Transcript Slide 1
Subrecipient Monitoring
OFFICE OF RESEARCH ADMINISTRATION
2010
Definition:
Subcontract
Subaward
Consortium agreement
Subrecipient agreement
All are treated the same . . . . . . . . . . . . . . .
All are initiated by Grant Services . . . . . . .
Subaward Versus Vendor Agreement
Subrecipient:
performance
is measured against the objectives of
the federal program
has responsibility for programmatic decision making
is responsible for adherence to applicable Federal
compliance requirements
does not provide goods or services for the program
is usually another higher education institution,
hospital, or other non-profit organization
Subaward Versus Vendor Agreement cont…
Vendor:
provides
goods and services within normal business
operations
provides similar goods or services to many different
purchasers
operates in a competitive environment
provides goods or services ancillary to the Federal
program
is not subject to the compliance requirements of the
Federal program
is usually a company or may be an individual
Why is the type of agreement important?
Problems with classifying a subaward as a
vendor:
Federal
compliance requirements do not flow down to
vendor
no subcontract monitoring
costs might not be charged in accordance to budget
no restrictions on publicity or media releases
not subject to conflicts of interest or research
misconduct policies
potential for audit findings if misclassified
Why is the type of agreement important?
Problems with classifying a vendor agreement
as a subaward:
procurement
standards required by Federal Circular
A-110 are bypassed (competitive bid process, cost
and price analysis, sole source justifications, etc.
lack of IU Board of Trustee review, etc. for high dollar
requisitions)
may impose unnecessary administrative and
compliance burdens on the vendor (effort report
system, annual audits, etc.)
requires our subrecipient monitoring
limits vendor profits
Audits:
Annual A-133 audit of federal and federal pass
through accounts
Ad hoc agency audits
IU Internal Audit completed FY08
IA Key Findings:
additional risk analysis needed
additional training needed
How it works:
Prime
funding
agency
IUB & regional
awards
Subrecipient
1
Subrecipient
2, etc.
IUPUI awards
Subrecipient
1
Subrecipient Monitoring
Subrecipient
2, etc.
Types of sponsors:
Federal
Non-Profit
Foundations
Higher Education
State of Indiana
Other Governmental
Commercial
Can be Federal Pass
Through
Federal funds do not
lose their Federal
identity when being
passed through to a
lower tier recipient
We require from the subcontractor at the
proposal stage:
WHAT
WHY
Institutional letter of support
Work statement
Detailed budget
F&A rate agreement
States where to send
agreement for signature
Makes clear for both parties
what will be accomplished
For ORA review in line with
prime agency regulations
To ensure subcontractor
applies correct rate to IU
The subcontracting process:
Project Director
Grant Services
Writes proposal
---- subcontract in
budget.
Reviews subcontractor’s
budget for completeness
and adherence to agency
guidelines. Processes
proposal.
Fiscal Officer
Procurement
Services
Grant Services
Consultant
Initiates purchase order
Approves PO, records
subcontract in FIS.
Initiates requisition
Grant Services
Contract Officer
After award received,
writes subcontract;
obtains all approvals.
Research Administration ACE Team
Monitors subrecipient institution, reviews risk
Monitoring Responsibilities
Grant Services Teams
Fiscal
Officer
Internal
Audit
Project
Director
State Board
of Accounts
Research Administration ACE Team
Risk Analysis: Risk may be high if:
Lack of good documented internal controls
No previous IU experience with this subcontractor
Lots of findings on previous A-133 reports
Small entity not subject to A-133
Foreign institution
For-profit with no audited financial report
Subcontract agreement provideing more than
75% of the award to the subcontractor
Risk may be moderate if:
Previous A-133 findings related to IU
Subcontract fails to respond to our request for
A-133 report certification (ACE Team)
Subcontractor fails to submit timely
program/technical reports as requested in the
subcontract agreement
Risk may be low if:
Another educational institution in the State of
Indiana that is audited by the State Board of
Accounts (Purdue, Ball State, Indiana State, etc.)
Subcontract dollar amount low – less than $5,000
The subcontract agreement is with another
educational institution having consistently good
A-133 reports
Things to note:
We do not initiate subcontracts on underwritten
accounts
A risk determination can change during the life of
a subcontract if:
IU findings are noted on A-133 report
Subcontractor fails to submit progress reports
Subcontractor does not submit final invoices
by the required date
Research Administration Role:
Collects subcontract info at proposal stage
Award setup, account setup, budget setup
Prepare, negotiate, and sign subcontract
Establish subcontractor risk
Financial reporting
Fiscal compliance monitoring
Project Director Role:
One-on-one collaboration with subcontractor PD
Oversee programmatic aspects of subcontract –
is work is in line with subcontractor’s proposed
work statement and our expectation
Determine if work is proceeding at a reasonable
rate
Overall management and responsibility for
expenditures
Monitor changes in subcontractor’s key personnel
where IU approval is required
Fiscal Officer Role:
Initiate requisitions
Review and approve subcontract invoices
Review rate of spending with project director
Ensure that IU account is charged correct indirect
cost under object code 4073, 4074,or 4075
Collect final invoice within 60 days after
subcontract end date.
How to monitor invoices:
PROJECT DIRECTOR
FISCAL OFFICER
Rate of spending is
Time Period: Expense
reasonable given the work
completed to date
Costs are reasonable
Subcontractor’s progress
reports are submitted on
time as outlined in the
agreement
incurred within subcontract
period
Expense: detailed by
budget line
Costs: allowable per prime
agency and appear
reasonable to the project
Subcontractor’s indirect
cost agrees with their F&A
rate agreement
A word about object codes:
4073
4073 for subcontract charges up to $25,000
on accounts with zero IU indirect cost
4074
4074 for subcontract charges up to $25,000 on
accounts with indirect costs
4075
4075 for all subcontract charges over $25,000
regardless of indirect costs
Resources:
Office of Research Administration web
http://researchadmin.iu.edu/index.html
Subrecipient Monitoring Guidance on our web
http://researchadmin.iu.edu/GrantContract/gcace/ace_sub_monitoring.html
Important Notice 04-1, Subrecipients
http://www.ovpra.indiana.edu/cg/imp_notice/04-1.asp
Project Director Reports
https://fdrs.fms.indiana.edu/cgi-bin/pdw/Welcome.pl
OMB Circulars
http://www.whitehouse.gov/omb/circulars_default/
Jan Young
ACE Manager (Audit, Compliance, Effort)
Office of Research Administration
[email protected]
855-5326