Subrecipient Monitoring

Procedures for Issuing and Monitoring Subawards and Subcontracts

These procedures are issued in accordance with Rice Policy 307, Issuing and Monitoring Subawards and Subcontracts and apply to all subrecipients funded from sponsored projects, including those funded from both federal and non-federal sources.

Background

It is the policy of Rice University to have processes in place that provide reasonable assurance that subrecipients satisfactorily meet the programmatic and financial activities involved in the subaward or subcontract in order to ensure that:

  • Programmatic goals are achieved;
  • Project costs incurred by subrecipients are reasonable, allowable and allocable and within budget guidelines; and
  • Work is conducted in compliance with laws, regulations and terms of the award.

The frequency, type and degree of monitoring activities which monitor the subrecipient’s compliance with the subaward or subcontract will be based on ongoing risk assessments performed during the life of the subcontract, and adjustments will be made if there are changes in status.

The procedures and roles and responsibilities discussed below ensure that the university carries out the activities associated with the lifecycle of a subaward. These include:

  • Proposing a subaward
  • Assessing risk associated with a subaward
  • Issuing or amending a subaward
  • Monitoring subawards
  • Processing invoices
  • Closing out subawards

Definitions

A sponsored project is an externally funded activity subject to terms and conditions of the awarding organization. Funding is normally received from an external sponsor in the form of a grant, contract or cooperative agreement.

A subcontract (also called a subaward) is a formal written agreement made between Rice University and a subrecipient that includes the statement of work (SOW), budget, and laws and regulations to which the subrecipient must adhere. Rice issues subcontracts using the appropriate contractual terms and conditions to address deliverables, risk, financial and payment considerations and required flow-down provisions from the sponsor. For the purposes of this policy and related procedures, subcontracts do not include engaging vendors providing services under professional services agreements or vendors providing standard goods or services, which are addressed in Rice Purchasing Policy No. 814 and related procedures.

A subrecipient is a non-Rice entity that expends funds received from Rice to carry out a portion of Rice’s programmatic effort under a sponsored project. As such, the entity is a collaborator in carrying out the research program of the sponsored project. The subrecipient may be another educational institution, an independent laboratory, a foundation, a for-profit corporation, a non-profit corporation or other organization, and may be a domestic or foreign entity. Subrecipients are typically not individuals. The federal government’s definition of a subrecipient is addressed in Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (§§ 200.93; 200.500-200.521) ).

FFATA

As of October 1, 2010, all Federal grants of $30,000 and over are subject to the Federal Funding Accountability and Transparency Act (FFATA) subaward reporting requirements. Prime awardees are required to enter the subrecipient information in the FFATA Sub-Award Reporting System -FSRS (https://www.fsrs.gov/). Subrecipients must maintain an active registration in the System for Award Management (https://www.sam.gov/SAM/) in order to received Federal funding. If a subaward is required after a prime contract is executed and no FFATA information has been obtained by Pre-Award, the contracting staff will obtain this information when a subaward is presented (if required). The subaward will not be fully executed until the FFATA information is obtained. The FFATA report must be submitted by the end of the month following the mont of the full executed of the subaward amendment. It is the duty of OSP staff to enter, submit and update the required FFATA information in the FSRS website.

Distinguishing Between a Subaward and Vendor Relationship

While Uniform Guidance does not require Rice to monitor the activities of vendors, it does require the university to monitor the activities of subrecipients as necessary to ensure reasonable compliance with the terms and conditions of the federal award. Therefore, correct determination of the proper classification ensures that Rice complies with the sponsor’s subrecipient monitoring requirements as well as the Rice policy and procedures related to subrecipients. Additionally, determining the appropriate budget classification during the proposal stage is essential to calculating the correct budget for facilities and administrative (F&A) costs. For most proposals, F&A is applied to only the first $25,000 of each subaward, while 100% of vendor payments for non-capital costs are subject to the full F&A rate.

The table in the appendix summarizes the key characteristics that should be considered when determining if expenditures should be considered subrecipient payments or vendor payments or personal services payments.