Subrecipient Monitoring

Outgoing Subagreements

The University of Colorado Boulder is responsible for monitoring the programmatic, technical and financial activities of its subrecipients to ensure proper stewardship of sponsored funds.

Sponsored research often involves collaborations with subrecipients. Subrecipients are external entities who are accountable to CU Boulder for the use of the funds provided to carry out a portion of the scope of work under a sponsored project.

CU Boulder is responsible for monitoring the programmatic, technical, and financial activities of its subrecipients to ensure proper stewardship of sponsored funds. Subrecipient monitoring applies to all subagreements issued by CU Boulder, regardless of the primary source of funding.

听

What is Subrecipient Monitoring?

Subrecipient monitoring includes those activities undertaken by CU Boulder to review the completion of the scope of work and financial oversight of the funds that were awarded to the subrecipient.

As the pass-through entity, CU Boulder must monitor the activities of subrecipients听as necessary to ensure:

  • funding is used for authorized purposes,听
  • the sub is in compliance with Federal statutes and regulations,听
  • the sub follows the terms and conditions of the subagreement, and听
  • subagreement performance goals are achieved

Pass-through entity: Non-federal entity that provides a federal award to a subrecipient to carry out a federal program; sometimes referred to as the 鈥減rime鈥 or 鈥渓ead鈥 organization

Why does CU Boulder have to monitor subrecipients?

The Office of Management and Budget Uniform Guidance 听requires pass-through entities to:

  • Evaluate each subrecipient鈥檚 risk of noncompliance to determine the appropriate level of monitoring听
  • Monitor the activities of the subrecipient as appropriate, which includes:听
    • Reviewing financial and performance reports from the subrecipient听
    • Ensuring subrecipients take action on any deficiencies pertaining to the subagreement听
    • Issuing management decision for audit findings pertaining to the subagreement

CU Boulder has an ethical responsibility to demonstrate that we are good stewards of the prime sponsor鈥檚 funds. Failure to monitor subrecipient compliance could result in:

  • Negative audit findings
  • Loss of existing awards
  • Loss of future awards
  • Loss of funds
  • Damage to reputation of Principal Investigator and University

Overview of Roles and Responsibilities

Subrecipient monitoring responsibilities are shared by the Principal Investigator (PI), the Office of Contracts and Grants (OCG), and Department Research Administrators (DRA). However, the primary responsible party is the Principal Investigator (PI).

Prior to drafting the subagreement, the Subcontracts Team assesses the subrecipient鈥檚 risk level:

  • Complete Risk Assessment and Checklist
  • Verify subrecipient entity has a Unique Entity Identifier (UEI) in the System for Award Management (SAM)
  • Run Visual Compliance Restricted Party Screening for the subrecipient entity
  • Review the Subrecipient Review Form, completed by the CU PI, for any higher risk items the PI may be aware of
  • Review Subrecipient Commitment Form or Letter of Intent completed by subrecipient鈥檚 central office
  • Complete Cost Price Analysis (subcontracts) or Budget Review (subawards)
  • Ensure IRB or IACUC approvals have been received when applicable

The Subcontract Officer writes a subagreement that mitigates any identified risks and flows down prime award terms and conditions.

Throughout the life of the subagreement, the Subcontracts Team continues to assess and mitigate sub risk:

  • Obtain and review subrecipient鈥檚 Single Audit annually
  • Receive written PI and Department approval for subsequent subagreement changes via the
  • Monitor changes to Visual Compliance Restricted Party Screening for the subrecipient entity
  • Manage closeout of subagreements

At the preaward stage:

  • Correctly identify the collaborator as a subrecipient or a vendor/consultant
  • Review subrecipient鈥檚 past performance to assess risk level of a potential subrecipient entity at the time of proposal
    • Request OCG preliminary review at the proposal stage if there are any concerns
  • Review and confirm subrecipient鈥檚 statement of work, budget, and budget justification
  • Complete Subrecipient Review form, confirming that PI accepts responsibility for subrecipients
    • Review award for any nonstandard terms and conditions to be included in the subagreement, such as:
      • Deliverables
      • Reporting guidelines
      • Special invoicing requirements
    • Indicate Export Control status
  • Complete (for subcontracts only)

During the subagreement period of performance:

  • Review and approve subrecipient鈥檚 invoices
  • Monitor subrecipient鈥檚 burn rate
  • Monitor subrecipient鈥檚 programmatic progress and ability to meet objectives of the subagreement
    • Review reports and deliverables
    • Verify technical performance to invoice expenditures
  • Provide written confirmation for each subagreement modification to OCG via
  • Escalate compliance concerns to OCG if necessary
  • Assist the PI with the above responsibilities
  • Route the Subrecipient Review form to the PI when a new subrecipient is being set up under an award. Review form for completeness.
  • Complete the , routing the form to the PI for authorization when necessary
  • Review invoices prior to sending to PI for approval and approving in Marketplace
  • Facilitate frequent communication between the PI, the project fiscal manager or project manager, and OCG鈥檚 Subcontract Officer to promote early detection of any potential issues

Initial Risk Assessment听

Before issuing a subagreement, OCG鈥檚 Subcontract Officer assesses potential risks involved with the subagreement by reviewing information about the subrecipient organization and the terms and conditions of the prime award.

Risk Assessment Factors:听

  • Is the subrecipient foreign or domestic?
  • Is the subrecipient an academic institution, nonprofit organization, government entity, or for-profit organization?
  • Does the subrecipient have a Negotiated Indirect Cost Rate Agreement?
  • Were the subrecipient鈥檚 most recent audit results satisfactory?
  • How mature is the subrecipient organization?
  • Does the subrecipient have a policy for determining conflicts of interest?
  • Does the CU Boulder PI have previous experience working with the subrecipient PI?
  • Does the subrecipient have experience with managing federal awards?
  • How long is the period of performance?
  • How much money is involved and what percentage of overall award funding does the subrecipient鈥檚 portion represent?
  • Can the subrecipient comply with prime award terms and conditions?
  • Is the subrecipient providing cost share?
A subagreement will not be issued if:

A Subagreement will not be issued if:

  • Subrecipient does not have a UEI assigned in SAM.gov
    • Full SAM.gov registration is not required
  • Subrecipient entity or PI is debarred or suspended or delinquent debt is reflected in SAM.gov
  • Subrecipient entity or PI is presently debarred or suspended or delinquent debt is reflected on Visual Compliance report
  • Subrecipient does not have a compliant conflict of interest policy in place, if required by sponsor/award
  • Financial management and accounting systems are inadequate to account for award funds in accordance with federal requirements
  • Subrecipient cannot comply with sponsor terms and conditions. For example:
    • A potential subrecipient under a grant prime award states they cannot comply with requirements under Uniform Guidance
    • A potential foreign subrecipient under an NIH grant states they cannot comply with NIH Grants Policy Statement, Section 15.2 (per NOT-OD-23-182)
If any of these conditions are true, consult your Subcontract Officer.

Mitigating Risk听

If potential risks are identified, steps must be taken to mitigate the risks in the subagreement. Strategies for mitigating subaward/subcontract risk include:

  • Incrementally fund the subrecipient with smaller amounts and/or shorter budget periods
  • Require more detailed reporting
  • Increase the frequency of reporting or invoicing
  • Require documentation to support invoiced amounts
    • Acceptable documentation includes receipts for purchases, vendor invoices, cancelled checks, time/attendance or payroll records, etc.
  • Additional meetings, e.g. scheduled check-ins via phone or virtual meeting
  • Withhold funds until evidence of acceptable performance
  • Require subrecipient to obtain technical or management assistance
  • Require additional prior approvals
  • For international subrecipients, always require that invoices and award document amounts are in US Dollars and that the conversion rate to be used is agreed upon in writing
  • Issue a fixed-price subagreement (as opposed to cost-reimbursable) with an invoicing schedule based upon the completion of milestones/tasks
    • Milestone and payment schedules should be completed and approved by both the CU Boulder PI and the subrecipient organization听
    • Fixed-price subagreements are subject to prime sponsor approval听
  • Site visits can be scheduled to review records and observe operations, limited-scope audits of certain activities can be arranged, or third-party evaluations can be required

Best Practices for Reducing Risk in All Subagreements:

  • Review supporting documentation to ensure that compliance requirements are being met, and require documentation from subrecipient as required
  • Seek guidance from OCG for complex award or compliance issues
  • Specify a frequency for subrecipient technical reports (monthly/quarterly/etc.)
  • Keep written record of PI approval on all invoices
  • Encourage frequent communication between the PI, the project fiscal manager, and OCG鈥檚 Sub Officer to promote early detection of any potential issues
  • Communicate CU Boulder鈥檚 requirements and expectations clearly to subrecipient upon execution of agreement
  • OCG reviews subrecipient audit certifications/information on an annual basis to ensure compliance. Subagreements may be amended to address any adverse findings.
  • Upon award closeout, ensure that all required deliverables and documentation are received and that the final invoice is marked as such

Invoice Approval

Invoice approval is one of most important subrecipient monitoring procedures.

  • The CU Boulder PI, with help from the DRA, must review and approve every invoice prior to payment
    • Payment will not be remitted for an invoice until the Department鈥檚 Fiscal Manager approves it, which should only be done after receiving Principal Investigator鈥檚 approval
  • When the invoice is being reviewed, the burn rate should be checked along with the subrecipient鈥檚 performance in accordance with Statement of Work
  • Every subagreement issued by CU Boulder reserves the right to reject an invoice. The right is also reserved on all subawards under 2 CFR 200.305
  • Utilize the Invoice Monitoring/Approval Checklist

All approved invoices must include:

  • Current and cumulative costs
  • Subagreement number
  • Certification (as required under 2 CFR 200.415)
    • Sample certification: 鈥淚 certify to the best of my knowledge and belief the at 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 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.鈥
  • Purchase order number
  • No human or animal subjects charges unless prior approval granted
  • CU Boulder PI approval
    • PI approval of all sub invoices is required and CU Boulder must provide written approval of invoices if asked by an auditor
  • Final invoice must be marked "final"