Subs with Extras: PostAward Administration Including Subrecipient Monitoring Issues

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Subs with Extras Post-Award Administration
Including Subrecipient Monitoring Issues

• Tom Egan
• Assistant Director
• OSP Research Subawards Office
• Massachusetts Institute of Technology
  tegan_at_mit.edu

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• Invoicing and management
• Subrecipient Monitoring
• Closeout and Audit

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FORMAT OF INVOICES

• Specify level of detail and how often in
  subrecipient agreement
• Normally includes current month and cumulative
• Salaries - Equipment
• MS - F A
• Travel - Totals
• Cost sharing

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APPROVALS AND MONITORING

• Who approves subrecipient invoice?
• Principal investigator programmatic goals
• Sponsored programs/Procurement/Accounting
  administrative/financial

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COST-SHARING ISSUES

• What did the proposal promise?
• What is in subrecipient agreement?
• What documentation?
• Who monitors?

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SUBRECIPIENT MONITORING

• What are the OMB requirements for subrecipient
  monitoring?
• OMB Compliance Requirements
• Attachment M Subrecipient Monitoring
• The March 2004 Compliance Supplement was revised
  to clarify OMBs expectations related to
  subrecipient monitoring.
• Annual request for subrecipients A-133 report is
  not sufficient.
• On-going review and oversight are expected and
  may include
• -Reviewing financial and performance
  reports
• -Performing site visits to review information
  and observe operations
• -Regular contact and appropriate inquires

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How do you evaluate risk?

• Four Classes of Subrecipients
• Not-for-profits with Federal expenditures in
  excess of 500,000
• Not-for-profits with Federal expenditures less
  than 500,000
• Non-US-based entities
• For-profit entities

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Subrecipient MonitoringNot-for-profits gt
500,000

• Well-defined in OMB Circular A-133
• Review of the entitys A-133 Audit
• Options Web, Report, confirmation
• Look for items that affect subrecipients
• Significant items not directly affecting
  subrecipients should be investigated
• When identified, issues should be resolved in a
  timely manner

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Subrecipient Monitoring Not-for-profits lt
500,000

• Entities receiving less than 500,000 in total
  Federal monies are not required to receive an
  A-133 audit
• Prime recipient should require the subrecipient
  to confirm in writing that they did not receive
  over 500,000

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Subrecipient MonitoringNon-US-based
For-profits

• Prime should perform a risk assessment before
  award is granted
• Key policies governing internal controls should
  be examined
• Visit to the subrecipients place of work to
  assess control environment
• Other audits and reporting
• Development of a plan to monitor
• Remember this is based upon Risk
• Final Step Document the risk assessment.
• i.e. Memo-to-File

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Subrecipient MonitoringA-133 Audit Report Review

• Research and review results of subrecipients OMB
  Circular A-133 audit reported in the Federal
  Audit Clearinghouse. Information presented
  within the Clearinghouse is relied upon as
  sufficient evidence of compliance with the
  provisions of OMB Circular A-133 if the
  organization
• Receives an unqualified opinion on the financial
  statements
• Receives an unqualified opinion on internal
  controls
• Has no material weaknesses reported
• Has no reportable conditions related to Federal
  awards

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Subrecipient MonitoringA-133 Audit Report Review

• For subrecipients not listed in the Federal
  Audit Clearinghouse, the Research Administrator
  should make inquiries by forwarding a
  confirmation request letter to determine whether
  an audit was required and, if so, the status of
  the audit.
• Retain copy of inquires and make subsequent
  inquiries as needed to acquire audit information.

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Subrecipient MonitoringA-133 Audit Report Review

• For the subrecipients that are not subject to an
  OMB circular A-133 audit, employ the most
  cost-effective method of monitoring.

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Subrecipient MonitoringA-133 Audit Report Review

• For subrecipients that are identified with a
  reportable condition, gain an understanding of
  relevant findings or questioned costs stated in
  the Federal Audit Clearinghouse and/or request a
  copy of the subrecipients A-133 report with all
  appendices.

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Subrecipient MonitoringA-133 Audit Report Review

• Evaluate for materiality any findings or
  questioned costs.
• Consider the impact of any corrective action plan
  as well as other related actions undertaken by
  subrecipient management.
• Notify the proper administrative departments of
  those findings and questioned costs determined to
  have a material impact on Federal awards.

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AMENDMENTS AND MODIFICATIONS

• Financial (obligate/deobligate funds)
• Programmatic (SOW or deliverables)
• Administrative (flow-down changes to prime award)
• Should not be verbal between technical agents

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CLOSEOUT AND AUDIT

• Close subaward before closing prime
• Documentation
• Assistance awards
• Contract awards
• Audit

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ASSISTANCE AWARDS CLOSEOUT

• Final invoice
• Final technical report
• Final invention report
• Final property report
• PI certification
• Technical aspects
• Expenditures reasonable

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CONTRACT AWARDS CLOSEOUT

• Subcontractors certification
• Subcontractors release
• Subcontractors assignment of rebates, credits,
  other amounts
• Final Subcontracting Report for Individual
  Contracts (Formerly Standard Form 294), if
  required

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AUDIT RESPONSIBILITIES

• Prime set forth formal procedures for audit and
  monitoring
• Certificate of compliance with A-133 compliance
• Documentation for subrecipients not subject to
  A-133

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COST-PRICE ANALYSIS

• Assessment required of total costs
• Desk review
• Risk assessment
• Amount of agreement
• Subawardees performance on other awards
• Type of subrecipient organization
• Formal audit over 500 K

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STEPS IN DESK REVIEW

• Compare and verify FA
• Within total cost of subrecipient agreement
• Review for reasonableness, accuracy
• Review for cost sharing
• Confirm programmatic work completed
• Issue management decision/follow up
• Determine whether repayment and adjustment to
  pass-through entitys records appropriate

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AUDIT STEPS

• Verify FA rate
• Review most recent A-133, where appropriate
• If not subject to A-133, you may need to request
  assist audit or perform audit yourself

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QUESTIONS AND COMMENTS
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REFERENCE DOCUMENTS

• OMB Circular A-21
• OMB Circular A-110
• OMB Circular A-133
• FDP Subrecipient Template
• Catalog of Federal Domestic Assistance (CFDA)

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WEB SITES

• FDP Homepage http//TheFDP.org/
• Lists of Parties Excluded from Federal
• Procurement Nonprocurement Programs
• http//www.arnet.gov/epls/
• FDP Subaward Demonstration Project
• FDP Subaward Agreement Forms
• http//www.rtto.psu.edu/spa/subawards/subdemo.htm
• Federal Audit Clearinghouse http//www.harvester.
  census.gov/sac/
• MIT Office of Sponsored Programs
  http//web.mit.edu/osp/www

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FEDERAL AUDIT CLEARINGHOUSE
http//harvester.census.gov/sac/dissem/accessoptio
ns.html?submitRetrieveRecords
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Subrecipient Monitoring A-133 Audit Report Review
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Subrecipient Monitoring A-133 Audit Report
Review
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Subrecipient Monitoring A-133 Audit Report
Review
MITs request for more detailed information
regarding the subrecipients audit findings
and/or reportable conditions
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Subrecipient Monitoring Subrecipient Info
Gathering Letter
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AUDITS