Purpose

To provide guidance regarding NIU’s monitoring and stewardship obligations when transferring responsibility for a portion of sponsored work to another organization.

Reason for Policy

NIU Principal Investigators (PI) may need to collaborate with colleagues at other institutions or organizations to enhance scientific or programmatic aspects of a research project or because a funding solicitation encourages multiple organizations to participate together.

These collaborations often require NIU to transfer a portion of the sponsored project funds and scope of work to a collaborating institution. Under this arrangement, the collaborating institution becomes a “subrecipient” to NIU and becomes responsible for its portion of the award. However, Federal regulations ultimately hold NIU accountable for their programmatic and fiscal performance. NIU’s inability to properly classify an entity as a subrecipient and effectively monitor these agreements can result in disallowed award costs or loss of federal funding.

Intended Audience

• Faculty and Staff
• Departmental/Divisional Business Administrators
• Finance Personnel
• Procurement
• General Counsel
• Sponsored Programs Administration Personnel

Definitions

Pass-through entity 2 CFR §200.74: Pass-through entity means a non-Federal entity that provides a subaward to a subrecipient to carry out part of a Federal program. In the context of this policy, NIU is the non-Federal entity.

Subrecipient 2 CFR §200.93: Subrecipient means a non-Federal entity that receives a subaward from a pass-through entity to carry out part of a Federal program; but does not include an individual that is a beneficiary of such program. A subrecipient
may also be a recipient of other Federal awards directly from a Federal awarding agency. In the context of this policy, the collaborating institution is the subrecipient.

Subaward 2 CFR §200.92: Subaward means an award provided by a pass-through entity to a subrecipient for the subrecipient to carry out part of a Federal award received by the pass-through entity. It does not include payments to a contractor or payments to an individual that is a beneficiary of a Federal program. A subaward may be provided through any form of legal agreement, including an agreement that the pass-through entity considers a contract. The term subaward is used to describe the agreement that NIU will issue to the collaborating institution to transfer funding for the collaborator’s portion of the project.

Contractor 2 CFR §200.23: A contractor is an entity that receives a contract as defined in §200.22 Contract (see Contract below).

Contract 2 CFR §200.22: Contract means a legal instrument by which a non-Federal entity purchases property or services needed to carry out the project or program under a Federal award. The term as used in this part does not include a legal instrument, even if the non-Federal entity considers it a contract, when the substance of the transaction meets the definition of a Federal award or subaward. The term contract is used to describe vendor or professional services needed for a sponsored award.

Subrecipient or Contractor?

The below characteristics are a guide only. Ultimately, the substance of the relationship is most important when classifying an entity as a subrecipient or vendor.

These are the characteristics of a subaward. The subrecipient:

• Has responsibility for programmatic decision making.
• Contributes to the scholarly/scientific conduct of the project as described in the statement of work for the prime award.
• Uses the funding to carry out a program for a public purpose specified in the authorizing statute, as compared to providing goods or services for the benefit of the pass-through entity.
• Exercises considerable discretionary judgment and provides unique expertise in the performance of the work.
• Would be considered as a co-author of publications resulting from the work performed under the prime award.
• Performs work that involves human subjects or animal studies.

These are the characteristics of a contract. The vendor:

• Provides goods or services within normal business operations and operates in a competitive environment providing similar goods and services to a variety of customers.
• Provides a routine service (e.g., equipment fabrication or repair, data processing, performing routine analytical testing services, etc.)
• Provides the goods or services as part of its normal business operations.
• Operates in a competitive environment (i.e., competes with others who can provide a similar service)
• Provides similar goods or services to many different purchasers.

Policy

NIU will manage subrecipient agreements in accordance with 2 CFR 200.330 and 200.519, university policies, applicable sponsor regulations, and the terms and conditions of the sponsor award. As the pass-through entity, NIU remains responsible for the transfer of funds to a subrecipient and for meeting all project’s performance goals.

Roles and Responsibilities

Principal Investigator

• Selects subrecipient(s) for inclusion in the proposal based on expertise and project needs
• Ensures that the subaward scope of work outlines only the work to be done by the subrecipient
• Verifies that the budget/budget justification supplied by the subrecipient aligns with the scope of work to be performed
• Provides SPA with the name and contact information for the individual at the subrecipient institution for administrative matters
• Provides feedback to SPA regarding deliverables and other needs specific to the project
• Determines frequency of technical reports from the subrecipient and maintains documentation of these reports
• Reviews subaward and related amendments for content and accuracy before SPA offers it to the subrecipient
• Assists SPA with meeting institutional risk determination activities
• Monitors progress of the work being performed under the subaward and communicates issues directly to the subrecipient PI and project collaborators
• Reviews invoices for the following:
  • Dates match the correct period of performance
  • Charges are reasonable and allowable
  • The charges fall within the subaward budget and statement work
  • Required deliverables have been received (e.g., progress reports, technical reports, etc.)
  • Progress to date is satisfactory
• Discusses concerns and/or requests additional detail from subrecipient PI when needed
• Promptly notifies the Grants and Contracts Associate if an invoice is unacceptable
• Provides Grants and Contracts Associate with a written approval to pay subrecipient and follows up with the subrecipient to:
  • Obtain late/missing invoices, where appropriate
  • Obtain cost sharing documentation, where appropriate
• Notifies Grants and Contracts Associate of concerns including:
  • Failure by the subrecipient to make satisfactory progress
  • Late/missing deliverables, technical reports, etc.
  • Inability to obtain documentation from subrecipient for
  • Invoices
  • Cost sharing documentation

Sponsored Programs Administration

SPA Proposal Coordinator

• Works with PI during proposal submission to ensure the entity is properly classified as a subrecipient or vendor
• Works with subrecipient to obtain at minimum, a commitment letter confirming the entity’s willingness to participate in the project and verifying that it is not debarred from receiving federal funds, as well as a statement of work, detailed budget and budget justification, and any other documents necessary for timely proposal submission
• Responds to questions from the subrecipient related to the subaward to be included in the proposal
• Obtains a subrecipient commitment form or verifies entity status in the FDP Clearinghouse
• Conducts subrecipient risk assessment to flag any potential concerns with issuing a subaward, communicates high-risk subrecipients to SPA leadership and PI for follow-up.