Subrecipient Monitoring Policy

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University Policy Number 4009

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I. SCOPE

As a recipient of federal sponsored awards, George Mason University (“Mason”) must comply with the guidelines outlined in the OMB Uniform Guidance.  This policy applies to all subawards issued under sponsored projects awarded to Mason without regard to the primary source of funding.

This policy does not apply to consultant agreements or procurement of services from vendors.  Policies and procedures regarding those agreements are covered under Mason University Policy 2106.

II. POLICY STATEMENT

Mason is responsible for financial and programmatic monitoring of sponsored project funds awarded to Mason that are subcontracted to another institution or organization (subrecipient).  To provide the monitoring required by federal regulations and to ensure good stewardship of sponsored projects, Mason will use reporting, site visits, regular contact, or other means to provide reasonable assurance that the subrecipient administers awards in compliance with laws, regulations, and the provisions of contracts or grant agreements and that performance goals are achieved.

This policy applies to all subawards issued under all sponsored projects awarded to Mason.  The following are the objectives of the policy:

  • Advises and provides to subrecipients copies of federal laws or regulations, terms and conditions of the prime award or agreement, and Mason requirements that apply to the subaward or subcontract.
  • Provides subrecipients with information regarding the prime award including Catalog of Federal Domestic Assistance number (CFDA), title, award name and number, award dates, and funding agency, as required by the OMB Uniform Guidance.
  • Monitors costs and activities of subrecipients to ensure expenditures charged to Mason are consistent with the budget and scope of work of the subaward or subcontract.  Ensures that the performance goals set forth in the scope of work are being met in a timely manner.
  • Conducts an annual risk assessment of all active subcontracts or subawards to determine which subrecipients require closer scrutiny.
  • Ensures that subrecipients expending $500,000 or more in federal awards during the subrecipient’s fiscal year have met the OMB Uniform Guidance audit requirements for that fiscal year.
  • Issues management decisions on audit findings within six months after receipt of the subrecipient’s audit report and ensures that the subrecipient takes appropriate and timely corrective action.
  • Considers whether subrecipient audit findings necessitate adjustment of Mason’s records, such as budget modifications or reallocation of resources, a demand for repayment from the subrecipient, or other remedial measures.
  • Requires each subrecipient to permit the sponsor and/or Mason and its auditors to have access to the subrecipient’s pertinent records and financial statements, as necessary.
  • Requires each subrecipient to provide information as required under the Federal Funding Accountability and Transparency Act (FFATA) so that Mason can meet its reporting obligations.

III. DEFINITIONS

Award
An award is financial assistance in the form of a grant or contract with a defined scope of work that provides support or stimulation to accomplish a public purpose.

Pass-Through Entity
A pass-through entity is a non-federal entity that provides an award of federal funds to a subrecipient to carry out the programmatic activities of a sponsored project.

Subaward
A subaward is an award of financial assistance from a prime awardee to a qualified organization, for the performance of a substantive portion of the programmatic effort under a sponsored project.

Subrecipient
A subrecipient is legal entity to which a subaward is made and which is accountable to the recipient for the use of the funds provided to carry out a portion of the programmatic effort under a sponsored project.  It may include institutions of higher education, for-profit corporations and foreign or international organizations.  Subrecipients should not be individuals.

Subrecipient Monitoring (PreAward, PostAward)
Subrecipient monitoring includes the oversight activities performed by a prime recipient that provide reasonable assurance that subawards made are being administered in compliance with applicable laws, regulations, and the provisions of the grant or contract agreement.

Vendor Agreement
Vendor Agreements cover services purchased that do not provide a substantive portion of the programmatic effort of the sponsored project.  Generally, the vendor provides the services commercially, operates in a competitive environment and retains no rights to intellectual property.

IV. RESPONSIBILITIES

Principal Investigator (PI)
The PI has responsibility for monitoring subrecipients, particularly the subrecipient’s technical and programmatic activities.  These activities should be performed in a timely manner throughout the duration of the subaward and be consistent with the proposed statement of work.  The PI should review technical reports and maintain regular contact with the subrecipient.  If necessary, the PI should perform site visits to review financial and programmatic records to ensure appropriate progress and compliance with subagreement terms and conditions.

The PI also is responsible for reviewing invoices submitted by the subrecipient.  The PI should verify that invoice amounts are consistent with technical progress and that costs are allowable according to federal, state, university and sponsor requirements.  The PI review should take place within 15 days of receipt and if any discrepancies are identified Accounts Payable should be contacted to hold payment.

Departmental Administrators
Departmental Administrators assist PIs in their subrecipient monitoring responsibilities.  The level of involvement may vary across Colleges/Schools/Institutes/Centers, but should be clearly defined at the local level.

Fiscal Services
Fiscal Services (Controller) is consulted in discussions regarding development of risk mitigation plans for high risk subrecipients.

Office of Sponsored Programs (OSP)
OSP is responsible for establishing a process for subrecipient monitoring that ensures compliance with federal, sponsor and university guidelines and regulations.  OSP staff reviews proposal submissions to assure subaward arrangements are appropriately budgeted in the prime award budget and the appropriate representations, certifications and assurances are in place.  Further, OSP shall obtain from the subrecipient all information required for FFATA compliance and shall file all necessary reports.

During the award stage, OSP staff performs a pre-review of all subcontract invoices to ensure sufficient funding is available and routes the invoice to the PI to review and approve if programmatic progress is consistent with the level of expenditure  (See Subrecipient Monitoring Procedures).

OSP maintains a record of all active subrecipients and performs and annual risk assessment.  OSP also issues and collects an annual OMB audit certification letter and financial questionnaire for non-OMB subrecipients.

OSP is available to assist PIs and Departmental personnel in the interpretation of subrecipient monitoring policies and procedures.  OSP also will take the lead in developing strategies for resolving issues related to questionable costs or audit issues from subrecipients.

Purchasing and Accounts Payable (AP)
The purchasing department is responsible for consultant and vendor agreements for purchase of services that do not fall under the subrecipient monitoring policy.  Subrecipients are directed to submit invoices to the Mason AP department, which is responsible for initiating the subrecipient invoice routing process to OSP.  After OSP and PI approval, AP will post the payment against the proper encumbrance and issue payment to the subrecipient.

Office of Risk Management
When necessary, the Office of Risk Management shall assist in determining whether a subrecipient maintains adequate commercial and general liability insurance to conduct the programmatic activities required under the statement of work

V. COMPLIANCE

As a recipient of federal funding, Mason assumes the responsibility of providing proper oversight of subrecipients to meet monitoring and reporting requirements.  These requirements include ensuring subrecipients are not debarred or suspended and are eligible to receive federal funds; the subrecipient has appropriate financial systems to manage sponsored funding; the subrecipient does not have outstanding audit issues that will negatively impact the overall project; and that all federal subaward reporting requirements are met.

Associated Federal Regulations:

OMB Uniform Guidance, 2 C.F.R. 200
31 USC 7502(f)(2)(B)(Single Audit Act Amendments of 1996 (Pub. L. 104-156)
U.S. Export Regulation:  ITAR – 2 CFR 120, EAR – 15 CFR 730, and OFAC – 31 CFR 501
Federal Funding Accountability and Transparency Act of 2006 (Pub.L 109-282)

VI. EFFECTIVE DATE AND APPROVAL

The policies herein are effective April 15, 2008.  This policy shall be reviewed and revised, if necessary, annually to become effective at the beginning of the University’s fiscal year, unless otherwise noted.
Approved:

__/S_____________________
Maurice W. Scherrens
Senior Vice President

__/S______________________
Peter N. Stearns
Provost

Date approved: May 14, 2008

Revised: February 14,2013

Revised: January 2015