9.6.1 Subrecipient Monitoring in Grant-Sponsored Programs Procedure

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Chapter 9: Grants and Sponsored Projects

9.6.1 Subrecipient Monitoring in Grant-Sponsored Programs Procedure

Related Policy from the Code of Federal Relations: 2 CFR 200.93 (http://www.ecfr.gov/cgi-bin/text-idx?node=2: and 2 CFR 200.330-332 (http://www.ecfr.gov/cgi-bin/text-idx?node=2:

Purpose:  To describe the process for identifying, assessing risk of, and monitoring subrecipients of Federal awards as outlined in Policy 9.6.

Part 1: Pre-Award Procedures

Subpart A: Subrecipient or Contractor Determination

  1. During the Federal grant proposal development process, the need for services provided by an entity other than Normandale may be identified. The Principal Investigator (PI) or Project Director (PD), with assistance from other members of the planning team, will compare the activities that need to be performed with Normandale’s capacity and capabilities to perform these activities.
  2. If it is determined that a gap exists in Normandale’s capacity and capabilities, the use of an outside entity will be pursued.
  3. Based on the type of work to be performed by the outside entity, a determination will be made as to whether the entity is a contractor or subrecipient.
  4. The PI/PD will complete the “Subrecipient or Contractor Classification Checklist,” Exhibit A.
  5. The Grants and Sponsored Projects Office will review the completed checklist to determine whether the entity is a contractor or a subrecipient.
  6. The determination will be noted and filed in the Grants and Sponsored Projects Office.
  7. The Grants and Sponsored Projects Office will communicate the final determination to the PI/PD and the Fiscal Services Office.

Subpart B: Selection of Subrecipient

  1. If the results of the subrecipient/contractor determination indicate that the entity should have a subrecipient status, then a subrecipient is selected.
  2. Potential subrecipient organizations are identified through networking, communications, professional associations, attendance at conferences, and personal experiences of the PI/PD.
  3. The PI/PD discusses the project with the potential subrecipient organizations in order to determine the organizations’ strengths and expertise related to the project, the organizations’ willingness and capacity to perform the role, the organizations’ acceptance of any budgetary constraints and the organizations’ receptiveness and ability to adhere to Federal regulations.
  4. The ultimate selection of a subrecipient is based on 1) the PI/PD’s recommendation after they have reviewed and assessed the items listed in Section 2.c. above and 2) the results of the pre-award risk assessment (Section 3 below).

Subpart C: Initial Risk Assessment of Subrecipients

  1. Normandale’s Office of Grants & Sponsored Projects will perform a pre-award risk assessment before the subaward agreement is finalized.
  2. The Subrecipient Commitment Form will be sent to the subrecipient prior to submission of the grant proposal, to the greatest extent practicable. If a grant proposal is due and time isn’t available to distribute the form prior to submission, then the evaluation may occur subsequent to the proposal submission.
  3. Upon receipt of the completed Subrecipient Commitment Form, the Grants Specialist will review the responses and complete the “Evaluation of Subrecipient Commitment Form.”
  4. If the subrecipient does not have Single Audits performed, then the subrecipient will be asked to complete the Financial Procedures Questionnaire.
  5. The Grants Specialist will review the System for Award Management (SAM) to determine whether the subrecipient is suspended or debarred. If the subrecipient is suspended or debarred, then Normandale will either exclude the subrecipient from receiving Federal funds or otherwise notify and obtain approval from the applicable funding agency to utilize the subrecipient.
  6. If the totals on the Evaluation of Subrecipient Commitment Form are between 6% and 50%, the subrecipient will be asked to complete the Financial Procedures Questionnaire.
  7. The Office of Grants & Sponsored Projects will work with Fiscal Services to establish additional monitoring procedures of subrecipients required to complete the Financial Procedures Questionnaire, if necessary.
  8. The Office of Grants & Sponsored Projects will maintain documentation of the initial risk assessment and submit documents and results to Fiscal Services if/when the subaward is executed.
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Part 2: Post-Award

Subpart A: Subawards

The Normandale Office of Grants & Sponsored Projects will submit a subaward to the subrecipient for review and execution. The subaward will contain the following:

  1. Normandale’s name, address, and contact information for the signing authorized official
  2. The subrecipient’s name and DUNS number
  3. The Federal award name, identification number, and amount
  4. Federal award date, including the grant period of performance start and end dates
  5. Total amount of Federal funds obligated to the subrecipient for the entire grant period and amount obligated by the specific subaward
  6. Subaward period of performance start and end dates
  7. A brief project description
  8. Name of Federal awarding agency and Catalog of Federal Domestic Assistance (CFDA) number and name
  9. Indirect cost rate for the Federal award
  10. Indirect cost rate to be used by the subrecipient
  11. Statement as to whether the award is for research and development
  12. Reference to all Federal laws, program specific laws, administrative requirements, cost principles, audit requirements, and specific grant agreement requirements that the subrecipient must follow during the term of the agreement
  13. Details on the use of prior approvals and on reporting requirements, including report deadlines, required content of both performance and financial reports and documented correlation between performance/project activities and financial results
  14. Requirement stating that the subrecipient must permit Normandale and/or auditors access to its records and financial statements
  15. Close out requirements, including deadlines and reports

Subpart B: Monitoring

  1. The Project Director/Principal Investigator/Program Manager will:
    a. Maintain active lines of communication with subrecipients throughout the grant period
    b. Review technical and performance reports
    c. Review and approve invoices to ensure charges are reflective of the activities/performance accomplished during the time period covered by the
    d. Approve invoices in a timely manner to ensure payment can be processed within the 30-day Federal requirement
    e. Approve final invoices so that closeout procedures can be accomplished within Federal deadlines

  2. As a result of the risk assessment procedures, subrecipients are categorized into one of three risk levels: standard, medium risk, and high risk. The categorization determines the nature and extent of monitoring procedures that will occur. The Office of Grants and Sponsored Projects will ensure the following monitoring processes are implemented based on each risk level:

    a. Standard (low risk)
         i. Verify that annual audit reports pertaining to audits of Federally-funded program expenditures are completed annually by sending a certification
            letter to subrecipients requiring either a) a certification that an audit was not required for the year and including the amount of Federal 
            expenditures for the year; or b) a certification specifying the total Federal expenditures for the year and requiring submission of the report to
            Normandale within nine months of the subrecipient’s fiscal year ending or within 30 days of the audit report’s issuance to the subrecipient.
         ii. Review and evaluate audit report findings, if applicable, for impacts on Federal award financial and performance data.
         iii. Modify Federal award financial and performance data, if necessary.
         iv. Issue management decisions to subrecipients following review of subrecipient audit reports, if findings were reported.
         v. Monitor, through correspondence with the subrecipients, the facilities and administrative rate agreements to assess the accuracy of the rates used
             for reimbursement during the award period.
         vi. Review monthly invoices to ensure:
              1. Timeliness
              2. Completeness of supporting documentation
              3. Accuracy
              4. Project Director approval stating “OK to pay”
       vii. Monitor cumulative budget vs. expense
       viii. Confirm compliance with agency reporting requirements

    b. Medium risk (in addition to procedures noted above for standard risk subrecipients)
        i. Provide training and technical assistance
        ii. After first year, follow-up/review to determine financial compliance and re-assess risk level
        iii. Consider whether a desk review is necessary

    c. High risk (in addition to procedures noted above for standard and medium risk subrecipients)
       i. Determine whether to audit or perform a site visit or desk review
       ii. Request regular contact and communication with the Normandale PI/PD
       iii. Document conversations and retain pertinent emails
       iv. Withhold payments if necessary

  3. Reporting, Corrective Action, and Follow-Up
    a. As appropriate, Normandale will develop a report identifying observations noted from monitoring procedures and issue the report to subrecipients for
        review and corrective action.
    b. As a result of the monitoring procedures and reporting, Normandale will follow up with subrecipients to determine whether adequate corrective action
        was taken.
    c. In those instances in which subrecipients have not taken adequate corrective action, Normandale will assess the need for potential penalties as
        permitted by the subaward agreement with the applicable subrecipient.
    d. Regarding audit reports received from subrecipients, Normandale will review and issue a management decision to each subrecipient regarding
        corrective action needs, disallowances, and other matters.
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  Procedure History:
Date of Adoption:  4/2/2019
Department Owner:   Grants
Date and Subject of Revisions: 
Next Review Date:  4/2/2023
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