McNeese State University is responsible for the programmatic and financial monitoring of its sponsored research award subrecipients. OMB Circular A-110 A.2 (gg) 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."
The following is provided to assist responsible faculty and staff in ensuring that subrecipients conduct their portions of research projects in compliance with laws, regulations and terms and conditions of awards and subawards and that project costs incurred by subrecipients are reasonable and allowable.
Roles and Responsibilities:
- It is the PI's responsibility to closely monitor the progress and performance of subrecipients to ensure compliance with federal regulations and both prime and subrecipient award terms and conditions.
- It is Administrative Accounting's responsibility for reviewing invoices from subrecipients and questioning expenditures if necessary and for monitoring and maintaining related financial reports.
- The Research Services and Sponsored Programs Office (RSSP) and the Vice President of Academic Affairs and the Vice President of Business Affairs have shared responsibility for ensuring that the University's subrecipient monitoring is compliant with federal and other applicable regulations and are consistent with sound business practices. RSSP will assist faculty in interpreting applicable regulations and subrecipient award terms and conditions and executing these guidelines. RSSP is also responsible for maintaining documentation of monitoring efforts.
- The University shall perform the following stewardship activities with regard to subrecipients of its sponsored awards:
- Advise subrecipients of flow down provisions imposed on them by federal laws, regulations, and the provisions of contracts or grant agreements as well as any supplemental requirements imposed by the University dependent on level of risk as determined by the University.
- The University shall provide the best information available to describe a federal award to each subrecipient including the Catalog of Federal Domestic Assistance (CFDA) title and number, award name and number, award year, if the award is R&D, and name of federal agency.
- Monitor the activities of subrecipients to ensure that funding provided to the subrecipient is used for purposes authorized in the subaward agreement in compliance with laws and regulations, and that performance objectives in the agreement are achieved.
- Ensure that subrecipients expending $500,000 (for fiscal years ending after December 31, 2003) or more in federal awards during the subrecipient's fiscal year have met audit requirements.
- If the subrecipient has audit findings, the University will review the findings and review the subrecipients corrective action plan to ensure appropriate and timely steps are taken to correct any problems.
- Determine whether subrecipient audits necessitate adjustment of the University's own records.
- Require each subrecipient to permit the University and auditors to have access to the records and financial statements as necessary.
In addition to the general elements of compliance noted above, there may be additional sponsor- or program-specific requirements that mandate collecting and documenting other assurances (e.g. on lab animals, human subjects, biohazards, etc.) during the course of a project.
Pre-award Subrecipient Risk Assessment:
The following factors will be used to determine the level of risk a particular subrecipient presents with regards to the threat of improper stewardship.
- Award complexity, extensiveness of the governing regulations;
- Percentage passed through: (The larger the percentage of program awards passed through, the greater the need for subrecipient monitoring);
- Subrecipient award size. Large awards (annual budgets >$500K) would receive substantial and frequent review and monitoring; mid-sized awards (annual budget $100K - $500K) would receive proportionately less substantial and less frequent monitoring; smaller awards (<$100K) would receive general review with the least frequent oversight;
- Prior experience with the subrecipient:
- A new subrecipient
- An inexperienced subrecipient
- Pre-award negotiation indicators
- Financial/operational reporting accuracy and timeliness
- Response to requests
- Having new personnel
- New or substantially changed systems
- Whether the potential subrecipient is subject to an A-133 audit or other federal financial review;
- Level of external oversight by auditors or sponsor agency.
- Evidence of effective financial controls within the subrecipient's systems and administrative operations through review of the organization's audit reports, management letter, or other acceptable documentation;
- Subrecipient location (remoteness from McNeese may mandate more oversight);
- Subrecipient organization type (for profit /not-for-profit/ small business, etc.)
The frequency and scope of monitoring procedures should be determined by the responsible PI, financial accounting, and the RSSP Office. Initial monitoring decisions will be made based on the above review criteria. Risk assessment status can be subject to change pending findings during routine monitoring procedures. If it is determined that a subrecipient mandates closer scrutiny, appropriate measures will be taken to ensure compliance with subagreement performance, financial terms and conditions, and with all applicable federal rules and regulations. Administrators at such subrecipient sites may be asked to complete questionnaires (to be filed at McNeese) documenting their internal controls and grants management procedures.
This policy follows the practices recommended by the "Sponsored Research Administration's Guide to Effective Strategies and Recommended Practices" as well as the "Guidelines & Procedures for Monitoring Subrecipients" policy outlined by Harvard University.