Subrecipient Monitoring: Riding The Storm Out

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Subrecipient MonitoringRiding The Storm Out

• Tom Egan, MIT OSP
• Bethanne Giehl
• University of Massachusetts
• Medical School

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SUBRECIPIENT MONITORING

• What is a subrecipient
• OMB Compliance Requirements
• Subrecipient Monitoring Classes
• Subrecipient Monitoring Approaches
• A-133 Audit Report Review
• Subrecipient Monitoring Financial
• Subrecipient Monitoring Technical

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DEFINITION OF SUBRECIPIENT

• Financial assistance, or procurement, or contract
  made by a recipient to an eligible subrecipient
• Includes any financial assistance when provided
  by legal agreement, even if the agreement is
  called a contract
• Does not include the purchase of goods and
  services

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DEFINITION OF SUBRECIPIENT

• The legal entity to which a subaward is made and
  which is accountable to the recipient for the use
  of funds provided.
• See agency implementations of A-110 to determine
  what type of entity can be a subrecipient.
• Note guidance on distinguishing between
  subrecipient and a vendor.

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SUBRECIPIENT AGREEMENTS

• Funding from a prime recipient to a subrecipient
  to carry out specific program activities.
• May be termed a subgrant from an assistance award
• May be termed a subcontract from a procurement
  award
• The term subrecipient and subawardee are used
  interchangeably.

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SUBRECIPIENT MONITORING

• OMB Compliance Requirements
• Attachment M Subrecipient Monitoring
• The March 2004 Compliance Supplement was revised
  to clarify OMBs expectations related to
  subrecipient monitoring.
• Annual request for subrecipients A-133 report is
  not sufficient.
• On-going review and oversight are expected and
  may include
• -Reviewing financial and performance
  reports
• -Performing site visits to review information
  and observe operations
• -Regular contact and appropriate inquires

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Subrecipient Monitoring Classes

• Four Classes of Subrecipients
• Not-for-profits with Federal expenditures in
  excess of 500,000
• Not-for-profits with Federal expenditures less
  than 500,000
• Non US-based entities
• For-profit entities

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Subrecipient Monitoring Approaches

• Factors such as the size of awards, percentage of
  the total program's funds awarded to
  subrecipients, and the complexity of the
  compliance requirements may influence the extent
  of monitoring procedures
• Monitoring activities may take various forms
• Risk-Based Approach

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Subrecipient MonitoringNot-for-profits gt
500,000

• Well defined in OMB Circular A-133
• Review of the entitys A-133 Audit
• Options Web, Report, confirmation
• Look for items that affect subrecipients
• Significant items not directly affecting
  subrecipients should be investigated
• When identified, issues should be resolved in a
  timely manner

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Subrecipient Monitoring Not-for-profits lt
500,000

• Entities receiving less than 500,000 in total
  Federal monies are not required to receive an
  A-133 audit
• Prime recipient should require the subrecipient
  to confirm in writing that they did not receive
  over 500,000
• May be done with a confirmation

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Subrecipient MonitoringNon-US based
For-Profits

• Prime should perform a risk assessment before
  award is granted
• Key policies governing internal controls should
  be examined
• Visit to the subrecipients place of work to
  assess control environment
• Other audits and reporting
• Development of a plan to monitor
• Remember this is based upon Risk

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Subrecipient MonitoringA-133 Audit Report Review

• Research and review results of subrecipients OMB
  Circular A-133 audit reported in the Federal
  Audit Clearinghouse. This is the primary
  monitoring step for the Research Administrator.
  Information presented within Federal Audit
  Clearinghouse is relied upon as sufficient
  evidence of compliance with the provisions of OMB
  Circular A-133 if the organization
• Receives an unqualified opinion on the financial
  statements
• Receives an unqualified opinion on internal
  controls
• Has no material weaknesses reported
• Has no reportable conditions related to Federal
  awards

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FEDERAL AUDIT CLEARINGHOUSE
http//harvester.census.gov/sac/dissem/accessoptio
ns.html?submitRetrieveRecords
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Subrecipient Monitoring A-133 Audit Report Review
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Subrecipient Monitoring A-133 Audit Report Review
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Subrecipient MonitoringA-133 Audit Report Review

• For subrecipients not listed in the Federal
  Audit Clearinghouse, the Research Administrator
  should make inquiries by forwarding a
  confirmation request letter to determine whether
  an audit was required and, if so, the status of
  the audit. Retain copy of inquires and complete
  2nd and subsequent inquiries as needed to acquire
  audit information.

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Subrecipient Monitoring A-133 Audit Report
Review
MITs response to subrecipients audit status
query
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Subrecipient MonitoringA-133 Audit Report Review

• For the subrecipients that are not subject to
  an OMB circular A-133 audit, employ the most
  cost-effective method of monitoring.

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Subrecipient Monitoring A-133 Audit Report
Review
MITs request for more detailed information
regarding the subrecipients audit findings
and/or reportable conditions
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Subrecipient MonitoringA-133 Audit Report Review

• For subrecipients that are identified with a
  reportable condition, gain an understanding of
  relevant findings or questioned costs stated in
  the Federal Audit Clearinghouse and/or request a
  copy of the subrecipients A-133 report with all
  appendices.

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Subrecipient MonitoringA-133 Audit Report Review

• Upon receipt of applicable information, evaluate
  for materiality, any findings or questioned costs
  noted during the above procedures. Consider the
  impact of any corrective action plan as well as
  other related actions undertaken by subrecipient
  management. Notify the proper Institute
  administrative departments of those findings and
  questioned costs determined to have a material
  impact on Federal awards.

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Subrecipient Monitoring FINANCIAL

• Track subrecipient allocations separately
• Process for review and approval of invoices
• PI for programmatic
• OSP for administrative/financial
• Reimbursement for disallowances
• Verify cost sharing commitments

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Subrecipient Monitoring TECHNICAL

• Scientific progress
• Invention reports
• Timely submission of deliverables
• Final reports

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REFERENCE DOCUMENTS

• OMB Circular A-21
• OMB Circular A-110
• OMB Circular A-133
• FDP Subrecipient Template
• Catalog of Federal Domestic Assistance (CFDA)

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QUESTIONS AND COMMENTS
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WEB SITES

• FDP Homepage http//TheFDP.org/
• FDP Subaward Demonstration Project
• FDP Subaward Agreement Forms
• Lists of Parties Excluded from Federal
• Procurement Nonprocurement Programs
• http//www.arnet.gov/epls/
• Federal Audit Clearinghouse http//www.harvester.
  census.gov/sac/
• MIT Office of Sponsored Programs
  http//web.mit.edu/osp/www