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The University of Colorado Boulder is responsible for monitoring the programmatic, technical and financial activities of its subrecipients to ensure proper stewardship of sponsored funds.

Sponsored research often involves collaborations with subrecipients. Subrecipients are external entities who are accountable to ����������ý�Ļ���Ʒ for the use of the funds provided to carry out a portion of the scope of work under a sponsored project.

����������ý�Ļ���Ʒ is responsible for monitoring the programmatic, technical, and financial activities of its subrecipients to ensure proper stewardship of sponsored funds. Subrecipient monitoring applies to all subagreements issued by ����������ý�Ļ���Ʒ, regardless of the primary source of funding.

What is Subrecipient Monitoring?

Subrecipient monitoring includes those activities undertaken by ����������ý�Ļ���Ʒ to review the completion of the scope of work and financial oversight of the funds that were awarded to the subrecipient.

As the pass-through entity, ����������ý�Ļ���Ʒ must monitor the activities of subrecipients��as necessary to ensure:

• funding is used for authorized purposes,��
• the sub is in compliance with Federal statutes and regulations,��
• the sub follows the terms and conditions of the subagreement, and��
• subagreement performance goals are achieved

Pass-through entity: Non-federal entity that provides a federal award to a subrecipient to carry out a federal program; sometimes referred to as the “prime” or “lead” organization

Why does ����������ý�Ļ���Ʒ have to monitor subrecipients?

The Office of Management and Budget Uniform Guidance ��requires pass-through entities to:

• Evaluate each subrecipient’s risk of noncompliance to determine the appropriate level of monitoring��
• Monitor the activities of the subrecipient as appropriate, which includes:��
  • Reviewing financial and performance reports from the subrecipient��
  • Ensuring subrecipients take action on any deficiencies pertaining to the subagreement��
  • Issuing management decision for audit findings pertaining to the subagreement

����������ý�Ļ���Ʒ has an ethical responsibility to demonstrate that we are good stewards of the prime sponsor’s funds. Failure to monitor subrecipient compliance could result in:

• Negative audit findings
• Loss of existing awards
• Loss of future awards
• Loss of funds
• Damage to reputation of Principal Investigator and University

Overview of Roles and Responsibilities

Subrecipient monitoring responsibilities are shared by the Principal Investigator (PI), the Office of Contracts and Grants (OCG), and Department Research Administrators (DRA). However, the primary responsible party is the Principal Investigator (PI).

Initial Risk Assessment��

Before issuing a subagreement, OCG’s Subcontract Officer assesses potential risks involved with the subagreement by reviewing information about the subrecipient organization and the terms and conditions of the prime award.

Risk Assessment Factors:��

• Is the subrecipient foreign or domestic?
• Is the subrecipient an academic institution, nonprofit organization, government entity, or for-profit organization?
• Does the subrecipient have a Negotiated Indirect Cost Rate Agreement?
• Were the subrecipient’s most recent audit results satisfactory?
• How mature is the subrecipient organization?
• Does the subrecipient have a policy for determining conflicts of interest?
• Does the ����������ý�Ļ���Ʒ PI have previous experience working with the subrecipient PI?
• Does the subrecipient have experience with managing federal awards?
• How long is the period of performance?
• How much money is involved and what percentage of overall award funding does the subrecipient’s portion represent?
• Can the subrecipient comply with prime award terms and conditions?
• Is the subrecipient providing cost share?

Mitigating Risk��

If potential risks are identified, steps must be taken to mitigate the risks in the subagreement. Strategies for mitigating subaward/subcontract risk include:

• Incrementally fund the subrecipient with smaller amounts and/or shorter budget periods
• Require more detailed reporting
• Increase the frequency of reporting or invoicing
• Require documentation to support invoiced amounts
  • Acceptable documentation includes receipts for purchases, vendor invoices, cancelled checks, time/attendance or payroll records, etc.
• Additional meetings, e.g. scheduled check-ins via phone or virtual meeting
• Withhold funds until evidence of acceptable performance
• Require subrecipient to obtain technical or management assistance
• Require additional prior approvals
• For international subrecipients, always require that invoices and award document amounts are in US Dollars and that the conversion rate to be used is agreed upon in writing
• Issue a fixed-price subagreement (as opposed to cost-reimbursable) with an invoicing schedule based upon the completion of milestones/tasks
  • Milestone and payment schedules should be completed and approved by both the ����������ý�Ļ���Ʒ PI and the subrecipient organization��
  • Fixed-price subagreements are subject to prime sponsor approval��
• Site visits can be scheduled to review records and observe operations, limited-scope audits of certain activities can be arranged, or third-party evaluations can be required

Best Practices for Reducing Risk in All Subagreements:

• Review supporting documentation to ensure that compliance requirements are being met, and require documentation from subrecipient as required
• Seek guidance from OCG for complex award or compliance issues
• Specify a frequency for subrecipient technical reports (monthly/quarterly/etc.)
• Keep written record of PI approval on all invoices
• Encourage frequent communication between the PI, the project fiscal manager, and OCG’s Sub Officer to promote early detection of any potential issues
• Communicate ����������ý�Ļ���Ʒ’s requirements and expectations clearly to subrecipient upon execution of agreement
• OCG reviews subrecipient audit certifications/information on an annual basis to ensure compliance. Subagreements may be amended to address any adverse findings.
• Upon award closeout, ensure that all required deliverables and documentation are received and that the final invoice is marked as such