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The Busy Person’s Guide to Subrecipient Monitoring

The Busy Person's Guide - Subrecipient Monitoring

This is the thirteenth section in our thirteen part series on “The Busy Person’s Guide to Grant Management.”

DO YOU MAKE THESE MISTAKES WITH SUBRECIPIENT MONITORING? HERE’S 3 COMMON COMPLIANCE AREAS YOU NEED TO WATCH.

Do you subaward part of the work on your Federal Award? Think that you can’t just give money to your Subrecipients with “no strings attached” or worse, pretend that you aren’t responsible for how they are spending the funds?

Grant recipients have primary responsibility for ensuring their Subrecipients are in compliance with the Federal regulations concerning Grants Management and Cost Principles.

You may hear this referred to as “Subrecipient” or “Subaward” monitoring.”

Busy Person’s Guide to Subrecipient Monitoring

Let’s look at it this way.

The Grant recipient or “Grantee” is the legal entity to which an Award is made.

Therefore, the Grantee is responsible to the Federal Awarding Agency for how the funds are used and for compliance with all applicable Federal regulations.

Next, the Subrecipient is the legal entity to which a Subgrant or “Subaward” is made.

Therefore, the Subrecipient is responsible to the Grant recipient for how the funds are used and for compliance with all applicable Federal regulations.

The Grant recipient takes the place of the Federal Awarding Agency when it comes to monitoring the Subrecipients.

3 common compliance mistakes

There are a variety of items that Grant recipients should be monitoring with their Subrecipients. Grant recipients must be alert to a variety of potential areas of non-compliance with their Subrecipients. Here are three common compliance issues that you should be watching for:

  • 1) Non-competitive practices of Subgrantees and outside contractors
  • 2) Deficiencies in documentation that don’t allow identification of specific expenditures
  • 3) Audit findings that point to compliance issues

5 things to review on Subrecipient spending

Grant recipients are responsible for monitoring, and ensuring compliance in all activities of Subrecipients, with an emphasis on the proper spending of Federal funds. This means that Grant recipient should be reviewing spending by the Subrecipient for make sure:

  • 1) Spending is in line with the approved budget on the sub-awarded work
  • 2) Amounts on invoices calculate and total correctly
  • 3) Sufficient detail is provided to determine what was purchased
  • 4) Additional clarification and documentation is provided for unusual costs
  • 5) Subrecipient is spending in compliance with applicable laws, regulations, and requirements: In other words, are there unallowable costs flowing through on the invoices?

How do I prove I’ve been monitoring Subrecipients?

The Grant recipient must be able to demonstrate to the Federal Agency that Subrecipients are being monitored for compliance. Evidence of Subrecipient monitoring can include such items as reviewing Subrecipient spending for compliance with Federal regulations and reviewing their A-133 Audit reports.

The Grant recipient is also required to retain records which provide evidence of Subrecipient monitoring.

These types of records may contain:

  • 1) Copies of various A-133 Audit reports of Subrecipients
  • 2) Documentation of contract provisions compliance for the Subgrantees and contractors
  • 3) Review of competitive practices in Subrecipient procurements
  • 4) Records supporting efforts to encourage small businesses and minority and women owned enterprises

This area is a favorite compliance area of Federal Agencies! If you are subawarding work, make sure you are also conducting monitoring activities and documenting those activities.

P.S. Here’s even more free information.

Check out the Subrecipient Monitoring Video Lesson.

Length: Approx. 3 minutes

Get your own very cool, one page “Quick Reference Guide: Subrecipient Monitoring.”

(Just click on the link to download the .pdf file.)

P.S.S. Great job! You completed the series!

This is the thirteenth section in our thirteen part series on “The Busy Person’s Guide to Grant Management.”

Ready to dig deeper?

You can find out more about the various types of Administrative Requirements in our Administrative Requirements “Boot Camp.”

For State, Local and Tribal Governments:
http://www.myfedtrainer.com/2011/1200-administrative-requirements-bundle/
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These 8 “Boot Camp” courses cover the main areas related to Administrative Requirements for Recipients of Federal Awards:

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  • Course #2: Preaward Requirements
  • Course #3: Financial Management Systems
  • Course #4: Payment Management
  • Course #5: Other Financial and Program Management Topics
  • Course #6: Property Standards
  • Course #7: Procurement Standards
  • Course #8: Closing Out Awards

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For State, Local and Tribal Governments:
http://www.myfedtrainer.com/2011/1200-administrative-requirements-bundle/
For Non-profit Organizations:
http://www.myfedtrainer.com/2011/1000-administrative-requirements-bundle/
For Institutions of Higher Learning:
http://www.myfedtrainer.com/2011/1100-administrative-requirements-bundle/