RES-010: Subrecipient Monitoring on Sponsored Programs

Date: 11/17/2020 Status: Final
Last Revised:
Policy Type: University
Oversight Executive: Vice President for Research
Applies To:

Academic Division and the College at Wise.

Reason for Policy:

The University is committed to complying with the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (2 CFR 200), which mandate that the University, as the Pass-through Entity of federal funds, be held responsible for issuance of Subawards and monitoring Subrecipient’s technical and financial performance.

For non-federal awards, the University may be required by the Sponsor to provide evidence of due diligence in reviewing the ability of a Subrecipient to properly meet the objectives of the Subaward and account for the Sponsor’s funds.

This policy establishes the University’s requirements for issuing Subawards and monitoring Subrecipient performance.

Definition of Terms in Statement:
  • Federal Award:

    A grant, contract, or cooperative agreement received directly from a Federal agency as well as federally funded sub-awards received by the University from other organizations.

    • Contract:

      Any agreement between the University and one or more parties for performing, or refraining from performing, some specified act(s) in exchange for a valuable benefit known legally as “consideration.”

  • Non-Federal Award:

    A Sponsored Award of non-federal funds, as well as non-federally funded Subawards received by the University from other organizations.

  • Pass-through Entity (PTE):

    A non-federal entity (such as the University) that receives a Sponsored Award from which it subsequently issues a Subaward. The University acts as a PTE each time it issues a Subaward.

  • Principal Investigator (PI):

    The individual(s) designated by the applicant organization/recipient to have the appropriate level of authority and responsibility to direct the project or program to be supported by the award. The applicant organization may designate multiple individuals as program directors/principal investigators (PD/PIs) who share the authority and responsibility for leading and directing the project, intellectually and logistically.

  • Risk Assessment:

    The overall process or method whereby hazards and risk factors that have the potential to cause harm are identified and the risk associated with those hazards are analyzed and evaluated.

  • Sponsor:

    An individual or group that provides support financially or through the provision of products or services for an event, activity, person or organization.

  • Sponsored Program:

    Any externally funded research, public service, or scholarly activity (including hosting or attending conferences) at the University that has a defined scope of work often including a set of specific programmatic objectives and/or deliverables, and line-item-based budget, providing the basis for sponsor expectations and awardee accountability (i.e., a reciprocal transfer of something of value). Sponsored programs are funded through agreements that usually include terms and conditions for the disposition of tangible properties and outcomes (e.g., equipment, records, specified technical reports, theses, or dissertations) or intangible properties and outcomes (e.g., rights in data, copyrights, and inventions). Note: The terms sponsored program, sponsored project, and/or sponsored activity are often used interchangeably.

  • Subaward:

    An enforceable agreement, issued under a Federal Award or a Non-Federal Award between a Pass-through Entity and a Subrecipient for the performance of a substantive portion of the program. [Note: These terms do NOT apply to the procurement of goods or services from a Vendor.]

  • Subrecipient:

    A non-Federal entity that receives a Subaward from a Pass-through Entity to carry out part of a federal or non-federal program as opposed to providing goods and services but does not include an individual that is a beneficiary of such a program. Subrecipients have responsibility for programmatic decision-making and for adherence to applicable program compliance responsibilities.

  • Uniform Guidance:

    A publication from the federal Office of Management and Budget entitled “Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards” (2 CFR 200).

  • Unit:

    As used throughout this Policy, encompasses schools, departments, and other components of the University.

  • Vendor:

    Any entity that supplies goods or services.

Policy Statement:

The University must monitor the financial and programmatic activities of its Subrecipients to facilitate the proper stewardship of Federal Awards and Non-Federal Awards as applicable (referred to as Sponsor funds). As part of this commitment, when issuing Sponsor funds to collaborating institutions, the University must implement measures for monitoring the management of those funds and reviewing that the work being performed is in accordance with applicable regulations and Sponsor policies.

This policy applies to all Subawards issued under Sponsored Programs awarded to the University without regard to the primary source of funding. University faculty and staff must adhere to the requirements of this policy and its procedure.

  1. Pass-through Entity:
    As a Pass-through Entity (PTE), the University must (1) evaluate each Subrecipient's and project’s risk in order to determine the appropriate Subaward terms and monitoring levels; (2) monitor the activities of Subrecipient organizations for compliance with applicable regulations and terms of the Subaward; and (3) verify that Subrecipients are audited as required by the Uniform Guidance.

  2. Policy Exceptions:
    In rare cases, there may be certain compelling circumstances where exceptions to this policy may be warranted. All requests for an exception to this policy must be in writing, include a detailed justification, signed by the School/Unit Research Administration representative, and submitted in advance for evaluation by the Executive Director of the Office of Sponsored Programs (OSP).

    All exception requests are reviewed on a case-by-case basis. After considering the request, the Executive Director of OSP determines whether to grant or deny the exception and, if granted, the exception will be time limited. The Executive Director may consult with the Vice President of Research and the University Counsel’s office before a decision is made. The Vice President for Research will be notified of exceptions that are approved.

  3. Responsibilities:
    Subrecipient monitoring responsibilities are shared among individuals and groups such that:

    The Principal Investigator (PI) and Department/Unit are responsible for:

    • Completing and routing the University of Virginia Consortium Commitment form;
    • Confirming the statement of work and budget, and reviewing any non-standard terms and conditions of the Subaward during the Subaward agreement negotiation process;
    • Monitoring programmatic progress and the ability of the Subrecipient to meet objectives of the Subaward;
    • Funding the Subaward for the correct amount for the applicable scope of work and period of performance;
    • Reviewing and certifying Subrecipient invoices after confirming all deliverables are received; and
    • Monitoring each Subaward throughout the period of performance and escalating concerns to the school research administration and/or the Office of Sponsored Programs as appropriate.

    The School is responsible for:

    • Facilitating information-gathering of proposed Subrecipients at the proposal stage;
    • Facilitating the provision of appropriate documentation regarding statement of work and budgets in line with the Sponsored Award to OSP;
    • Working with PIs and departments/units to resolve issues on Subawards as they arise and escalate to OSP if issues continue or cannot be resolved;
    • Coordinating Subaward monitoring at the school level;
    • Monitoring Subrecipient performance and reporting material issues noted during the reviews to OSP; and
    • Preparing, signing, and sending policy exception requests to OSP.

    The Office of Sponsored Programs is responsible for:

    • Documenting the determination of whether a third party should be treated as a Vendor or Subrecipient;
    • Completing risk assessments on new Subrecipient organizations;
    • For all Subawards on a Federal Award:
      • Reviewing the subrecipient’s audit report on a regular basis, based on frequency stipulated by the Sponsor and taking appropriate actions;
      • Documenting reasons for any actions taken as a result of the annual review;
    • Maintaining the Subrecipient Risk Assessment results and incorporating ratings assigned on organizational and project risk assessments;
    • Incorporating additional terms and/or stringent documentation requirements in a Subaward when needed based on information from the PI, the department/local level managing unit, and the risk assessment of the Subrecipient organization and the project;
    • Reviewing and acting upon policy exception requests;
    • Notifying the Vice President for Research of policy exception request approvals;
    • Following up on any Subrecipient audit finding by performing site or desk reviews; and
    • Reporting under the Federal Funding Accountability and Transparency Act.
  4. Compliance with Policy:
    Failure to comply with the requirements of this policy may result in disciplinary action up to and including termination or expulsion in accordance with relevant University policies. In addition, failure to comply with the requirements of this policy and its related procedures may result in penalties levied against the departments, schools, units, and/or the University by a Sponsor.

    Specifically, noncompliance with this policy may result in one or more of the following:

    • The Sponsor disallowing Subaward costs.
    • Suspension or termination of the Sponsored Award.
    • Withholding other Sponsored Awards to the Principal Investigator (PI) or to the University.
    • Debarment of the PI or University from receiving future Sponsored Awards.

    Failure to adequately monitor the compliance of Subrecipients could result in reputational damage to the University and jeopardize current and future funding.

    Questions about this policy should be directed to the Office of Sponsored Programs.

Procedures:

OSP - Outgoing Subawards and Subrecipient Monitoring

Related Information:

Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (2 CFR Part 200) for Sponsored Awards subject to that regulation
Federal Acquisition Regulation (48 CFR)
University’s applicable Facilities & Administration Negotiation Agreements with the federal government.

Major Category: Research Administration
Category Cross Reference: Finance and Business Operations
Next Scheduled Review: 11/17/2023
Approved by, Date: Executive Vice President & Chief Operating Officer, 11/17/2020
Revision History: This is the first version of this policy.