Sponsored Projects Procedures, Sub-Awards | UTSA | University of Texas at San Antonio

Subrecipient Monitoring Policy

Statement

The University of Texas at San Antonio (UTSA) is responsible for monitoring the programmatic and financial activities of its grant and contract subrecipients in order to ensure proper stewardship of sponsor funds. This policy addresses institutional responsibilities and assists Principal Investigators and staff to ensure that, in addition to achieving performance goals, subrecipients comply with federal laws and regulations and with the provisions of any agreements that govern the award and the subaward.

Reason For Policy

The Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards of the Office of Management and Budget (the OMB Uniform Guidance) requires prime recipients of federal assistance funds to monitor subawards and to ensure subrecipients 1) meet audit requirements of the Uniform Guidance, and 2) use funds in accordance with applicable laws, regulations and terms of the award. Federal Acquisition Regulations (FAR) also require monitoring of subcontractors. This policy for Subrecipient Monitoring applies to all subawards and subcontracts issued under sponsored programs awarded to UTSA, without regard to the primary source of funding and including those awards using non-federal funds.

Who Must Comply

All Principal Investigators, Project Directors, and sponsored project administrators within all areas of UTSA must comply with this policy.

UTSA Compliance Obligations

As a recipient of federal funds that expends $750,000 or more per fiscal year, UTSA must ensure that its subrecipients comply with the Uniform Guidance and sponsor guidelines. UTSA’s responsibilities include:

Informing the subrecipient of all applicable federal laws and regulations and all appropriate flow-down provisions from the prime agreement
Reviewing subrecipients’ federal audit results via the Federal Audit Clearinghouse
Reviewing any corrective actions cited by subrecipients in response to their audit findings, where audit findings are related to UTSA’s awards to the subrecipients
Issuing a management decision on subrecipient’s audit findings within six months after receipt of audit results and ensuring the subrecipient takes appropriate and timely corrective action

Subrecipient monitoring is a component of UTSA’s overall process for administering subawards, but subaward administration is a broader issue that is not fully addressed here. Subrecipient monitoring responsibilities are shared among the following:

Principal Investigators (PIs) have primary responsibility for monitoring subrecipients’ progress, and ensuring compliance with federal regulations and both prime and subrecipient award terms and conditions.
Office of Sponsored Project Administration (OSPA)/Research Service Centers (RSC) assist PIs in reviewing their monitoring responsibilities, reviewing subrecipient invoices, identifying, and following up on questionable expenditures, if necessary, and maintaining documentation of monitoring efforts. OSPA/RSC will also ensure that UTSA’s Subrecipient monitoring policies and procedures comply with federal and other applicable regulations and are applied consistently. OSPA/RSC may provide further training and guidance in interpreting regulations and subrecipient award terms and conditions.
OSPA Subaward Team conducts subrecipient risk assessments, assists in developing monitoring plans, and reviews results of subrecipient findings, corrective action plans, and other issues brought to its attention.
The Assistant Vice President for Sponsored Project Administration reviews and approves certain high-risk subrecipients at the proposal stage or as necessary during the life of the award based on appropriate procedures herein.

Process Overview

The frequency and scope of monitoring procedures should be determined by the responsible PI and OSPA/RSC administrators, consulting as appropriate with the OSPA Subaward Team and/or the Assistant Vice President for Sponsored Project Administration or other UTSA officials when necessary and applicable. UTSA retains flexibility in implementing its monitoring program, depending on the particular situation and the partner involved. UTSA employs a risk-based approach to subrecipient monitoring, focusing more frequent monitoring efforts on those subrecipients deemed to pose a greater potential risk for non-compliance.

Subrecipient monitoring efforts are necessary throughout the life of an award. The UTSA Principal Investigator (PI) and OSPA/RSC Research Award Administrators should use the following subrecipient monitoring procedures when appropriate:

OSPA/RSC Research Award Administrator should complete the Subrecipient Monitoring Questionnaire and perform a risk assessment (see Matrix) prior to issuing a subaward agreement.
The PI should review technical performance reports or other specified deliverables on a timely basis to confirm suitability to the program and general appropriateness for payment. The subaward agreement should contain a table of deliverables and deadlines or a similarly clear presentation of such information to facilitate interpretation by the PI and OSPA/RSC Research Award Administrator. Any concerns, issues, or questions identified through this review should be promptly documented, investigated, and resolved.
The PI and OSPA/RSC Research Award Administrator should review invoices regularly and document the review in the award file. Such documentation may include, for example: PI initials or authorizing signature on invoices; email communications including but not limited to those with the subrecipient; notes of meetings or telephone calls with other administrators, etc.
Each subrecipient invoice must be logged and date stamped, and should show both current period and cumulative expenses-to budget. The PI or OSPA/RSC Research Award Administrator should perform an expense to budget comparison for cost-reimbursement subagreements, and OSPA/RSC Research Award Administrator should confirm fund availability. Cost-sharing (if applicable) and indirect costs should be reflected accurately in accordance with proposed budgeted levels. The PI or OSPA/RSC Research Award Administrator should verify that scheduled deliverables have been provided as of the date of the invoice; that cost categories are allowable; that cost levels are within expected limits; and that costs were incurred during the applicable period of performance.
OSPA/RSC Research Award Administrator should request the subrecipient to provide clarification of invoiced charges that appear unusual, excessive, or otherwise questionable. If subaward terms permit, OSPA/RSC Research Award Administrator may request detailed justification to verify the allowability of the cost. Corrected invoices may also be requested. Examples of detailed justifications include:
- Payroll records
- Copies of paid invoices showing itemized costs
- Descriptions of services rendered by consultants including hourly rates and time reports
- Details of incurred travel charges stating the purpose of the travel
- Records identifying any unallowable costs
OSPA/RSC Research Award Administrator should check SAM.GOV to confirm the subrecipient and PI have not been disbarred or suspended. Results should be printed and included with payment documents. If disbarred or suspended, notify and follow steps provided by RSC Director.
Subrecipients not subject to the OMB Uniform Guidance Subpart F may require additional monitoring by OSPA/RSC Research Award Administrator to ensure compliance. For subrecipients deemed to require closer scrutiny, PIs and OSPA/RSC Research Award Administrator should establish additional channels of communication, criteria, or monitoring plans. Subrecipient monitoring plans should be devised, as appropriate. UTSA’s contracts with foreign or for-profit subrecipients may specifically describe applicable compliance requirements and responsibilities.
The PI and/or RSC Director may at their discretion conduct on-site visits to evaluate compliance with the project’s scientific or technical objectives, and the appropriateness of the subrecipient’s administrative systems, processes, and charges.
Audits of subrecipients may be performed on a discretionary basis in order to identify and/or resolve questionable costs or other noncompliance issues. RSC Directors should contact the Assistant VP of Sponsored Projects Administration and UTSA Audit, Compliance and Risk Services (ACRS) before initiating discretionary audits.

The OSPA/RSC should follow the stages of subrecipient monitoring as described below, with input from PIs when appropriate.

The OSPA Subaward Team shall conduct the following subrecipient monitoring when appropriate:

The OSPA Subaward Team will perform a risk-based review of active subrecipients, paying particular attention to those deemed to require closer scrutiny in light of considerations including, but not limited to, the following:
- UTSA’s current and prior experience with the subrecipient
- The size of the subrecipient award’s annual budget and size relative to the subrecipient’s total sponsored program portfolio
- The percentage of the program award passed through to the subrecipient
- The complexity of the award, sensitivity of the work and/or scope of governing regulations
- The international location of the subaward or subrecipient
- The for-profit status of the subrecipient
- The level of sophistication of the subrecipient’ s administrative team and financial systems
- The audit results
The OSPA Subaward Team is responsible for developing and maintaining subrecipient monitoring tools for the use of the UTSA community.
The OSPA Subaward Team shall review subrecipient federal audit reports to verify that the subrecipient has completed the 2 CFR 200 Subpart F – Audit Requirements and to assess audit findings, if any. In the case of audit findings, the OSPA Subaward Team is responsible for reviewing the subrecipient’s corrective action and for issuing UTSA’s management decision.
For entities not subject to federal audit requirements, the OSPA Subaward Team may request from the subrecipient its audited financial statements and/or completion of a financial controls questionnaire.

Contacts and Subject Matter Experts

Office of Sponsored Project Administration
Research Service Centers for:

Downtown Campus
College of Engineering
College of Sciences
Institute for Economic Development
Liberal & Fine Arts, Business, and Honors College
College of Education

Audit, Compliance and Risk Services
Office of Research Integrity
OSPA Subaward Team

Definitions

Federal Audit Clearinghouse – A division of the Office of Management and Budget that collects information on federal audit results.

OMB Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards – Final guidance of the Federal Office of Management and Budget (OMB) that consolidates the guidance previously contained in various OMB Circulars, including OMB Circulars A-21, A-87, A-110, and A-122; A-89, A-102, and A-133; and the guidance in Circular A-50 on Single Audit Act follow-up.

Federal Acquisition Regulations (FAR) – the principal set of rules in the Federal Acquisition Regulation System that governs the “acquisition process” by which the US Government purchases (acquires) goods and services. The FAR is codified at Title 48, Chapter 1 of the United States Code of Federal Regulations.

Pass through entity – a Non-Federal entity that provides a Federal award to a subrecipient to carry out a Federal program.

Prime recipient – the direct recipient of funds to support a sponsored research project.

Subaward (subcontract or subgrant) – An enforceable agreement, made under a prime award, between a prime recipient and a subrecipient for the performance of a substantive portion of the program. These terms do NOT apply to the procurement of goods or services from a vendor.

Sponsored Project – A funding arrangements in which the University is providing a return benefit to, or agrees to provide a defined deliverable or complete a set of activities for, the sponsor in exchange for the funds, regardless of whether the funding instrument is designated a contract, cooperative agreement, grant, consortium agreement, or otherwise.

Subrecipient (subcontractor or subawardee) – An organization eligible to receive a financial award. A subrecipient’s performance is measured against whether the objectives of the sponsored program are met; subrecipients have responsibility for programmatic decision-making and for adherence to applicable program compliance responsibilities. Subrecipients are responsible for performing a substantive portion of the program, as opposed to providing goods and services.

Contractor (Vendor) – An entity that provides goods and services within normal business operations. Vendors provide similar goods and services to many different purchasers; normally operates in a competitive environment; and provides goods or services that are ancillary to the operation of the sponsored program. Vendors may not be subject to all compliance requirements.