As a prime recipient and a pass-through entity of Federal awards, UT is responsible for monitoring subrecipients to ensure proper stewardship of Federal funds. Subrecipient monitoring is essential at all stages of the subaward process from proposal to award closeout. In order to maintain consistency and be good stewards of all our funding UT performs the same level of monitoring on all subawards regardless of where the prime funding comes from.
Subrecipient Monitoring begins at award proposal and continues throughout the life of the award until closeout.
These guidelines are provided to assist PIs/departments to ensure proper use of sponsor funds.
What is a Subaward/Subrecipient?
A Subaward is an award issued under a larger sponsored projects award for specific program-related tasks. Issuance of a Subaward under a federal prime award is subject to compliance with federal law. All Subawards are subject to the terms and conditions of the prime award and the normal purchasing requirements of UT.
Subrecipients perform an intellectually significant portion of the Scope of Work under a UT research project. This should not be confused with a procurement contract used to acquire goods or services from a vendor.
In order to properly determine which type of relationship is appropriate review the Subrecipient vs. Contractor Guide or contact your OSP pre-award specialist.
Roles & Responsibilities for Subrecipient Monitoring
Office of Sponsored Projects - Pre-award
- Verify if the relationship is a contractor or a subrecipient.
- Collect Subrecipient Commitment Letter.
- Review the Statement of Work, budget and budget justification, and any committed cost sharing.
- Verify that subrecipient is compliant with IRB, IACUC, and IBC approvals (if applicable).
- Complete Risk Assessment Questionnaire - risk classification will determine what language is included in the agreement.
- Collect Subrecipient Audit Certification and Sub Recipient Pre-Qualifying Questionnaire (if applicable).
- Work with PI and Subrecipient Monitor to include reporting and other terms and conditions to allow UT to perform required monitoring of subrecipient depending on assessed risk.
- Add terms and conditions to the subaward agreement to mitigate risks as needed.
- Process subawards and amendments.
- Manage ongoing collection of Subrecipient Audit Certification Form.
- Ensure the subrecipient's Statement of Work (SOW) includes a clear description of the work to be performed, the proposed timelines, and deliverables.
- Review the subrecipient's budget and budget justification, including the subrecipient's direct and indirect costs, and verify any committed cost sharing.
- Require financial and technical reports to adequately monitor progress and fulfill reporting requirements to the sponsor. Progress reports should be provided in sufficient time to allow the subaward information to be incorporated into UT’s progress report to the sponsor.
- Review the SOW, budget, period of performance, payment terms, and carry forward.
- Review UT sponsor’s award terms and conditions with OSP and the subrecipient to ensure all requirements can be met by subrecipient.
- Monitor subrecipient technical progress and adherence to terms of award and cost sharing requirements.
- Review invoices. Please see the Invoice Review Guidelines below for guidance.
- Subaward Amendments - Assess need to modify statement of work, budget, period of performance.
- Plan for a timely closeout - check status with subrecipient 90 days before end date, follow up on any late or missing reports, ensure subrecipient submits a final invoice on time and marked FINAL.
Sponsored Projects Award Administration – Subrecipient Monitor
- For high risk subawards - review the Risk Assessment Questionnaire, most recent audit, and agreement for potential issues and prepare a monitoring plan.
- Review and approve subrecipient invoices for payment.
- Perform desk reviews of subawards as needed to evaluate subrecipient compliance with Uniform Guidance.
- Maintain list of active subawards including risk level.
- Annually collect Subrecipient Audit Certification form for on-going subawards.
- Assist departments with monitoring the spend rate on subawards.
- Assist departments and PIs with trouble shooting issues that arise.
These roles and responsibilities only apply to sub recipient monitoring and additional roles and responsibilities may exist related to subawards.
Risk Assessments are a required part of subrecipient monitoring by Uniform Guidance. Under §200.331, all pass-through entities (PTEs) are required to evaluate each subrecipient’s risk of noncompliance with Federal statutes, regulations, and associated award terms and conditions. UT uses a risk-based approach to subrecipient monitoring, focusing more robust monitoring efforts on subrecipients deemed to pose an elevated risk for potential non-compliance.
A risk analysis is completed by UT to evaluate the likelihood that a subrecipient will fail to comply with the requirements of the subaward.
High-risk subrecipients may be contractually obligated to provide detailed documentation of charges. The PI and Grant Accounting must review all required additional documentation prior to invoice approval. All high-risk Subrecipients will require additional monitoring from the PI and Grant Accounting.
Factors Influencing Risk
The criteria used in evaluating risk can include:
- Subrecipient's audit experience
- Prior oversight and monitoring the subrecipient has received
- Size, nature, and complexity of the proposed research project
- Fiscal maturity of the subrecipient
If the subrecipient is not subject to the Uniform Guidance Single Audit requirement, OSP may contact the subrecipient to obtain a copy of their audit or the subrecipient may be asked to complete a Subrecipient Pre-Qualifying Questionnaire to complete the risk analysis. OSP will also verify that FCOI documentation is on file.
Invoice review is an important part of the subrecipient monitoring process. During the invoice review process both technical progress and expenditures are evaluated to ensure compliance with all applicable terms and conditions. It is during this review that issues can be identified and addressed.
To assist with proper invoice review, use the Subrecipient Invoice Review Checklist when reviewing subrecipient invoices.
PI/Project Manager/Program Coordinator
- Confirm performance goals are being met and expenditures align with technical progress. The expenses invoiced should agree with the work performed.
- Ensure that any programmatic reports due during the period of time covered by the invoice are received and are satisfactory.
Department Research Administrator
- Confirm that invoice’s billing period is within the subaward’s period of performance.
- Ensure expenses on a cost reimbursable sub-contract charged are based on actual expenses incurred during the invoice period.
- Confirm there are sufficient funds committed to process the invoice (i.e. subaward is not over expended).
- Identify any clearly unallowable costs.
- Identify expenditures that may require SPAA or sponsor approval.
- Confirm the correct application of subrecipient’s F&A rate.
- Verify cumulative amount of expenditures is correct and does not exceed the overall approved budget amount.
- Confirm all required backup documentation has been received (if applicable).
- Ensure cost sharing goals are met (if applicable).
- Confirm invoice period and amounts are clearly stated and fall within the period of performance and budget for the subaward.
- Confirm the invoice contains a signed certification statement.
- Verify there is available budget in Define to pay invoice.
- Review any backup documentation for completeness and evaluate the allowability of expenditures.
- Verify indirect costs have been charged correctly.
Fixed price invoices identify deliverables/tasks that are being billed, Award amount for each deliverables/tasks, and timeline/due dates (if any) for the deliverables/tasks.
A completed and signed Invoice Review Checklist is required with each submission of a subrecipient invoice.
Common Invoice Review Issues
Questionable Invoiced Charges: In the event the level of detail included on an invoice is not sufficient, or if it appears that some costs may be excessive, understated, or inconsistent with the work completed during the invoice period the PI or department research administrator should question the subrecipient's expenditures by requesting further documentation or explanation prior to approving an invoice. If the explanations are not sufficient to render a prudent judgment on the allowability of costs, and the terms of the subaward permit, department research administrators may request detailed justifications from subrecipient. Such inquiries must be done in a timely manner (e.g., within thirty days after receipt of an invoice) so that the subrecipient can be promptly paid for their approved costs.
Unallowable Invoiced Charges: During invoice review if unallowable charges are discovered the invoice should not be approved for payment, the invoice should be returned to the subrecipient for revision. Examples of unallowable charges are not limited to, but may include:
- Charges outside of the subaward period of performance
- Charges not clearly identified and/or included in the approved budget
- Charges considered unallowable by the prime sponsor
If there are any questions about the allowability of a charge please contact SPAA. Do not approve an invoice for payment if the invoice includes unallowable costs, or if expenses charged are not part of the subrecipient’s budget in the subaward agreement.
Timeliness of Invoicing: Invoices should be submitted in chronological order, on a regular schedule, and within a reasonable amount of time after the end of the billing period. Additionally, if an invoice is submitted by the subrecipient after the contractually required invoicing timeframe in the subaward, UT may elect to not pay the invoice. UT needs to pay invoices before the sponsor’s required reporting/payment timeframe and within SPAA’s closeout timeframe to ensure payment from UT’s sponsor.
Subrecipients are required to submit a final invoice, clearly marked “Final” to UT by the date that is required in the subaward agreement, typically no later than 45 days after the end of the Subrecipient's period of performance.
Do not hesitate to contact Valerie Baldwin in SPAA at email@example.com if you are having any concerns about a subaward.
An integral part of subaward monitoring is closeout of the subaward at the end of the project period. This is the point at which the PI determines whether the subrecipient has fulfilled all of its responsibilities under the subcontract. In general, a subcontract is closed when all deliverables have been met and the final payment has been made.
The PI and department, should begin subaward closeout review at least 90 days prior to the conclusion of the subaward period of performance. This will allow adequate time for the department and PI to make any budgetary actions or requests for extensions to the sponsor, if necessary. Generally, subawards should be processed for closeout and formally closed within 60 days following the subcontract end date. Depending on the prime funding source, closeout may be required sooner.
The PI is responsible for obtaining technical/progress reports, equipment reports, patent certifications, final invoices, final financial report from the subrecipient, and the Subrecipient Closeout Form. The Subrecipient Closeout Form is then submitted to SPAA.
The PI/department research administrator can contact SPAA for assistance if any subrecipient has not provided the required deliverables. SPAA will also be able to assist in securing information and invoices from subrecipients who have failed to meet their obligations under their respective subawards. However, timely notification to SPAA is essential in ensuring a successful and collegial resolution.
The PI should not submit the final subrecipient invoice for payment until all required deliverables have been received.
Can a subrecipient rebudget to accommodate a higher F&A rate if they provide an updated rate agreement?
Regardless of the type of recipient, the rate(s) in effect at the beginning of the award/competitive segment will be used to determine the amount budgeted for F&A costs for each year of the award/competitive segment.
If the work of the subrecipient is not satisfactory, what actions should be taken?
The PI should contact his/her counterpart PI at the sub recipient institution to discuss the concerns and see of a resolution can be reached. If a satisfactory resolution cannot be agreed upon, the PI or department research administrator should hold off on approving invoices for payment and contact the Subrecipient Monitor in SPAA.
What if I have not been receiving invoices from my subrecipient on a regular basis?
Review the invoicing requirements in the subaward agreement, confirm work is continuing to be completed, and reach out to the financial contact for the sub recipient. If work is no longer being completed or there continues to be issues with invoicing, contact the Subrecipient Monitor.