GAP NO. 200.280
Monitoring Subrecipients - Federal Funds
I. GENERAL
A subrecipient (subcontractor or subawardee) is a third-party organization that receives funding from Duke to collaborate in carrying out an externally funded program.
Duke University is responsible for monitoring the programmatic, financial, and conflict of interest (COI) status of its sponsored research award subrecipients. Subrecipient monitoring responsibilities are shared among the department (the PI and the grant administration staff) and the Pre- and Post-award offices.
The following guidelines and procedures are provided to address institutional responsibilities and to assist responsible faculty and staff in ensuring that subrecipients conduct their portions of research projects in compliance with regulations and that their expenses are reasonable and allowable.
II. AWARDS OF FEDERAL FUNDS TO SUBRECIPIENTS
OMB Circular A-133 "Audits of Institutions of Higher Education and Other Non-profit Institutions" requires that institutions receiving federal awards:
- have internal controls which provide reasonable assurance that the use of resources is consistent with laws, regulations, and award terms
- safeguard resources against waste, loss, and misuse
- obtain, maintain, and fairly disclose reliable data in reports
Any recipient of federal awards providing federal funds to a subrecipient must determine: (1) whether the subrecipient meets the audit requirements of the circular; and (2) whether the subrecipient has spent the federal funds in accordance with applicable laws and regulations.
When Duke University subcontracts out a portion of a Federal award, the subaward agreement will include language:
- requiring the subrecipient to certify its compliance with the OMB Circular A-133;
- instructing subrecipients to provide the Duke University Office of Sponsored Programs with a copy of the A-133 audit report or other appropriate audit report for any fiscal year in which the subrecipient received $500,000 or more from Federal sources.
- or, if not subject to OMB Circular A-133, requesting documentation, in the form of audit reports and financial statements that substantiate the certification of compliance with the applicable OMB Circular;
- establishing that Duke has the right to require the subrecipient to permit independent auditors access to its records and financial statements needed to comply with Circular A-133; or,
- If the prime sponsor is NIH, NSF, or CDC, ensuring that the subrecipient is compliant with the conflict of interest policies of these agencies.
III. MONITORING NON-PROFIT SUBRECIPIENTS RECEIVING FEDERAL FUNDS OF $500,000 OR GREATER PER YEAR
If a non-profit subrecipient receives $500,000 or more per fiscal year in federal funds, Duke must ensure they are in compliance with OMB Circular A-133. Each subrecipient should provide the Office of Sponsored Programs at Duke University with an audit report in compliance with A-133. If the audit report is not received in a timely manner, the Office of Sponsored Programs will inform the appropriate Pre-award Office and the proper course of action will be determined.
All documentation received will be reviewed and maintained by the Office of Sponsored Programs. Audit reports received from subrecipients will be kept on file for a minimum of three years from their issuance.
If the documentation indicates instances of non-compliance with federal laws and regulations affecting the subcontract issued by Duke University , the Office of Sponsored Programs will contact the subrecipient and inform them that they need to provide evidence of corrective action. The Office of Sponsored Programs will maintain a current listing of all subrecipients from which corrective action is expected and ensure that follow-up occurs on a timely basis. If the subrecipient fails to establish that corrective action has been taken, the Office of Sponsored Programs will inform the appropriate Pre-award Office and the proper course of action will be determined. In noted instances of non-compliance, the Office of Sponsored Programs will maintain documentation of action taken and the results of such action.
IV. INITIAL ASSESSMENT AND ONGOING MONITORING - DUKE UNIVERSITY GUIDELINES
The frequency and scope of departmental monitoring procedures should be determined jointly by the Pre- and Post-award Offices. A "risk-based" approach to subrecipient monitoring is recommended with the frequency and intensity of monitoring driven by the considerations stated below. Taking this approach thereby focuses monitoring on the subrecipients who are at greatest potential risk for non-compliance. The following factors may be considered by the Pre- and Post-award Offices in assessing level of risk:
- award complexity, sensitivity of the work and/or extensiveness of the governing regulations
- subrecipient's A-133 audit performance if applicable
- subrecipient location (proximity to adequate administrative infrastructure) or for-profit status and audit reports
- size of the subrecipient award
- award size relative to the subrecipient's sponsored research portfolio
- percentage passed through
- prior experience with the subrecipient
- sophistication of the subrecipient's systems and administrative operations
V. ROLES AND RESPONSIBILITIES
Roles:
- Principal Investigator
- Departmental Grant Administrator
- Pre-award Officer
- Post-award Officer
Responsibilities:
Principal Investigators (PIs) have primary responsibility for:
- establishing channels of communication with subrecipients;
- ensuring performance goals are achieved;
- reviewing invoices from subrecipients for compliance with regulations and award terms and conditions as needed based on subrecipient assessment;
- reviewing performance, with the Pre-award Officer, at time of modification (ORA/ORS Subrecipient Form III); and,
- approving final invoices in a timely manner for closeout.
Departmental Grant administrators have responsibility for:
- filling out the Subrecipient Checklist (ORA/ORS Subrecipient Form I) jointly with the subrecipient at time of the proposal;
- assisting PIs in carrying out their monitoring responsibilities;
- reviewing invoices from subrecipients for compliance with regulations and award terms and conditions as needed based on subrecipient risk assessment;
- assisting PIs in ensuring final invoice approval; and,
- maintaining documentation of monitoring efforts.
The Pre-award Officers (Office of Research Administration and Office of Research Support) have responsibility for:
- reviewing subrecipient proposals and certifications, including conflict of interest, at time of proposal;
- identifying subrecipients that have been suspended or debarred from receiving federal funding, identified as terrorist entities, or associated with terrorist entities;
- assessing the level of risk associated with a proposed subrecipient at time of award (ORA/ORS Subrecipient Form II) ;
- determining the appropriate type of subaward agreement to be issued and ensuring contract provides a framework for compliance;
- determining the frequency of post-award monitoring by PI and department; and,
- reviewing performance, with the PI, at time of modification (ORA/ORS Subrecipient Form III) .
The Post-award Officers (Office of Sponsored Programs) have responsibility for:
- reviewing the A-133 audit reports of proposed subrecipients;
- requesting and reviewing annual audit reports during the life of the award;
- monitoring non-profit subrecipients that receive > $500,000 in federal awards;
- monitoring for-profit subrecipients in a similar manner;
- reviewing invoices for unallowable costs;
- performing random audits, requesting additional documentation in the form of original receipts, copies of payroll records and audits if needed; and,
- documenting internal controls and procedures for sampling and monitoring.
VI . Monitoring for Subrecipient Conflict of Interest (COI)
When a Principal Investigator has an interest in or a relationship with the subrecipient entity, it shall be disclosed.
| GAP History | |
| Issued: | January 1997 |
| Revised: | September 2001 |
| Revised: | February 2003 |
| Revised: | September 2006 |
| Revised: | February 2007 |