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Subrecipient Monitoring: Riding The Storm Out


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Subrecipient Monitoring: Riding The Storm Out

  1. 1. Subrecipient Monitoring: Riding The Storm Out Tom Egan, MIT OSP Bethanne Giehl University of Massachusetts Medical School
  2. 2. SUBRECIPIENT MONITORING <ul><li>What is a subrecipient </li></ul><ul><li>OMB Compliance Requirements </li></ul><ul><li>Subrecipient Monitoring Classes </li></ul><ul><li>Subrecipient Monitoring Approaches </li></ul><ul><li>A-133 Audit Report Review </li></ul><ul><li>Subrecipient Monitoring Financial </li></ul><ul><li>Subrecipient Monitoring Technical </li></ul>
  3. 3. DEFINITION OF SUBRECIPIENT <ul><li>Financial assistance, or procurement, or contract made by a recipient to an eligible subrecipient </li></ul><ul><ul><li>Includes any financial assistance when provided by legal agreement, even if the agreement is called a contract </li></ul></ul><ul><ul><li>Does not include the purchase of goods and services </li></ul></ul>
  4. 4. DEFINITION OF SUBRECIPIENT <ul><li>The legal entity to which a subaward is made and which is accountable to the recipient for the use of funds provided. </li></ul><ul><ul><li>See agency implementations of A-110 to determine what type of entity can be a subrecipient. </li></ul></ul><ul><li>Note guidance on distinguishing between subrecipient and a vendor. </li></ul>
  5. 5. SUBRECIPIENT AGREEMENTS <ul><li>Funding from a prime recipient to a subrecipient to carry out specific program activities. </li></ul><ul><ul><li>May be termed a subgrant from an assistance award </li></ul></ul><ul><ul><li>May be termed a subcontract from a procurement award </li></ul></ul><ul><ul><li>The term “subrecipient” and “subawardee” are used interchangeably. </li></ul></ul>
  6. 6. SUBRECIPIENT MONITORING <ul><li>OMB Compliance Requirements: </li></ul><ul><li>Attachment M Subrecipient Monitoring </li></ul><ul><li>The March 2004 Compliance Supplement was revised to clarify OMB’s expectations related to subrecipient monitoring . </li></ul><ul><li>Annual request for subrecipient’s A-133 report is not sufficient. </li></ul><ul><li>On-going review and oversight are expected and may include: </li></ul><ul><li>-Reviewing financial and performance reports </li></ul><ul><li>-Performing site visits to review information and observe operations </li></ul><ul><li>-Regular contact and appropriate inquires </li></ul>
  7. 7. Subrecipient Monitoring: Classes <ul><li>Four “Classes” of Subrecipients </li></ul><ul><li>Not-for-profits with Federal expenditures in excess of $500,000 </li></ul><ul><li>Not-for-profits with Federal expenditures less than $500,000 </li></ul><ul><li>Non US-based entities </li></ul><ul><li>For-profit entities </li></ul>
  8. 8. Subrecipient Monitoring: Approaches <ul><li>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 </li></ul><ul><li>“ Monitoring activities may take various forms …” </li></ul><ul><li>Risk-Based Approach </li></ul>
  9. 9. Subrecipient Monitoring: Not-for-profits > $500,000 <ul><li>Well defined in OMB Circular A-133 </li></ul><ul><li>Review of the entity’s A-133 Audit </li></ul><ul><ul><li>Options – Web, Report, confirmation </li></ul></ul><ul><ul><li>Look for items that affect subrecipients </li></ul></ul><ul><ul><li>Significant items not directly affecting subrecipients should be investigated </li></ul></ul><ul><ul><li>When identified, issues should be resolved in a timely manner </li></ul></ul>
  10. 10. Subrecipient Monitoring: Not-for-profits < $500,000 <ul><li>Entities receiving less than $500,000 in total Federal monies are not required to receive an A-133 audit </li></ul><ul><ul><li>Prime recipient should require the subrecipient to confirm in writing that they did not receive over $500,000 </li></ul></ul><ul><ul><li>May be done with a confirmation </li></ul></ul>
  11. 11. Subrecipient Monitoring: Non-US based & For-Profits <ul><li>Prime should perform a risk assessment before award is granted </li></ul><ul><ul><li>Key policies governing internal controls should be examined </li></ul></ul><ul><ul><li>Visit to the subrecipients place of work to assess control environment </li></ul></ul><ul><ul><li>Other audits and reporting </li></ul></ul><ul><ul><li>Development of a plan to monitor </li></ul></ul><ul><ul><li>Remember – this is based upon Risk </li></ul></ul>
  12. 12. Subrecipient Monitoring: A-133 Audit Report Review <ul><li>Research and review results of subrecipient’s 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: </li></ul><ul><ul><li>Receives an unqualified opinion on the financial statements </li></ul></ul><ul><ul><li>Receives an unqualified opinion on internal controls </li></ul></ul><ul><ul><li>Has no material weaknesses reported </li></ul></ul><ul><ul><li>Has no reportable conditions related to Federal awards </li></ul></ul>
  14. 14. Subrecipient Monitoring: A-133 Audit Report Review
  15. 15. Subrecipient Monitoring : A-133 Audit Report Review
  16. 16. Subrecipient Monitoring: A-133 Audit Report Review <ul><li>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. </li></ul>
  17. 17. Subrecipient Monitoring: A-133 Audit Report Review MIT’s response to subrecipient’s audit status query
  18. 18. Subrecipient Monitoring: A-133 Audit Report Review <ul><li> For the subrecipients that are not subject to an OMB circular A-133 audit, employ the most cost-effective method of monitoring. </li></ul>
  19. 19. Subrecipient Monitoring : A-133 Audit Report Review MIT’s request for more detailed information regarding the subrecipient’s audit findings and/or reportable conditions
  20. 20. Subrecipient Monitoring: A-133 Audit Report Review <ul><li>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. </li></ul>
  21. 21. Subrecipient Monitoring: A-133 Audit Report Review <ul><li>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. </li></ul>
  22. 22. Subrecipient Monitoring: FINANCIAL <ul><li>Track subrecipient allocations separately </li></ul><ul><li>Process for review and approval of invoices </li></ul><ul><ul><li>PI for programmatic </li></ul></ul><ul><ul><li>OSP for administrative/financial </li></ul></ul><ul><li>Reimbursement for disallowances </li></ul><ul><li>Verify cost sharing commitments </li></ul>
  23. 23. Subrecipient Monitoring: TECHNICAL <ul><li>Scientific progress </li></ul><ul><li>Invention reports </li></ul><ul><li>Timely submission of deliverables </li></ul><ul><li>Final reports </li></ul>
  24. 24. REFERENCE DOCUMENTS <ul><li>OMB Circular A-21 </li></ul><ul><li>OMB Circular A-110 </li></ul><ul><li>OMB Circular A-133 </li></ul><ul><li>FDP Subrecipient Template </li></ul><ul><li>Catalog of Federal Domestic Assistance (CFDA) </li></ul>
  26. 26. WEB SITES <ul><li>FDP Homepage: </li></ul><ul><li>FDP Subaward Demonstration Project: </li></ul><ul><li>FDP Subaward Agreement Forms </li></ul><ul><li>Lists of Parties Excluded from Federal </li></ul><ul><li>Procurement & Nonprocurement Programs </li></ul><ul><li> </li></ul><ul><li>Federal Audit Clearinghouse: </li></ul><ul><li>MIT Office of Sponsored Programs: </li></ul>