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Policy on Subrecipient Monitoring for Grants, Contracts, and other Sponsored Projects

A. Purpose
This policy addresses VMRF’s requirement, in accordance with OMB Circular A-133: Audits of States, Local Governments, and Non-Profit Organizations, to monitor all subrecipients expending $500,000 or more in Federal awards during the subrecipient’s fiscal year where VMRF pass-through funds were expended. VMRF will follow the requirements of OMB Circular A-133, 2 CFR 230 Cost Principles for Non-Profit Organizations (Previously OMB A-122); 2 CFR 215 Uniform Administrative Requirements for Grants and Agreements with Institutions of Higher Education, Hospitals, and Other Non-Profit Organizations (Previously OMB A-110); and other applicable federal regulations with respect to subrecipient monitoring of federal awards.


Furthermore, OMB Circular A-133 establishes requirements for pass-through entities of federal funds as it relates to uniform audits and monitoring of subrecipients. It is therefore VMRF’s obligation to ensure that audit requirements of the circular be met. The responsibility for subrecipient monitoring is therefore shared between both VMRF and the PI, and monitoring guidelines are based on a level of risk associated with a particular subrecipient.

 

B. Background
As a prime recipient of external funds from federal and other sponsors, VMRF is committed to the responsibility of ensuring that programmatic and financial activities of its subrecipients are in accordance with laws, regulations, and provisions of the prime award. The responsibility of assuring subrecipient compliance is shared between VMRF administration and the Principal Investigator (PI) of the prime award. VMRF works jointly with the PI of the VMRF administered prime award to ensure that proper stewardship of funds and performance goals by subrecipients are administered and evaluated.


Although VMRF may assign the responsibility over a portion of the work awarded by an external funding agency, it is still responsible for the management of funds and to ensure that performance goals are met. In its role as steward of these funds, VMRF recognizes the importance of monitoring technical and financial activities related to subrecipient monitoring.

 

C. Definitions
Pass-through entity - OMB Circular A-133 defines a pass-through entity as “…a non-Federal entity that provides a Federal award to a subrecipient to carry out a Federal program.” When a Principal Investigator proposes a subrecipient or collaborator that will be performing work at their respective Institution, VMRF upon receipt of federal award becomes a pass-through entity for the funds to be issued to the subrecipient.


Subrecipient - A subrecipient is an entity that receives an award, via a subaward/subcontract agreement, from a pass-through entity for work to be performed at the subrecipient’s institution. 2 CFR 215 defines a subrecipient as “…the legal entity to which a subaward is made and which is accountable to the recipient for the use of the funds provided...”(§ 215.2 (gg)): OMB Circular A-133 as a “…non-federal agency that expends federal awards received from a pass-through entity to carry out a federal program…”

A subrecipient is able to make programmatic decisions, has performance measured against the federal program objectives, and uses the federal funds to meet its responsibility over a portion of the work as defined by the subaward agreement.

Subcontract/Subaward agreement - instrument used to document agreement between institutions when funds are provided for work to be conducted on a sponsored project. 


Subaward - funds are provided to the subrecipient by means of a subaward. OMB Circular A-133 defines a subaward as: “…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. The term includes financial assistance when provided by any legal agreement, even if the agreement is called a contract, but does not include procurement of goods and services nor does it include any form of assistance which is excluded from the definition of “award” in §215.2(e).” (§215.2(ff))


D. Roles in Subrecipient Monitoring


Principal Investigators (PIs) have the primary responsibility for monitoring subrecipients to ensure compliance with both prime and subaward terms and conditions and federal regulations.

  • The primary responsibility for management of federally funded projects is assigned to a Principal Investigator by the Federal Government when an award is issued.
  • A PI is responsible for monitoring the subrecipient’s technical and programmatic activities related to the subaward. This includes:
    • Providing justification of subawardee selection and costs associated with said subaward.
    • Review of technical and/or performance reports.
    • Ensuring that work being conducted by subrecipient is in line with the scope of work as outlined in the subaward agreement and that the goals of these are met and delivered in a timely manner.
    • Review and approval of subrecipient invoices. The review of invoices includes a review of expenditures to ensure that charges are allowable, reasonable, allocable, and within the appropriate period of performance.  

VMRF Administration will assist the Principal Investigators in fulfilling their subrecipient monitoring responsibilities by:

  • Determining risk level of subrecipient prior to issuance of subaward and ensuring that an appropriate monitoring plan is followed.
  • Ensuring that subrecipient is eligible to receive federal and state funds (debarment and suspension).
  • Monitoring subrecipient compliance with A-133 requirements and following up with subrecipient regarding any findings identified in A-133 report that affect the subaward.
  • Initially reviewing subrecipient invoices to ensure that they are within the parameters of the subaward budget and making initial inquiries to subrecipient where applicable.
  • Ensuring that PI reviews and approves subrecipient invoices in a timely manner.
  • Maintaining documentation over subrecipient monitoring activities and efforts.
  • Communicating and coordinating with subrecipient when programmatic progress and financial reports are due.

E. Additional Resources

Approved by the VMRF Board of Directors: September 30, 2010