Subrecipient Monitoring

Purpose

To provide guidance regarding NIU’s monitoring obligations when transferring 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 project or because a funding solicitation encourages multiple organizations to participate together.

These collaborations require NIU to transfer a portion of the award funds to the collaborating institution. Under this arrangement, the collaborating institution becomes a subrecipient to NIU and is responsible for its portion of the award. Federal regulations (2 CFR 200) set forth requirements that hold NIU accountable for the subrecipient’s programmatic and fiscal performance. NIU’s inability to properly classify an entity as a subrecipient and effectively monitor their performance can result in disallowed costs or loss of funding.

Intended Audience

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

Definitions

Pass-through Entity: Pass-through entity means a non-Federal entity or recipient that provides a subaward to a subrecipient to carry out part of a federal program. In the context of this policy, NIU is the pass-through entity or recipient.

Subrecipient: Subrecipient means a non-Federal entity that receives a subaward from a pass-through entity or recipient 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: Subaward means an award provided by a pass-through entity or recipient to a subrecipient to carry out part of a federal award. 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 or recipient considers a contract. The term subaward is used to describe the agreement that NIU will issue to the subrecipient.

Contractor: A contractor is an entity that receives a contract as defined in 2 CFR 200.

Contract: 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 or recipient 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 contractor.

These are common 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 or recipient.
• Has considerable discretionary judgment and provides unique expertise in the performance of the work.
• Would be considered 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 common characteristics of a contract. The contractor:

• 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.).
• 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.
• Would often not be considered a co-author of publications resulting from the work performed under the prime award.

Policy

NIU will manage subrecipient agreements in accordance with Federal regulations (2 CFR 200), university policies, applicable sponsor regulations, and the terms and conditions of the sponsored award.

Principal Investigators (PI) are responsible for the oversight of subawards associated with their sponsored awards. Sponsored Programs Administration (SPA) will facilitate the execution of these agreements and assist PIs in managing oversight and compliance.

This policy does not apply to contractors providing goods and services. These contracts are managed through the university procurement processes.

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 aligns with 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
• 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
• Promptly notifies SPA if an invoice is unacceptable or of any performance concerns
• Authorizes payments to subrecipients and follows up with the subrecipient to obtain late/missing invoices, cost share or other documentation necessary to support payment

Sponsored Programs Administration

• Works with the PI during proposal submission to ensure the entity is properly classified as a subrecipient or contractor
• Confirms that all necessary subrecipient monitoring and reporting documentation is complete
• Drafts and executes subaward agreements
• Submits agency prior approval requests to add subaward(s) when required   
• Conducts routine subrecipient audit compliance reviews
• Confirms PI approval of subrecipient invoices
• Authorizes subrecipient payments
• Manages subaward closeout process