The University must monitor the financial and programmatic activities of its subrecipients to facilitate the proper stewardship of federal awards and non-federal awards if applicable (generically 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 (see Procedures).

1. Pass-through Entity (PTE): 
   As a 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/department/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 for research and the Office of University Counsel 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 school/department/unit are responsible for:

   • Obtaining a completed University of Virginia Consortium Commitment form from subrecipients and routing it for proposal review or with new subaward requests as appropriate.
   • 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.
   • Monitoring each subaward throughout the period of performance and escalating concerns to the school/department/unit research administration and/or the Office of Sponsored Programs as appropriate.

   The school/department/unit 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 program to OSP.
   • Working with PIs and the appropriate schools/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/department/unit level as necessary.
   • Monitoring subrecipient performance and reporting material issues noted during the reviews to OSP.
   • 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 is treated as a contractor 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 managing school/department/unit, the risk assessment of the subrecipient organization and the project; and notifying the sponsor of such actions when required by sponsor policy.
   • 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.
   • Reporting under the Federal Funding 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 schools/departments/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 programs to the PI or to the University.
   • Debarment of the PI or University from receiving future sponsored programs.

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

   Direct questions about this policy to the Office of Sponsored Programs.