TUC Sponsored Programs

Subawards / Subrecipient Monitoring


Effective Date:  1/1/14

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Table of Contents


Overview Administrative/Payment Procedure
Forms/Websites
THE UNIVERSITY CORPORATION'S SUBRECIPIENT MONITORING POLICY
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Overview 

Set-up

  • Principal Investigator (PI) and CSUN-Office of Research and Sponsored Projects (ORSP) determine subrecipient status during proposal stage
  • After receiving award, PI initiates subaward by contacting ORSP
  • ORSP checks Federal debarment or suspension on Excluded Parties List (EPLS)
  • ORSP generates and executes subaward
  • ORSP conducts risk assessment within 30 days after the final execution of the subaward
  • ORSP informs The University Corporation Sponsored Programs (TUC-SP) Liaison
  • TUC-SP Liaison prepares a Purchase Order (PO) for the subaward, attaches the subaward as supporting documentation and provides it to TUC-Accounting
  • TUC-Accounting encumbers amount of the contract in project budget
  • TUC-Accounting returns the PO with supporting documentation to the TUC-SP Liaison
  • TUC-SP Liaison files the PO with supporting documentation in the blue contract file folder
  • TUC-SP Liaison informs the TUC-SP Administrative Compliance Analyst of the subaward
  • TUC-SP Administrative Compliance Analyst enters subrecipient into the monitoring spreadsheet
  • TUC-SP Administrative Compliance Analyst notifies the subrecipient of the requirements for an A-133 audit, within 90 days after the execution of the subaward

Invoicing/Payment

  • Subrecipient provides agreed services and sends an invoice to PI
  • PI reviews and approves invoice
  • TUC-SP Liaison assists the PI with questions regarding allowability, allocability, and timeliness of the invoice, if necessary 
  • PI generates Check Request, attaches subrecipient's invoice and sends to TUC-SP
  • TUC-SP processes Check Request and pays subrecipient

Monitoring

  • ORSP conducts risk assessment within 30 days after the final execution of the subaward
  • PI monitors the subrecipient's activities on an ongoing basis during the course of the project
  • TUC-SP Administrative Compliance Analyst requests the most recent certification of the A-133 audit within 90 days after the end of the Fiscal Year
  • TUC-SP Administrative Compliance Analyst reviews the submitted A-133 audit certification for audit findings.
  • TUC-SP Administrative Compliance Analyst reviews the posting on the Federal Audit Clearinghouse (FAC) database website to confirm the subrecipient's certification, prints out the related section and files it.
  • If the subrecipient doesn't submit an audit certification within 9 months after the end of the fiscal year, TUC-SP Administrative Compliance Analyst reviews the posting on the Federal Audit Clearinghouse (FAC) database website for audit findings, prints out the related section and files it.

Audit Findings 

  • TUC-SP Administrative Compliance Analyst follows up with the subrecipient in case of audit findings, requesting corrective action plans and the time frame for implementation.
  • TUC-SP Administrative Compliance Analyst requests statement of the subrecipient regarding the progress/completion of the implementation
  • Within 6 months after the final implementation of the corrective action, TUC-SP Director of Sponsored Programs issues a management decision on the subrecipient's corrective action.
  • If applicable, ORSP reviews risk assessment and determines need for increased monitoring
  • If applicable, ORSP and PI modify/terminate subaward

 


Forms/Websites:




THE UNIVERSITY CORPORATION'S SUBRECIPIENT MONITORING POLICY


1 Responsibilities

The ultimate oversight responsibility for subrecipients remains with the Principal Investigator (PI). The University Corporation - Sponsored Programs (TUC-SP) and the Office of Research and Sponsored Projects (OSRP) will assist the Principal Investigator (PI) in conducting an effective monitoring process. Under certain circumstances a professional audit firm may be employed to conduct an audit of the subrecipient.

1.1 Responsibilities of the Principal Investigator (PI)

The PI has the ultimate oversight responsibility for the subrecipients. The PI will:

  • During the proposal stage together with ORSP evaluate whether the proposed entity is a sub-recipient or vendor  
  • Monitor the subrecipient’s technical and programmatic activities as they relate to the subagreement
  • Monitor the periodic progress reports
  • Verify the subrecipient has completed the scope of work in both a timely and satisfactory manner
  • Ensure that subrecipient invoices are submitted in a timely manner, are approved and forwarded to TUC-SP
  • Monitor invoices from the subrecipients to ensure that they are reflective of progress and adhere to allowability and Federal cost regulations
  • Ensure compliance with the terms of the contract
  • Maintain regular contact with the subrecipient
Non-compliance with technical reporting requirements or dissatisfaction with level of subrecipient progress should be reported immediately to OSRP and TUC-SP. The PI should contact TUC-SP for questions and assistance regarding the allowability of costs and other financial matters.  

 

1.2 Responsibilities of the Office of Research & Sponsored Programs (ORSP)

  • During the proposal stage together with the PI evaluate whether the proposed entity is a sub-recipient or vendor
  • Use the Excluded Parties List (EPLS) to determine if the potential sub-recipient has been suspended or debarred from doing business with the federal government.
  • Execute the subaward agreement with the subrecipient
  • Communicate requirements of the awarding agency to the subrecipient
  • Conduct the initial risk assessment of the subrecpient using the Subrecipient Risk Assessment (.xls) form  within 30 days after the final execution of the subward with the subrecipent
  • Work with the PI and TUC-SP to address any issues related to the subaward 

 

1.3 Responsibilities of The University Corporation-Sponsored Programs (TUC-SP)

TUC-SP will:

  • Confirm that a sub-award is allowable under the sponsored project
  • Enter subrecipient into the monitoring spreadsheet
  • Assist the PI in reviewing subrecipient invoices to ensure costs are allowable, allocable and reasonable, and are appropriate for the approved budget and the terms and conditions of the subagreement.
  • Notify the subrecipient of the requirements for an A-133 audit
  • Request the most recent certification of the A-133 audit
  • Review the submitted A-133 audit certification and/or posting on the Federal Audit Clearinghouse (FAC) database (https://harvester.census.gov/facweb/Default.aspx) website
  • Follow-up with the subrecipient in cases of audit findings
  • If applicable, determine the allowability of costs by the subrecipient and adjust charges to the project
  • If applicable, work with ORSP and PI: to review the risk assessment for the subrecipient, decide on additional monitoring activities, and if necessary modify/terminate the subaward



2 Determination of Subrecipient

The determination of the potential need for a subaward to a business/organization is normally made at the proposal stage. The Principal Investigator identifies the scope of work to be performed by the potential subawardee and must be prepared to justify the selection.


2.1 Code of Conduct / Conflict of Interest

When selecting a potential subawardee, the Principal Investigator should be aware of the 'Codes of Conduct' section (Subpart C.42) of OMB Circular A-110 ("Uniform Administrative Requirements for Grants and Agreements for Institutions of Higher Education, Hospitals, and Other Non-Profit Organizations") which states the following:


"C.42 Codes of conduct. The recipient shall maintain written standards of conduct governing the performance of its employees engaged in the award and administration of contracts. No employee, officer, or agent shall participate in the selection, award, or administration of a contract supported by Federal funds if a real or apparent conflict of interest would be involved. Such a conflict would arise when the employee, officer, or agent, any member of his or her immediate family, his or her partner, or an organization which employs or is about to employ any of the parties indicated herein, has a financial or other interest in the firm selected for an award. The officers, employees, and agents of the recipient shall neither solicit nor accept gratuities, favors, or anything of monetary value from contractors, or parties to subagreements. However, recipients may set standards for situations in which the financial interest is not substantial or the gift is an unsolicited item of nominal value. The standards of conduct shall provide for disciplinary actions to be applied for violations of such standards by officers, employees, or agents of the recipient."

Note: Principal Investigators must also consider the University's policy on Conflict of Interest as well as that of the granting agency, if applicable.



2.2  Definition of a Subrecipient

A subrecipient serves as a co-investigator, is responsible for the end results of the research effort equally with the principal investigator where federal funds are being passed through to another entity. A Subrecipient:

    • Has its performance measured against whether the objectives of the Federal program are met;
    • Determines who is eligible to receive what federal financial assistance;
    • Has responsibility for programmatic and/or administrative decision making;
    • Has responsibility for adherence to applicable Federal program compliance requirements; and
    • Carries out a program of the organization as compared to providing goods or services for a prime recipient

A subrecipient is required to meet various federal regulatory and compliance regulations in accordance with OMB Circular A-133. As recipient, The University Corporation is required to monitor the compliance.


2.3  Definition of a Vendor

A vendor is responsible for providing goods or services necessary to conduct the research effort. A vendor is not responsible for the research results. A vendor:

    • Provides the goods and services within normal business operations;
    • Provides similar goods or services to many different purchasers;
    • Operates in a competitive environment; (i.e. competes with others who can provide a similar service)
    • Provides goods or services that are ancillary to the operation of the Federal program; and
    • Is not subject to compliance requirements of the Federal program

A vendor is only required to meet the terms of the procurement contract and the OMB Circular A-110 requirements. Compliance requirements do not pass through to vendors.

 
Sub-recipientVendor
Sub-recipient services are uniquely designed in response to each project, and not provided commercially.Vendor provides goods or services within normal business operations which are ancillary to the operation of the project.
Sub-recipient technical lead is usually a scientific collaborator or even a co-PI on the project.Vendor provides similar goods or services to many different purchasers in a competitive environment.
Sub-recipient retains rights to intellectual property.Vendor retains no rights to intellectual property.
Sub-recipient results are likely to be published in the scientific literature and/or sub-recipient is likely to be a co-author on the publication. 
Sub-recipients are subject to compliance requirements of the federal project.Vendor is not subject to compliance requirements of the federal project.


2.4  Judgment in Making Determination

There may be unusual circumstances or exceptions to the listed characteristics. In making the determination of whether a subrecipient or vendor relationship exists, the substance of the relationship is more important than the form of the agreement. It is not expected that all of the characteristics will be present and judgment should be used in determining whether an entity is a subrecipient or vendor.


2.5  Importance of Making the Proper Determination

It is important to be aware that it is the nature of the relationship that determines whether or not an entity is a subrecipient or a vendor. The dollar amount of the purchase order or subcontract is not a determining factor. A careful review of the nature of services to be provided and an appropriate determination as part of the proposal budget review process will eliminate such post award problems as:

  • Obtaining sponsor prior approval for unbudgeted subcontracts;
  • Delays in processing requisitions for purchased services budgeted as subcontracts;
  • Meeting audit and compliance requirements with for-profit organizations where a vendor relationship should exist

By making a proper determination in the proposal stage, the appropriate relationship can be established from the start. This is especially true for an unbudgeted subcontract. If the unbudgeted subcontract is of a subrecipient nature, sponsor approval is required prior to entering into a subcontract. If it is a vendor relationship, no sponsor approval is required unless specified in the award terms and conditions. Making the determination is also important to the vendor or subrecipient. Additional auditing requirements and other compliance regulations apply if the subcontractor is a subrecipient. It is best to make the determination at the proposal stage so if a subrecipient relationship exists, that relationship is recognized by the awarding agency and approved in advance. It is unlikely that an unplanned subrecipient relationship would arise in the course of a sponsored research effort. If this occurs, sponsor approval is required.


2.6 For-Profit Subrecipient

Since the requirements for non-profit subrecipients do not apply to for-profit subrecipients, the pass-through entity is responsible for establishing requirements, as necessary, to ensure compliance by for-profit subrecipients. The contract with the for-profit subrecipient should describe applicable compliance requirements and the for-profit subrecipient's compliance responsibility. Methods to ensure compliance for federal awards made to for-profit subrecipients may include pre-award audits, monitoring during the contract, and post-award audits.


2.7 Subrecipients under Federal Contracts (Not Grants)

In order to establish a subrecipient relationship under federal contracts it is important that the contractor not subcontract technical or scientific work without the contracting officer's advance knowledge (Federal Acquisition Regulation-FAR 35.009). During the negotiation of a cost-reimbursement R&D contract, the contracting officer must obtain complete information concerning the contractor's plans for subcontracting any portion of the experimental, research, or development effort." Thus, if a subrecipient relationship is not approved as part of a proposal submitted to the agency, written sponsor approval would be required before any unbudgeted subrecipient subcontract could be established.


2.8 Debarment/Excluded Parties

Before entering into a subaward agreement, ORSP will check on the Excluded Parties List (EPLS) to determine if the potential sub-recipient has been suspended or debarred from doing business with the federal government.



3. Internal Notification 

  • After receiving the award, the Office of Research and Sponsored Projects (OSRP) will notify The University Corporation via the Project Data Sheet of a subaward being included in the project.
  • The University Corporation-Sponsored Programs (TUC-SP) will enter the subaward and subrecipient information into the A-133 Subrecipient Monitoring List.


 

4. Notification of Subrecipient

  • Within 90 days after the entry into the Subrecipient Monitoring List, TUC-SP will notify the subrecipient in writing of his responsibilities.
  • After the end of the fiscal year, TUC-SP will request a certification from the subrecipient, regarding the A-133 audit, and if applicable request a copy of the audit report. If the subrecipient fails to submit an A-133 audit certification, or if there are concerns regarding the correctness of the certification TUC-SP will review the Federal Audit Clearinghouse database (https://harvester.census.gov/facweb/Default.aspx)



5. Risk Assessment

The Director of Research & Sponsored Projects at ORSP or his designee will conduct the risk assessment of the subrecpient. The risk assessment will be conducted using the Subrecipient Risk Assessment (.xls) form and should be completed within 30 days after the final execution of the subward. The following factors will be included in the consideration:

  • Foreign or Domestic Entity
  • Maturity of the Organization (start-up, few years in operation, mature)
  • Organization Type (Industry, Non-Profit, University)
  • Granting Agency (Federal, Non-Federal, private or foundation
  • Award type from Granting Agency (Grant, Contract, Subcontract)
  • Amount Subcontract 
  • Percentage of TUC Award Subcontracted
  • Accounting Systems Established
  • Procurement Systems
  • Negotiated Indirect Cost Rate Agreement
  • Audit Report
  • Prior experience working with TUC/CSUN
  • ITAR/EAR (Export Controlled) Type of work
  • Compliance issues (humans animals, DNA, stem cells)
  • Location of Work
  • Relationship of subrecipeint to PI and potential for conflict of interest
  • Statement of Work & Deliverable
  • 'Advantaged' Status Claimed
  • Other special considerations

The risk assessment may be revised, as new information becomes available. 

6. Monitoring Procedures 

The Principal Investigator has the responsibility, on an ongoing basis throughout the life of the award, to monitor the activities of sub-recipients in accordance with the governing agreement, to assure that awarded funds are used for authorized purposes in compliance with the provisions of the agreement, and to ensure that performance goals are met. The Principal Investigator may consider the following subrecipient monitoring procedures when appropriate:


6.1 Ongoing Review

Review of Invoices and Expenses-to-Budget
Evidence of the regular review should be in place and retained on file. "Evidence" can be in the form of a Principal Investigator's initials or authorizing signature on Check Request, e-mail communications, and notes of meetings with the department grant administrator, etc.

 

Clarification of Invoiced Charges
Request explanations of any unusual, miscellaneous, apparently excessive or other charges invoiced by the subrecipient. If the explanations are not sufficient to render judgment on the allowability of the cost, and the terms of the subcontract permit, request detailed justifications from subrecipients. Request, if the terms of the subcontract permit, particularly from high-risk subrecipients, detailed support for selected invoiced charges to verify their appropriateness and reasonableness. Examples of detailed justifications that may be requested from subrecipients include:
    • Payroll records/data
    • Copies of paid invoices showing the cost of items purchased and Vendor Justification Forms if required by Federal contract
    • Descriptions of services rendered by consultants including hourly rates and time reports
    • Details of incurred travel charges, stating the purpose, airfare, meals, ground transportation, unallowable costs, etc.
    • Costs determined to be unallowable or unreasonable should be disallowed
In circumstances where questionable costs remain unresolved, particularly when subcontract terms do not permit requesting supporting documentation, it may become necessary to conduct a definitive audit of all or a portion of questionable costs.

On-site Visits
On-site visits conducted by the PI to evaluate both compliance with the scientific objectives of the project and the appropriateness of the subrecipient's administrative systems, processes, and charges should be documented via correspondence, meeting notes, trip reports, etc. and retained on file.

Audits
Discretionary audits of subrecipients are an acceptable monitoring procedure under federal regulations, and all of the subrecipient agreements contain "right-to-audit" clauses. Formal audits are performed infrequently, however, and the Principal Investigator should contact the Office of Research and Sponsored Projects (OSRP) and The University Corporation.

Monitoring of Subrecipients not subject to A-133, including foreign and for-profit entities

Because A-133 does not apply to foreign or for-profit subrecipients, The University Corporation may establish its own requirements, as necessary, to ensure compliance by such subrecipients. The PI should consider using subrecipient monitoring techniques similar to those used for entities that are subject to A-133. Contracts with foreign or for-profit subrecipients should describe applicable compliance requirements and responsibilities. Methods to assess compliance with federal subawards made to foreign or for-profit subrecipients may include pre-award audits, and on-site visits. In addition, subrecipients that are not subject to A-133 may be asked to submit supporting documentation in the form of original receipts, copies of payroll records, audits, etc. if circumstances warrant.

In addition to routine monitoring procedures, the Office of Research and Sponsored Projects (OSRP) and The University Corporation will work with Principal Investigators to establish channels of communication with subrecipients that require further scrutiny. Administrators at such subrecipients may be asked to complete questionnaires documenting their internal controls and grants management procedures.


7. A-133 Audit Monitoring

7.1 Request A-133 Audit Reports

TUC-SP will


7.2 No Audit Findings

  • TUC-SP will file the A-133 audit certification in the subrecipient file folder and mark the subrecipient monitoring spreadsheet


7.3 Audit Findings

In case of an audit finding TUC-SP will:

    • Follow-up with the subrecipient
    • Request complete audit report and submitted corrective action plan
    • Request assurance from the sub-recipient that corrective action efforts have been implemented
Within six months of the receipt of the audit finding issue a management decision on:
    • The effectiveness and implementation of the subrecipient's corrective action cited in the response to the audit finding (this may involve on-site monitoring)
    • Ensure that internal controls at the subrecipient are in place 
    • If applicable, determine the allowability of costs by the subrecipient and adjust charges to TUC's records
    • File all relevant documentation in the subrecipient file folder and mark the information in the subrecipient monitoring spreadsheet
If applicable, ORSP and the PI in coordination with TUC-SP will:
    • Review the risk assessment for the subrecipient, decide on additional monitoring activities,
    • If necessary modify/terminate the subaward


 7.4 No A-133 Certification is Submitted by the Subrecipient

TUC-SP will

  • If the subrecipient doesn't submit an audit certification within 9 months after the end of the fiscal year, review the posting on the Federal Audit Clearinghouse (FAC) database (https://harvester.census.gov/facweb/Default.aspx) website for audit findings
  • Print out the audit report, if available
  • File all relevant documentation in the subrecipient file folder and mark the information in the subrecipient monitoring spreadsheet
  • In cases of inability or unwillingness of a subrecipient to conduct required audits, OSRP and TUC-SP may consider taking appropriate sanctions


 7.5 A-133 Not Complete

TUC-SP will

  • Request planned completion date from subrecipient
  • Mark the information in the subrecipient monitoring spreadsheet as pending
  • Once the completion date specified has past, follow up with the sub-recipient.
  • Mark the information in the subrecipient monitoring spreadsheet as complete

 

 7.6 Not Subject to A-133

TUC-SP will

  • Mark the information in the subrecipient monitoring spreadsheet 






8. Subrecipient Record Retention

Sub-recipient documentation will be retained in a manner consistent with The University Corporation's Record Retention Policy. 

 

The requirements listed in this policy are not exhaustive of all compliance requirements. In addition to the elements noted above, there may be additional sponsor- or program-related requirements that mandate collecting and documenting other assurances (e.g., on lab animals, human subjects, biohazards, etc.) during the course of the project. 



Contact Information

Office of Research and Sponsored Projects (ORSP)

Shirley Lang
Assistant Director
(818) 677-2901
shirley.lang@csun.edu
Mail Stop: 8232

 

The University Corporation, Sponsored Programs (TUC-SP)
Mahyar Sadri
Sponsored Programs Analyst - Administrative Compliance
(818) 677-6414

Mail Stop: 8309