth in the terms and condition of the award ". 

Invoices under federal awards: A final statement of cumulative costs incurred, including cost sharing, marked "FINAL" must be submitted to Ohio University's financial contact, as indicated in clause 3 of the subaward agreement (Line Item #2 in the subaward - 2 CFR 200.415 Required Certifications). The final statement of costs shall constitute Subrecipient's final financial report. The final report shall include the following statement by the Subrecipient: “ By signing this report, I certify to the best of my knowledge and belief that the report is true, complete, and accurate, and the expenditures, disbursements and cash receipts are for the purposes and objectives set forth in the terms and conditions of the Federal award. I am aware that any false, fictitious, or fraudulent information, or the omission of any material fact, may subject me to criminal, civil or administrative penalties for fraud, false statements, false claims or otherwise.” (U>S> Code Title 18, Section 1001 and Title 31, Sections 3720- 3730 and 3801-3812) .

Payment may be withheld until receipt of reports, cost-share documentation and/or closeout documentation, which aligns with the approved subaward recipient's award and budget (Line Item #4 in the subaward). The Subrecipient retains all documentation of expenses and a detailed invoice is required by Ohio University .

The Ohio University PI/PD will review the subrecipient’s invoice in accordance with Subcontract Invoice Payment checklist .

The PI is responsible for ensuring the Subrecipient submits all required technical reports in accordance with the subaward agreement for approval. The PI retains these reports as support documentation for his/her project.

Modifications

Should the subaward recipient request changes be made to the original subaward agreement or purchase order, the SPM will review prime award terms and conditions for allowance and obtain PI's approval of requested changes and seek permission from the prime sponsor (if required). Once all details are managed, the SM will issue an amendment or modification to address those aspects of the agreement and related materials which need to change.

Monitoring

The Conflict-of-Interest Committee will identify and recommend the means to eliminate or manage any conflict of interest arising from a proposed subaward by the University to an entity in which the University or an OHIO faculty member has a financial interest or fiduciary relationship.

The PI/PD is responsible for monitoring the costs and activities of subrecipient as appropriate, to confirm that funding provided to the subrecipient is used for purposes authorized by the executed agreement and that the performance goals (scope of work or specific aims) are achieved.

As per the terms and conditions of the subaward, each subrecipient will permit OHIO’s sponsor and/or the University Grants Accounting Office and its auditors/representatives to have access to the subrecipient’s pertinent records and financial statements, as necessary.  If a subaward is selected for audit, Grants Accounting will notify the principal investigator and ORSP via email, providing notification of sub awardee selected, who is performing the audit, when the audit will take place and what documentation is being requested for review.

Subawards that are selected for audit are required to provide documentation for review to evidence:

  • Compliance with federal/state requirements with an emphasis on expenditures occurring for the given fiscal year audited. Example of documentation that can be requested can include, but is not limited to, the following:
    • Copies of invoices and appropriate system generated financial reports for each payment made.
    • Copies of Sole Source vs. Competitive Bid Request
    • Copies of Subaward Budget Negotiation Documentation Form and supporting analysis
  • Payments made to subrecipients were made within prime award guidelines and within the terms and conditions of the subaward. Example of documentation that can requested:
    • Subaward Payment Authorization form to verify if the appropriate reviews and signatures were provided for each payment made.
    • Proof of deliverables may be requested.
  • Compliance with the terms and conditions of the subaward and those flown down from the prime award.
    • Review of subaward files to ensure that the appropriate federal/state compliance reviews were performed and documented accordingly.
  • Compliance with the subrecipient monitoring requirement. Example of documentation that can be requested:
    • Email or any correspondence that verifies that the appropriate monitoring was performed.

Where it is not possible to obtain this access, alternate solutions may be considered but generally would require the approval of the prime sponsor.

Grants Accounting will confirm that subrecipients expending $750,000 or more during the subrecipient’s fiscal year in Federal awards have a single or program-specific audit conducted for that year in accordance with 2 CFR 200 Subpart F - Audit Requirements . Grants Accounting will identify any material weaknesses or reportable conditions that result from a single audit. Since subrecipients are subject to these periodic reviews in the form of audits and monitoring to assure compliance with all applicable requirements. Such reviews may result in the need for a Subrecipient Corrective Action Plan (CAP), which provides instructions to the subrecipient regarding requirements for corrective action(s) relative to reviewed “Findings.” Whenever a finding is issued, the Subrecipient is required to formally respond and demonstrate that the subrecipient proposed and/or completed corrective actions. By answering such questions, the subrecipient develops a plan that provides detailed information for the activities either completed or planned to address the issue(s) referenced in the findings.

If the Subrecipient fails to comply with the subaward’s Terms and Conditions including reporting and invoicing requirements, or does not fulfill its Corrective Action Plan, the pass-through entity may impose sanctions upon the Subrecipient including, but not limited to, withholding of payment, suspending, or terminating the subaward, or other remedies legally available (2 CFR §200.332(h)).

Closeout

Upon completion of the subaward activities, the Subrecipient must follow the closeout procedures defined in the subaward agreement. The final invoice and closeout documents must be sent to finance.grants@ohio.edu . Approval of the final invoice by the PI will serve as approval to completely close out the sub-award agreement. Grants Accounting will process the final invoice for payment and ask the PI to notify subward@ohio.edu to close the purchase order.

Prior to final payment and closeout, PI, ORSP and Grants Accounting must ensure OHIO receives all financial, property, patent, and other sponsored required reports from the subrecipient, and verify each for accuracy.


Questions

Questions regarding this procedure can be sent to subaward@ohio.edu .


Forms/Templates

Subrecipient or Contractor Classification - FDP

FDP Subaward Templates and Forms

Subrecipient Risk Analysis Tool

Subcontractor Invoice Payment Checklist


Roles and Responsibilities 

OWNER:

CONTRIBUTOR:

APPROVER:


References

OMB 2 CFR §200.331  Subrecipient and contractor determinations

OMB 2 CFR §200.332  Requirements for pass-through entities

OMB 2 CFR  § 200.415 Required Certifications

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