Transcript GRANTS MANAGEMENT ORIENTATION

Subcontract Management
Objectives
• Understand the distinction between a subaward
and a purchased service
• Know your monitoring and compliance
responsibilities
• Be able to create and amend a purchase
requisition for a subaward agreement
• Understand the process of F&A recovery when
subawards are involved
Definitions
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Award
Subaward
Prime Recipient
Subrecipient
Statement/Scope of Work
Federal Award
• Financial assistance that provides support or
stimulation to accomplish a public purpose.
• Awards include grants and other agreements in
the form of money or property in lieu of
money, by the Federal Government to an eligible
recipient.
• It does not include procurement contracts, used
to buy goods or services from vendors.
Subaward
• Subaward means an award of financial assistance
in the form of money, or property in lieu of
money, made under an award by a recipient to
an eligible subrecipient or by a subrecipient to a
lower tier subrecipient.
• It does not include procurement contracts, used
to buy goods or services from vendors.
Prime Recipient
• The prime recipient is the entity that is the direct
recipient of the sponsor’s funds and in this
capacity assumes a number of responsibilities,
including management of subawards.
Subrecipient
• Subrecipient means the legal entity to which a
subaward is made and which is accountable to
the recipient for the use of the funds provided.
Statement of Work
• The statement of work outlines the procedures
and methods the subrecipient will employ in
accordance with the goals of the project
proposed by the prime recipient.
Purchased Service vs. Subaward
Agreement
• Usually the distinction between the two is clear
– but when it’s not…look out
• It is important to understand the relationship in
order to use the proper “mechanism”
• Statutory requirements for procurement of
services is quite different from those of
subawards
Definitions of Purchased Service
• US Code, Title 31, Subtitle V, Chapter 63,
Section 6303, Using procurement Contracts:
– The principle purpose of the instrument is to
acquire (by purchase, lease, or barter) property or
services for the direct benefit or use of the US
Government…
Definitions of Purchased Service
• OMB Circular A-133, Section ___210:
(c) Payment for goods and services. Characteristic indicative
of a payment for goods and services received by a vendor
are when the organization:
(1) Provides the goods and services within normal business
operations;
(2) Provides similar goods or services to many purchasers;
(3) Operates in a competitive environment;
(4) Provides goods or services that are ancillary to the
operation of the Federal program; and,
(5) Is not subject to compliance requirements of the
Federal Program.
Definitions of a Subaward
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US Code, Title 31, Subtitle V, Chapter 63, Section
6304, Using Grant Agreements:
(1) The principle purpose of the relationship is to transfer a
thing of value to the State, local government, or other
recipient to carry out a public purpose of support or
stimulation authorized by a law of the US instead of
acquiring (by purchase, lease, or barter) property or
services for the direct benefit of the US Government;
and,
(2) Substantive involvement is not expected between the
executive agency and the State, local government, or other
recipient when carrying out the activity contemplated in
the agreement.
Definitions of a Subaward
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OMB Circular A-133, Section ___210:
(b) Federal award. Characteristics indicative of a Federal
award received by a subrecipient are when the
organization:
(1) Determines who is eligible to receive what Federal financial
assistance;
(2) Has its performance measured against whether the objectives of
the Federal program are met;
(3) Has responsibility for programmatic decision-making;
(4) Has responsibility for adherence to applicable Federal program
compliance requirements; and,
(5) Uses the Federal funds to carry out a program of the
organization as compared to providing goods or services for a
program of the pass-through entity.
Tips for Determining the Best
Mechanism
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Where a preponderance of the funding is being spent
Avoid trying to circumvent the charging of F&A
Focus on the nature of the relationship
Can you defend it to the auditors, prime sponsors, the
news media, and the general public
• Beware of consultants – they will not be subawards
Subaward Process - Proposal
Phase
• For NIH grant applications or other programs using
NIH forms - ORSP will need a signed application face
page and checklist from the organization to which we
are subcontracting.
• For non-NIH applications – ORSP will need a signed
“letter of intent to form a subcontract agreement”
• Scope of work is also helpful.
Subaward Process - Proposal
Phase
• New NIH budget pages
• Be careful when calculating F&A costs when
subcontracts are involved
• The subrecipient will request their full F&A rate from
the prime recipient
• Consequently, the amount up to $25,000 that is passed
through is charged F&A by both the prime recipient
and the subrecipient
Subaward Process
• ORSP will need budget, scope of work, and contact
information.
• Mailed to subcontract organization along with
disclosure forms
• When returned, PI signs, Tim Atkinson signs
• ORSP sends out an “ORSP Cover Page” to
department.
• Purchase Order sent to ORSP who sends to
subcontractor.
• Please be patient!
Subcontract Amendments
• ORSP will need budget for new year, carryover
amount (if any), changes to scope of work (if
any).
• Same process as original subcontract, just fewer
pages.
Responsibilities
• ORSP is responsible for the development of the
subaward and for inclusion of all applicable OMB
requirements, disclosures, and for obtaining the proper
signatures on the subaward
• PI/Department Administrators are responsible for
monitoring periodic progress reports and invoices from
the subrecipients for compliance with the terms of the
agreement.
Responsibilities
• Grants Accounting is responsible for monitoring
the subrecipient’s compliance with audit,
financial and equipment reporting requirements.
– Desk Audits
– Financial Reporting
– A-133 Audit results
Basis for F&A
• F&A costs shall be distributed to applicable
sponsored agreements …. …consisting of all
salaries and wages, fringe benefits, materials
and supplies, services, travel, and subawards
up to the first $25,000 of each
subaward…
How to Calculate F&A for
Subawards
• What would the indirect cost recovery be for
each year of the grant under the following
conditions, presuming a 10% indirect cost rate
with three subawards?
F&A Calculation
Year 1
Year 2
Year 3
Contract Invoiced
Contract
Invoice
Contract Invoice
1
10,000
10,000
10,000
10,000
10,000
5,000
2
25,000
15,000
25,000
25,000
25,000
35,000
3
30,000
10,000
30,000
30,000
30,000
35,000
F&A Calculation
Year 1
Year 2
Contract Invoiced
Contract
Year 3
Invoice
Contract Invoice
1
10,000
10,000
10,000
10,000
10,000
5,000
All
2
25,000
15,000
25,000
25,000
25,000
35,000
All
3
30,000
10,000
30,000
30,000
30,000
35,000
All
35,000
3,500
F&A Calculation
Year 1
Year 2
Contract Invoiced
Contract
Year 3
Invoice
Contract Invoice
1
10,000
10,000
10,000
10,000
10,000
5,000
All
2
25,000
15,000
25,000
25,000
25,000
35,000
10,000
3
30,000
10,000
30,000
30,000
30,000
35,000
15,000
35,000
35,000
3,500
3,500
F&A Calculation
Year 1
Year 2
Contract Invoiced
Contract
Year 3
Invoice
Contract Invoice
1
10,000
10,000
10,000
10,000
10,000
5,000
All
2
25,000
15,000
25,000
25,000
25,000
35,000
none
3
30,000
10,000
30,000
30,000
30,000
35,000
none
35,000
35,000
5,000
3,500
3,500
500
Questions?