Transcript Subrecipient Monitoring: The Ties That Bind NCURA Regional

Subrecipient Monitoring
NCURA Regional Conference
April 25, 2007
Jeri Muñiz
Director, Sponsored Projects
University of California, Irvine
Csilla M. Csaplár
Contract & Grant Officer
Stanford University
Agenda
► Subaward
determination
► Overview of Federal regulations
► What to do and who does it
 Responsibilities of the PI, department
administrator, central administrator
► Tips
and Tools during the life of the
subaward
► What are other institutions doing?
Decision Matrix
Subaward vs. other procurement action
A subaward is likely appropriate if you can answer “yes” to any of the
following questions:
► Does the subrecipient entity’s statement of work represent an intellectually
significant portion of the programmatic effort of the overall project?
► Does the entity have responsibility for programmatic decision making?
► Could the entity’s work result in intellectual property developed or
publishable results (including co-authorship)?
► Will the entity need animal and/or human subjects approvals for its
portion of the work?
Other procurement actions may be appropriate when the vendor:
► provides the goods and services within its normal business operations;
► provides similar goods or services to many different purchasers;
► operates in a competitive environment;
► provides goods or services that are ancillary to the operation of your
entity’s sponsored project;
► is not subject to compliance requirements of the Prime sponsor.
Federal Regulations
The following regulations guide Subawards
and Subrecipient Monitoring:
► OMB Circular A-133
► OMB Circular A-110
► Federal Acquisition Regulations (FAR)
 Primarily for contract as funding mechanism
OMB A-133 Sets the Stage
The pass-through entity is subject to oversight
per OMB Circular A-133
When the pass-through entity issues subawards
it must:
A. Monitor the activities of its subrecipients
B. Ensure that federal awards are used in
compliance with laws, regulations, and the
provisions of agreements
C. Ensure performance goals are achieved
Oversight responsibilities are
similar to those of a federal
agency dealing with its prime
recipients.
A-133 Expectations
1. Subaward Policies and Procedures exist
that:
 Adequately address your responsibilities under A133
 Assign institutional roles and responsibilities
 Address subrecipient monitoring
►How
is routine monitoring performed?
►Is Risk Assessment policy or guidance needed? If yes,
how is it implemented?
A-133 Expectations, cont.
2. Evidence of Adequate Subrecipient
Monitoring
 A-133 Audit Monitoring
►Data
downloaded from Single Audit website
(http://harvester.census.gov/sac/) is not sufficient by
itself
►Need evidence that it was reviewed by institutional
official relevant to the particular subaward
 How are non-A-133 entities reviewed?
A-133 Expectations, cont.
3. Evidence of:
 Cost-Sharing Monitoring
►Directly
attributable to benefiting project
►Detailed backup for expenditures
►Donations are be accompanied by a formal appraisal
4. Institutional policy that details expectations
for adequate documentation in the following
areas:
 Pre-Award Reviews
 Life-of-Award Monitoring
 Award Closeout
Proposal Preparation Stage
Proposal Preparation
Your PI, realizing the need for additional
expertise, requests a proposal from
potential subrecipient(s).
Subrecipient’s proposal must include:
1. Statement of Work (SOW)
2. Budget and Justification
3. Subrecipient Commitment form or letter of
commitment
4. Any other documents required by your
institution or by Sponsor
Proposal Preparation: PI’s role
Your PI assesses the potential Subrecipient’s ability to
perform the work successfully based on:
 Past performance
 Technical/financial resources
 Proposed scope of work
The PI then:
1.
Integrates the Subrecipient’s SOW into your entity’s work
statement
2.
Includes the Subrecipient’s budget as a direct cost line
item in your entity’s budget
3.
Forwards completed proposal to Institutional
Representative for review, including the Subrecipient’s
proposal
Proposal Preparation:
Institutional Representative’s role
The Institutional Representative will:
► Verify it is a subaward (as opposed to
another form of procurement action)
► Review the proposal for completeness,
accuracy, and compliance with institution
and sponsor policies
► Verify that the potential Subrecipient has
acceptable business practices
► Issue management decisions on audit
findings (if applicable)
► Submit the proposal to the sponsor for
consideration
What Should You Look For?
►Subaward vs. other procurement
►Use of negotiated rates
►Human subjects and/or animal
►Conflict of interest
►Assurances and certifications
►Audit status
action
subjects
►Subrecipient Statement of Work & Deliverables
►Subrecipient Budget and Budget Justification
 Are fringe benefits and F&A calculated in accordance with
approved rates?
► What if the subrecipient doesn’t have an approved rate?
 Cost-sharing commitment
 Cost and Pricing Data/Certificate
As advance preparation for the award, ensure all required
assurances are filed and all necessary documents are obtained.
Award Initiation Stage
Prime Award Consideration
1.
2.
3.
Sponsor considers your institution’s
proposal for acceptance
Your Institutional Representative will
negotiate Terms and Conditions (T&C’s)
with the sponsor as needed
An award is made to your institution
The Subrecipient is subject to flow-down of
T&C’s from both the prime
funding source & pass-through
entity(s)
Institutional Representative
Prepares and Issues Subaward
Your Institutional Rep will:
► Verify all approvals are in place
► Receive and review all supplemental
documentation
► Prepare draft subaward agreement
► Negotiate terms of subaward with
Subrecipient
► Send subaward to subrecipient for execution
patti
Issues Addressed in the
Subaward Document
Department can influence:
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Statement of Work
Key Personnel
Period of Performance
Dollar Amount
Payment Terms
Prior Approvals
Cost Sharing
Reporting Requirements
Institutional Rep Determines:
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Intellectual Property
Equipment Terms
Indemnification, ITAR
HIPAA, Rights in Data
Publication, Termination
Reference to Cost Principles
Certs and Reps/Assurance
Flow-Down Requirements
Audit Requirements
Additional Subaward Approvals Required
To be completed or obtained by your
institution’s PI:
► Fair and Reasonable Cost Analysis
► Sole Source Justification (if applicable)
► Prior approval for entering into a
subaward (federal contracts only)
Samples of forms can be found online at:
ora.stanford.edu/ora/osr/osr_forms.asp
Before Authorizing Work to Begin
► Determine
financial adequacy of the Subrecipient
► Acceptable A-133 or DCAA audit, or financial questionnaire
► Obtain satisfactory evidence of F&A rates/FB rates
► Conduct and document formal or informal cost & pricing analysis
and certificate if needed
► Verify Subrecipient is not debarred or suspended
► Obtain sole source justification if needed
► Verify all necessary approvals have been received
 Agency prior approval normally needed for contracts
 Some agencies require prior review of text
► Make high-risk/low-risk determination
► Ensure all compliance approvals have been
obtained
Potential Indicators of High-Risk
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A qualified audit report, or failure to have a current audit report
Inadequate response to a financial questionnaire
History of non-compliance
History of non-performance or failure to use funds for their authorized
purposes
New subrecipient (or new to this type of project)
New personnel or systems
Large subaward/large percentage pass-through
Award size relative to subrecipient’s sponsored research portfolio
Criticality to overall success of pass-through entity’s project
Subrecipient in a remote location
Type of subrecipient (is the subrecipient already subject to A-133?)
Let’s review a sample Risk Analysis tool!
Potential Responses
to High Risk Subrecipients
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Corrective Action Plan
Discuss need for special monitoring with PI/department
 Ask for extra contact between PI and Sub’s PI
 Ask for more frequent technical reporting
Engage in “agreed-upon procedures engagements”
Add more detailed or frequent invoicing requirements
 Add requirement for expenditure backup materials
Tie receipt of technical progress reports to payments
Require on-site monitoring (technical and financial)
Add more stringent termination or stop-work language for
failure to comply with requirements
Monitoring an Active Subaward
Compliance Responsibilities of
the Pass-Through Entity
Your PI is primarily responsible for
monitoring the subrecipient's expenses
for:
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Allowability
Allocability
Reasonableness
Ensuring the performance goals of the
project are achieved
Department administrators play a key role in this step!
Compliance Responsibilities of
the Subrecipient
In accordance with compliance regulations, Subrecipient is
responsible for:
WORK - Fulfilling the program’s technical goals
MONEY - Spending in accordance with T&C’s and
applicable OMB Circulars
A-21 - Cost Principles for Educational Institutions
A-110 – Uniform Admin Requirements for Non-Profit
Organizations
► A-133 - Audits of States, Local Governments, and Non-Profit
Organizations
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RULES - Monitoring both programmatic and financial
aspects of the program
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HIPAA compliance
Reports – Technical AND Financial
Human and Animal Subjects
Patents and Inventions (if applicable)
During the Life of the Subaward
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PI/Department monitors subrecipient’s adherence to terms of
subaward
PI/Department modifies subaward (add $$, time) as appropriate
Institutional Rep ensures annual compliance (A-133, IRB, etc.)
PI approves invoices for payment
Property clauses are flowed down from prime award
 Property Management Office verifies Subrecipient’s property system
is “approved”
 PMO sends property reports to prime sponsor (as required)
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PI/Department plans for a graceful closeout at end of subaward
 Note: This is not necessarily the same date as the end of your
project
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PI monitors scientific progress toward milestones outlined in the
subaward proposal and agreement
Expenditures must reflect scientific progress!
PI Monitors Subrecipient’s Adherence
to Terms
The PI ensures that:
► Technical progress is being made according to
schedule
► Subrecipient has proper control of property
► Subrecipient is continuing to meet compliance
requirements
► Subrecipient is meeting reporting requirements
► Required prior approvals are obtained
Monitoring Subrecipient Invoices: PI
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Invoices from the subrecipient allow your institution to
reimburse for project related expenses
Level of detail required is specified in the subaward for:
 Salaries
 Travel
 Equipment
 Subawards
 Material and Supplies
 Cost-Sharing
 Certification
 F&A (rate and amount)
 Totals
 Cumulative expenditures by line item
Monitoring Subrecipient Invoices: PI
Verify costs are incurred within the period of
performance
► Ensure expenses are aligned with technical
progress
► Verify cost sharing is appropriately reflected if
required
► Do not approve invoices for payment if technical
or financial reports are delinquent
► Do not approve invoices that are insufficiently
detailed for you to feel confident the costs are
►
allowable, allocable, and reasonable
Communicate any deficiencies to the Subrecipient and
Institutional Rep in a timely manner!
Subrecipient Monitoring at Closeout
Ensure a Timely Closeout
► 90
days before the end date of the subaward,
confer with the Subrecipient to determine whether
work will be completed on time.
 If not, request a no cost extension from prime. If a
no cost extension is granted, pass it through to the
Subrecipient.
►
30-90 days before the end, request an invoice
marked “Final” and remind the Subrecipient when
it will be due
 An invoice marked “Final” is always required.
Ensure a Timely Closeout
► Upon
expiration…
 Obtain all required reports from subrecipient
► Project
Performance
 Technical Reports
 Project Deliverables
► Financial
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Final Invoice
Refunds, Rebates, Credits Form (if necessary)
Subcontractor’s Release Form
Verify Fulfillment of Cost Sharing Requirements
Disallowances or disputed costs
► Fulfilled
Obligations
 Patent
 Property Reports
 SB/MBE/WBE reports
 Review reports to make sure they are acceptable
Subaward Monitoring at Closeout
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Verify fulfillment of any cost-sharing requirements
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Verify receipt of invoice marked “Final”
Obtain signed Refunds, Rebates, Credits Form (if
necessary)
Verify clear understanding about record retention
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Audit subaward (if necessary)
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Verify Subrecipient is not debarred or suspended
Verify that Subrecipient has filed an audit report (or
equivalent) through subaward end date
Adjust Pass-through entity’s records if necessary to reflect
changes in subaward costs
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What are your Institutions doing?
Resources
► OMB
Circulars:
http://www.whitehouse.gov/omb/circulars/index.html
► Federal
Demonstration Partnership:
http://thefdp.org/
► Harvester
Single Audit Clearinghouse:
http://harvester.census.gov/sac/
► Stanford
sample forms:
http:// ora.stanford.edu/ora/osr/osr_forms.asp
Questions?
Contact us!
Jeri Muñiz
Director, Sponsored Projects
University of California, Irvine
(949) 824-2897
[email protected]
Csilla M. Csaplár
Contract & Grant Officer
Stanford University
(650) 498-6877
[email protected]