This guidance describes the roles and responsibilities to be followed in subrecipient monitoring activities when the University of Louisville Research Foundation Inc. (ULRF) is the Pass-Through Entity (PTE) for sponsored funding. The definitions, guidelines, roles and responsibilities detailed in this document cover subaward administration activities from proposal stage to subaward closeout. This guidance has been developed in alignment with the Uniform Guidance 2 CFR §200.330-332 – Subrecipient Monitoring and Management.

If you have any questions about this page, please contact Brigitte Fasciotto.

• Award: An award is a binding agreement between an external sponsor and the University to support research, instruction, training, service, or other scholarly activities with set terms and conditions.
• Contract: (2 CFR §200.22) A contract is a legal instrument by which a non-federal entity purchases property or services needed to carry out the project or program under a federal award. The term as used in this part does not include a legal instrument, even if the non-Federal entity considers it a contract, when the substance of the transaction meets the definition of a federal award or subaward.
• Contractor: (2 CFR §200.23) A contractor is an entity that receives a contract. Typically, a contractor is a vendor, dealer, distributor, merchant or other seller providing goods or services (i.e., a procurement relationship) that are required for the conduct of an Award.
• Fixed amount awards: (2 CFR §200.45) A fixed amount award is a type of grant agreement under which the federal awarding agency or PTE provides a specific level of support without regard to actual costs incurred under the federal award. This type of federal award reduces some of the administrative burden and record-keeping requirements for both the non-Federal entity and federal awarding agency or PTE. Accountability is based primarily on performance and results. See 2 CFR §200.201 Use of grant agreements (including fixed amount awards), cooperative agreements, and contracts, paragraph (b) and 2 CFR §200.333 Fixed amount subawards.
• Pass-Through Entity (PTE): (2 CFR §200.74) A PTE means a non-Federal entity that provides a Subaward to a Subrecipient to carry out part of a federal program.
• Risk Assessment: A risk assessment is completed for each new subaward or subaward amendment/extension. The risk assessment determines the level of risk associated with doing business with a subrecipient and subsequently to the PTE/University. A risk level is assigned to each subrecipient based on the criteria of the risk assessment and is used to inform subrecipient monitoring requirements for the subaward. Risk assessments are required by federal regulation as outlined in 2 CFR §200.332.
• Sponsor: The party entering into an Award with the University and providing funding to the University either directly (i.e., as a Federal agency) or as a PTE.
• Subaward: (2 CFR §200.92) A subaward is an Award provided by a pass-through entity to a subrecipient for the subrecipient to carry out part of a Federal award received by the pass-through entity. It does not include payments to a Contractor or payments to an individual that is a beneficiary of a Federal program. A subaward may be provided through any form of legal agreement, including an agreement that the pass-through entity considers a contract.
• Subrecipient: (2 CFR §200.93) A subrecipient is a non-federal entity that receives a subaward from a PTE to carry out part of a federal program; but does not include an individual that is a beneficiary of such program. A subrecipient may also be a recipient of other federal awards directly from a federal awarding agency.
• Subrecipient Commitment Form (SCF): SCF is used by the University to capture data related to subrecipients for the purpose of subrecipient monitoring and management. Data requested on this form include subrecipient/entity profile information and project specific details. The SCF requires the signature of an authorized representative of the subrecipient.
• Subrecipient Monitoring: Activities undertaken to review the financial status and management controls of a subrecipient in order to mitigate the risk of doing business with a subrecipient and to ensure that a subaward is used for authorized purposes in compliance with the terms and conditions of the subaward. Subrecipient monitoring is required by federal regulation as outlined in 2 CFR §200.332.

2.1 Subrecipient or Contractor Determination

Before entering into relationships with external entities for goods, services, or substantive work under an award, determinations must be made regarding the nature of the entities’ relationships to the University. This determination is required by federal regulation as outlined in 2 CFR §200.331.

At the time of proposal, the Principal Investigator (PI) makes the initial determination and the Office of Sponsored Programs Administration (OSPA) Proposal Specialist completes the Subrecipient/Contractor Determination Checklist (PDF) in collaboration with the PI. OSPA Proposal Specialist makes the final relationship determination for all evaluated entities. All external entities are evaluated, regardless of their relationship to the University.

For potential contractual relationship with external for-profit entities, the status and standing of the business should be checked by performing a search in the Secretary of State’s website of the State the business is registered.

2.2 Subrecipient Commitment Form (SCF) or Letter of Intent (LOI)

The Federal Demonstration Partnership (FDP) Expanded Clearinghouse website was developed to test the efficacy and efficiency of using an online organization’s profile to obtain information needed by the PTE when performing risk assessments, issuing a subaward, or monitoring subrecipient entities.

Click https://fdpclearinghouse.org/organizations for a list of FDP participating institutions.

* FDP participating institutions are only required to fill out the short Letter of Intent (LOI) (PDF).

* Non-FDP participating institutions are required to fill out the longer Subrecipient Commitment Form (SCF) (PDF).

Required information on the SCF includes:

• Whether or not the proposed project includes human and/or vertebrate subjects;
• Verification that prospective Subrecipients are not debarred or suspended and do not have active exclusions in the System for Award Management (SAM);
• Financial Conflict of Interest certifications;
• Facilities and Administrative (F&A) costs;
• Verification that prospective Subrecipients are in compliance with audit requirements per Subpart F to CFR Part 200, or provide information why they are not subject to the audit requirements per2 CFR §200.501.

A SCF or LOI, signed by the Subrecipient’s authorized official, must be submitted to OSPA at the time of proposal, along with the additional documentation outlined in Section 2.3.

2.3 Other Required Documentation

The following documentation must be provided to OSPA at the time of proposal for each Subrecipient:

*Subrecipient Scope of Work (SOW) – Must outline the work to be performed and accomplished by the Subrecipient during the project period.

*Subrecipient Budget and Budget Justification – The budget should consist of Subrecipient total costs, which includes direct and indirect (F&A) costs, if applicable.

• Direct Costs should be itemized by major cost categories (e.g., salary, fringe benefits, equipment, supplies, travel). Include sufficient justification and basis for each cost element such as established rates or vendor quotes.
• F&A Costs must be based on either:
  • The Subrecipient’s current F&A Rate Agreement with a Cognizant Federal Agency.
  • The De Minimis F&A Rate: (2 CFR §200.414.f). Any non-Federal entity that has never received a negotiated indirect cost rate, except for those non-Federal entities described in Appendix VII to Part 200—States and Local Government and Indian Tribe Indirect Cost Proposals, paragraph D.1.b, may elect to charge a de minimis rate of 10% of modified total direct costs (MTDC) which may be used indefinitely.
  • The sponsor’s imposed F&A Rate.

* Other documentation – As appropriate or as required by the Sponsor.

2.4 Fixed Price vs. Cost Reimbursable Determination

* Cost Reimbursable

Under a cost reimbursable Subaward, the Subrecipient invoices the PTE for expenses incurred under the Subaward and then is reimbursed. The expenses, as always, should be allowable, allocable, and reasonable and Subrecipient invoices should include sufficient detail for subrecipient monitoring and audit purposes.

* Fixed Price

Prior approval from federal sponsors is required if the PTE wants to issue a fixed price subaward. By federal regulation outlined in 2 CFR §200.333, the total cost of each fixed price subaward may not exceed $250,000.

Under a fixed price agreement, various milestones and/or deliverables are established along with a corresponding price for each milestone. Once a milestone is met or a deliverable received and accepted by the PTE’s PI, the Subrecipient may invoice for the corresponding amount due. Invoices for fixed price subawards need not include details of expenses. The first milestone/deliverable may be full execution of the subaward, which can be beneficial when dealing with entities that do not have the resources to incur expenses for later reimbursement.

All fixed price subawards must meet the requirements for fixed amount awards outlined in 2 CFR §200.201.

In order to establish and charge a Fixed Price Subaward to a sponsored program, the cost must be included and fully justified in the approved budget/budget justification or prior sponsor written approval is required.

If it is determined that a “Fixed Price Subaward” should be established, the Subaward section of the PTE proposal’s budget justification should include the following statement: Based upon this justification, the University of Louisville is requesting agency approval for Fixed Price Subaward cost allowed under 2 CFR §200.333.

If a proposal is submitted with the required statement/justification outlined above, and the subsequent award issued by the sponsor does not explicitly disallow the Fixed Price Subaward costs, these costs will be considered approved.

If a new Fixed Price Subaward was not included in the proposal budget and is deemed necessary for the performance of the programmatic objectives of an award, the PI must submit a letter of request to OSPA requesting approval to establish a new Fixed Price Subaward. The request should explain how the new Fixed Price Subaward is integral to the project. The Office of Sponsored Programs Administration will coordinate this request with the sponsor. Prior sponsor written approval is required before the expense can be charged to the sponsored program.

To fulfill the subrecipient monitoring requirements set forth by 2 CFR §200.332, the PTE must perform the following compliance requirements when issuing a subaward.

Many Sponsors require prior approval to include a new subrecipient that was not identified and budgeted at the time of proposal. In this case, the PI must submit a letter of request to OSPA requesting an “after-the-fact” approval to establish a new Subaward. The “after-the-fact” approval from the sponsor must be received (email or letter documentation) prior to establishment of a subaward.

3.1 Administrative Information / Subrecipient Data Elements

The PTE must ensure that every subaward agreement is clearly identified to the subrecipient as a subaward and includes the following information at the time of the subaward. ULRF uses the FDP templates, which address the requirements listed below in paragraphs 3.1.1 to 3.1.5:

- FDP Cost Reimbursement Subaward

- FDP Fixed Amount Subaward

- FDP Foreign Cost Reimbursement Subaward

- FDP Fixed Rate Clinical Research Subaward

3.1.1 Federal Award Identification

At the time of award, the OSPA Award/Negotiation Specialist fills out the Subaward Setup Request Form (PDF) and, except for Cost Reimbursable Subawards, fills out the FDP Attachment 5 form corresponding to the type of subaward agreement to use (Fixed, Foreign, or Clinical Trial); each of the above templates includes a different attachment 5 form. The OSPA Award/Negotiation Specialist then submits the completed form(s) to the OSPA Compliance Specialist – Subaward Administrator.

The following documents must be provided with the Subaward Request Form to facilitate the processing of the subaward agreement:

• Subrecipient/Contractor Determination Checklist
• Subrecipient Commitment Form or Letter Of Intent
• Scope of Work – Final detailed description of the subrecipient’s specific role and scope within the project (to be incorporated in the subaward agreement)
• Budget and Budget Justification – Final detailed budget and narrative (to be incorporated in the subaward agreement)
• Current subrecipient negotiated Facilities and Administrative (F&A) Rate Agreement
• Subrecipient’s Conflict of Interest verification
• Subrecipient’s Regulatory Approval(s), if applicable
• After-the-fact sponsor approval, if applicable
• Prime Notice of Award

3.1.2 Requirements imposed by the PTE on the subrecipient

The University passes through all the Terms and Conditions imposed by the prime award.

3.1.3 Additional requirements

These are requirements imposed on the subrecipient in order for the PTE to meet its own responsibilities to the prime Sponsor including identification of any required financial and performance reports.

3.1.4 Approved indirect cost rate documentation from the subrecipient

A copy of (or link to) the subrecipient F&A rate agreement must be received by the PTE. If no such rate exists, a de minimis indirect cost rate of 10% of MTDC may be used.

3.1.5 Appropriate Terms and Conditions for closeout of the subaward

The Subrecipient needs to submit no later than 90 days after the end date of the subaward (unless a shorter period is required per the subaward Terms and Conditions) a final invoice marked “FINAL” and the Subaward Release Form (PDF) to ensure that the PTE successfully closeout the subaward and receive timely reimbursement from the prime award.

3.2 Risk Assessment

Per 2 CFR 200.332(b) the PTE must “Evaluates each subrecipient's risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring.”

The Risk Assessment Questionnaire (RAQ) is a tool to assist the OSPA Compliance Office in evaluating and assigning a risk level for each subrecipient.

The RAQ is organized into four separate sections:

• Threshold Questions (non-scored)

These questions are intended to quickly identify the highest risk subrecipients: debarred or suspended from receiving federal funds, lack of Conflict of Interest (COI) policy, and/or the existence or not of an established accounting system and acceptable procurement system. “Yes” answers should prompt the PTE to carefully evaluate its ability to issue and successfully manage a project with the subrecipient.

• Other Considerations (non-scored)

These questions are intended to assess risk(s) that may or may not result in additional terms and conditions in the subaward.

• Institutional Questions (scored)

These questions focus on the characteristics of the subrecipient and are independently scored.

• Project Specific Questions (scored)

These questions focus on the characteristics of the project and are independently scored.

The Institutional Questions and the Project Specific Questions are scored independently. This is intentional as there may be an instance where the risk of issuing an agreement to a subrecipient institution is determined to be very low, but the project is determined to be very high risk (or vice versa). The total score is also provided.

The PTE may decide that certain answers given to scored or non-scored questions may prompt an additional set of questions outside of the RAQ, or a broader assessment of risk by means other than a questionnaire.

3.2.1 Considerations for non-scored questions

The PTE may choose to not establish a subaward agreement with a subrecipient if the answer is YES to questions #1 through #3 of the RAQ.

The PTE may choose to not establish a subaward agreement with a subrecipient if the subrecipient is not compliant with federal regulations (if required).

Specific Terms and Conditions will be imposed on a subrecipient if the answers to questions #8 through #15 of the RAQ pose any risk to the PTE. A Management Decision may need to be executed, if the subrecipient single audit contains significant finding(s) that pose(s) a risk to the PTE.

3.2.2 Considerations for scored questions

Specific Terms and Conditions may be imposed on a subrecipient if the answers to the RAQ include any of the following top five risks attributes:

• Foreign subrecipient;
• History of non-compliance from the subrecipient;
• PTE’s work depends upon the subrecipient’s work;
• Subrecipient receives more than 50% of the funds or more than $650,000;
• Subrecipient has less than 4 years’ existence/experience.

3.3 Imposition of Specific Terms and Conditions based on Risk Assessment

Additional or specific Terms and Conditions will be set forth on a case-by-case basis, addressing specifically any elevated risk identified by the RAQ. These may include the following requirements:

• Additional project monitoring requiring monthly or quarterly progress reports. This will ensure that the project is on track (in-line with the SOW) and will allow for any issues related to the project to be addressed.
• The PI may schedule site visit(s) to the subrecipient’s location.
• More frequent and/or more detailed financial reports.
• Submission of detailed invoices, including supporting/backup documentation.
• Periodic desk audit(s) to ensure that subaward expenditures are allowable and in-line with the SOW and budget.
• Imposition of specific Terms and Conditions addressing audit finding(s).

Completed RAQs resulting in a Medium or High Risk level will be reviewed by the Assistant Director, OSPA Compliance Core. Final determination and imposition of specific Terms and Conditions is determined by the OSPA Compliance Core Assistant Director and the Subaward Administrator in consultation with the PI.

Final risk assessments, required Management Decisions (if applicable, as required for adverse audit findings), and determination of specific, additional Terms and Conditions must be shared with all parties that have subrecipient monitoring responsibilities, including the subrecipient’s PI and contact person, the PTE’s PI and departmental contact, the OSPA Award/Negotiation Specialist, and OSPA Financial Administration (SPFA). The notification shall indicate the nature of the additional terms and conditions, the rationale for the additional terms and conditions, the action(s) necessary for removal of the additional terms and conditions, the time allowed for completing the required actions, and the methods for requesting reconsideration of the additional terms and conditions.

The additional Terms and Conditions shall be removed once the deficiencies have been corrected.

3.4 Issuance of Subaward Procedures

3.4.1 Draft of the Subaward Agreement

The OSPA Subaward Administrator drafts the subaward agreement using the appropriate FDP template. The following documents are included in the subaward agreement packet:

• FDP Subaward Agreement and Attachments;
• Detailed Budget (Cost reimbursable agreement) or Milestones (Fixed Price agreement);
• Budget Justification;
• Scope of Work (SOW);
• Prime Notice of Award;

3.4.2 Review and approval of the Draft Subaward Agreement by the OSPA Award/ Negotiation Specialist

3.4.3 Review and approval of the Draft Subaward Agreement by the PI

The PI needs to review and approve the draft subaward agreement. The PI also needs to complete the Subrecipient Monitoring PI Responsibilities Acknowledgement Form (PDF). This form informs the PI of his/her general responsibilities for subrecipient monitoring and about any additional Terms and Conditions imposed on the subrecipient if the assessed risk level is either Medium or High.

3.4.4 Execution of the Subaward Agreement

The OSPA Subaward Administrator obtains the signature of the Subrecipient’s Authorized Official Representative and then obtains the signature of the ULRF Authorized Official Representative. The subaward agreement is effective once both entities have signed the agreement, or as stated within the subaward agreement.

A copy of the fully executed subaward agreement is distributed to the subrecipient, the PI and the departmental contact, and uploaded to iRIS. At this time, the departmental contact receives an instruction sheet on how to enter a requisition in PeopleSoft for a subaward “Reversed PO.”

3.4.5 Subaward Information is entered in the PeopleSoft Contracting Panel

3.4.6 Purchase Order (PO) is generated in PeopleSoft

The departmental administrator enters a requisition in PeopleSoft for the full amount awarded to the subrecipient. Account code 545290 (Sub≤$25K) and 545291 (Sub>$25K) are used, according to the Modified Total Direct Cost (MDTC) regulation. Per 2 CFR 200.68, MTDC excludes the portion of each subaward in excess of $25,000. The requisition is routed to the OSPA Compliance Core for review and approval. Once approved, the Procurement Office reviews and, if approved, issues a “Reversed PO”. All invoices received will then be paid against this PO.

3.4.7 Subaward Information entered in FFATA system, if applicable

As of October 1, 2010, all Federal grants of $25,000 and over are subject to the Federal Funding Accountability and Transparency Act (FFATA) subaward reporting requirements. The PTE is required to enter the subrecipient information in the FFATA Sub-Award Reporting System (FSRS) at https://www.fsrs.gov/index?&.

The FFATA report must be submitted by the end of the month following the month of the full execution of the subaward agreement. It is the responsibilities of the OSPA Subaward Administrator to enter, submit and update the required FFATA information in the FSRS website.

After a subaward has been fully executed, monitoring activities begin. The active amount of monitoring will vary depending of the level of risk identified. Although specific monitoring activities may be assigned on a case-by-case basis (as described above), in general, the following monitoring activities will be performed:

* Low Risk

Review audit reports on an annual basis to determine significance of audit findings and whether they pose an increased risk to the subrecipient’s ability to maintain compliance and meet their responsibilities as defined in the Statement of Work.

Review the subrecipient’s invoices to insure that:

- Work is performed within the project period (and any applicable budget periods);

- Invoices are complete and accurate;

- Expenditures are allowable per subaward’s budget; and

- PI has approved as acceptable for payment.

* Medium Risk

Perform all review steps as listed in the “Low Risk” category in addition to the following:

- Request expenditure detail as supporting documentation for invoices on a monthly or quarterly basis;

- Evaluate documentation received for sufficiency; and/or

- Request and review financial reports more frequently, if deemed necessary.

* High Risk

Perform all review steps as listed in the “Low Risk” and “Medium Risk” categories in addition to the following:

- Request expenditure detail as supporting documentation for all invoices;

- Maintain regular contact with subrecipient’s PI to ensure subrecipient is meeting programmatic expectations. Document communication in Subaward files;

- Exercise the option to audit or consider performing a site visit or desk review; and/or

- Withhold payments to Subrecipient if deemed necessary.

4.1 Subaward Invoices Review and Processing

Subrecipient is directed to send their invoices to the PTE’s OSPA Compliance Core – Subaward service account, consistent with the terms of the subaward.

The OSPA Subaward Administrator verifies the following after receiving subrecipient’s invoices:

• Invoice is received in a timely manner;
• Subrecipient name and subaward ID number;
• Purchase Order number, if available;
• Total amount of subaward is listed and accurate;
• Current and cumulative expenditures are in accordance with the approved budget, including breakdown of costs by major categories;
• Time periods of invoices coincide with the previous invoices (they generally should not overlap, have gaps in time or exceed the project end dates);
• Cumulative expenditures of invoices coincide with the previous invoices (the cumulative expenditures of the previous invoice plus the current period expenditures of the current invoice should match with the cumulative expenditures of the current invoice)
• Invoice includes the following certification, if applicable, signed by an official, as required by 2 CFR 200.415(a): “By signing this report, I certify to the best of my knowledge and belief that the report is true, complete, and accurate, and the expenditures, disbursements and cash receipts are for the purposes and objectives set forth in the terms and conditions of the Federal award. I am aware that any false, fictitious, or fraudulent information, or the omission of any material fact, may subject me to criminal, civil or administrative penalties for fraud, false statements, false claims or otherwise. (U.S. Code Title 18, Section 1001 and Title 31, Sections 3729-3730 and 3801-3812).”
• F&A rates are calculated correctly and are the approved rates;
• Cost sharing and match commitments are documented on the invoices;

The OSPA Subaward Administrator completes the top section of the Subaward Payment Authorization Form (PDF) and forwards it, along with the invoice, via email to the PI and the administrative contact.

Upon receipt of the invoice, PI must review to confirm that:

• Information entered in the top section of the form by the OSPA Subaward Administrator is correct;
• All expenditures are necessary, reasonable, and allocable to the project;
• All expenditures are in alignment with the technical progress;
• Invoice is approved for payment.

If PI determines there are concerns with one or more invoices related to the performance of the work, PI should contact the subrecipient’s PI to discuss the concerns and note them in the Comment section of the Payment Authorization Form.

PI must complete and sign Section #1 of the Subaward Payment Authorization Form (PDF). The form and the invoice are then emailed back to the OSPA Subaward Administrator for approval.

The OSPA Subaward Administrator verifies that the “Receipt of written Technical and/or Performance report” box is checked if a performance/progress report is due during that period.

If there are concerns, the OSPA Subaward Administrator contacts the subrecipient for clarification or additional documentation. No invoices will be approved for payment until all issues have been resolved. If concerns cannot be reasonably resolved or if the same concerns repeatedly occur, OSPA Compliance Office may re-evaluate Subrecipients’ risk level.

Once approved, the OSPA Subaward Administrator posts a receiver in PeopleSoft for the amount invoiced and submits the invoice and the completed Subaward Payment Authorization Form (PDF) via email to the Controller’s Office (acctspay@louisville.edu) for payment.

4.2 Subaward Performance/Progress Reports Review

This section provides guidance for reviewing performance/progress reports. When reviewing performance/progress reports, the PI should:

• Ensure progress reports are received based on the terms and conditions of the subaward.
• Verify that the work conducted and the results are in line with the proposed scope of work.
• Review progress reports (may include a detailed budget for the next budget period, updated key personnel) as well as IRB or IACUC approvals, if applicable.
• Ensure changes or updates are addressed, as required.
• Communicate with the subrecipient if there are concerns or questions with regard to the reports provided.

4.3 Annual Audit Reviews

Business Analytics/IT provides the OSPA Subaward Administrator with a report that identifies all subawards for the given fiscal year.

On an annual basis, the PTE conducts a review of each Subrecipient’s annual audit. This Process assists the PTE in evaluating the subrecipient’s financial stability, processes, and internal controls.

• For subrecipients subject to Single Audit, the OSPA Subaward Administrator obtains the current Single Audit report via the Federal Audit Clearinghouse (Harvester) or via the Subrecipient’s website. The OSPA Subaward Administrator reviews the Single Audit report for any relevant finding(s) to determine if a Subrecipient Corrective Action Plan (PDF) (CAP) needs to be implemented (see section 4.5 for details). If the Single Audit report is not available by March 1^st, the OSPA Subaward Administrator sends the Subrecipient Annual Compliance Questionnaire to the subrecipient and request a copy of the most recent Single Audit.
• For subrecipients not subject to the Single Audit, the OSPA Subaward Administrator will send the Subrecipient Annual Compliance Questionnaire to the subrecipient and request copies of any relevant external audits.

4.4 Subaward Modification and Continuation

• Modification requests to existing subawards must be directed to OSPA at OSPA@louisville.edu.
• The OSPA Award/Negotiation Specialist reviews the requested modification. Some modifications may require prior approval by the sponsor.
• The OSPA Award/Negotiation Specialist completes the Subaward Setup Request Form (PFD) and submits the completed form along with all applicable required documentation to the OSPA Subaward Administrator.
• The OSPA Subaward Administrator completes the Continuing Assessment Tool (CAT) (see details in section 4.5 below) and determines if there is any change in the subrecipient’s risk level.
• The OSPA Subaward Administrator drafts the subaward agreement or amendment using the appropriate FDP template. The draft agreement or amendment is reviewed by the OSPA Award/ Negotiation Specialist and by the PI. Once all parties approve, the draft agreement or amendment is sent to the subrecipient for review and signature by an Authorized Official Representative. Upon receipt, review and approval of returned subaward agreement or amendment, the ULRF’s Authorized Official Representative signs, constituting full execution of the agreement or amendment. Copies of the fully executed agreement or amendment are then provided electronically to the PI and the subrecipient institution.

Continuing Assessment Tool

The Continuing Assessment Tool (CAT) is a tool that assists the Compliance Core in determining that everything is progressing smoothly or in uncovering issues related to the subaward. If any issues have arisen or major changes have transpired, the PTE may need to consider why the issues or changes have occurred and if any action should be taken as a result. The CAT also offers a mechanism for documenting actions taken and the reasoning behind them.

The CAT is intended to be used during the period of performance of the subaward. A natural time to complete the CAT would be prior to issuing a subaward modification.

The questions in the CAT are not scored. The expectation is that an initial risk assessment (with scores) was performed at the time of original subaward issuance. During the life of the subaward, the focus should be largely on performance.

The CAT is organized into four separate sections:

• General Considerations

This section contains questions that can be asked related to any subaward agreement.

• Project Specific Considerations

This section contains questions that can be asked for subawards that involve cost-sharing or participant support costs, either of which may warrant special attention.

• Monitoring Plans Considerations

This section contains questions that may be asked for subawards that previously necessitated additional requirements, conditions, or corrective actions.

• Foreign & For-profit Subrecipient Considerations

There is a separate section for for-profit and foreign subrecipients because these types of entities may merit special consideration and present unique concerns. In question #10, “materially” is defined by institutional policy, which may follow Federal guidance.

After completing the previous sections, the PTE makes a determination as to whether or not to change the level of monitoring for the respective subaward (that is, to be either more or less stringent going forward). If the answer is yes, the PTE will use the Notes section to capture the explanation of why and how.

If any of the responses in one of the four left-hand sections require explanation, that explanation is entered into the Notes section. The information provided should indicate the question to which it correlates. For example, "#3 - Audit included finding unrelated to R&D cluster. Finding related to student financial aid, which should not impact this subaward agreement." This is the place to describe in further detail what has been learned about the subaward, why it is important, and what, if any action needs to be taken. If no action is necessary, an explanation is provided.

4.5 Subrecipient Corrective Action Procedures

Subrecipients are subject to periodic reviews in the forms of audits and monitoring to assure compliance with all applicable requirements. Such reviews may result in the identification of “Findings of Non-Compliance.”

“Findings of Non-Compliance” may originate from single audit reports, desk or field compliance reviews. Findings represent operational deficiencies or errors, material program weaknesses or unacceptable program liabilities that may result in questioned sponsored program costs or, collectively characterize a significant risk to program integrity.

The Subrecipient Corrective Action Plan (PDF) (CAP) provides instructions to the subrecipient regarding requirements for corrective action(s) relative to reviewed “Findings.” Whenever a finding is issued, the Subrecipient is required to formally respond and demonstrate that the subrecipient proposed and/or completed corrective actions. By answering such questions, the subrecipient develops a plan that provides detailed information for the activities either completed or planned to address the issue(s) referenced in the finding.

For Non-Compliance findings that have not been resolved, laws and regulations permit the PTE and the subrecipient to enter into a formal compliance agreement that is represented by the subrecipient’s Corrective Action Plan (CAP). An approved CAP allows the PTE to suspend enforcement actions, pending resolution of outstanding findings. The PTE is obligated to resume enforcement actions if the subrecipient does not resolve the Non-Compliance findings before the end of the CAP.

In order to determine if the subrecipient’s CAP is sufficient, the CAP must:

- Identify the original finding(s) of Non-Compliance, including specific identifiers listed in the report (e.g., Finding #1) and the terms of non-compliance.

- Identify the subrecipient staff responsible for corrective action, including title and complete contact information.

- Describe the specific corrective action taken (or to be taken) for each Finding.

- Show the planned completion date for each major activity.

- Include documentary evidence to verify compliance of findings that have been resolved.

- Include the signature of an authorized official of the subrecipient.

When the CAP is received, the PTE will determine whether the plan reasonably and sufficiently addresses the Non-Compliance findings. The PTE will notify the subrecipient if the CAP is approved, or, if further information or documentation is required.

For each Finding where the subrecipient has proposed planned activities, resubmition of the CAP prior to the end date may be required, indicating that planned activities have been completed along with certification that the subrecipient is now compliant, along with the applicable date(s) and documentary evidence to verify compliance.

4.6 Remedies for non-compliance

If the Subrecipient fails to comply with the subaward’s Terms and Conditions including reporting and invoicing requirements, or does not fulfill its Corrective Action Plan, the PTE may impose sanctions upon the Subrecipient including, but not limited to, withholding of payment, suspending or terminating the subaward, or other remedies legally available (2 CFR §200.332(h)).

5.1 Early Termination

Early termination of a subaward agreement may occur for a number of reasons. Reasons for early termination include, but are not limited to:

1. Failure of the subrecipient to perform,

2. Subrecipient’s PI becomes unable or unwilling to continue,

3. PI transfers to another institution,

4. Subrecipient’s PI transfers to another institution,

5. Termination by the project’s prime sponsor.

If the PI decides that the subaward agreement will not be renewed or needs to be terminated, the PI will notify OSPA of this determination. The OSPA Award Specialist/Negotiation Specialist will review the Terms and Conditions set forth regarding the termination of the subaward agreement and make a determination if an amendment needs to be completed to shorten the project period or to reduce the project funding for the subaward agreement.

With regard to failure to perform, the PI and OSPA should retain documentation supporting the lack of performance by the subrecipient (for example, by not approving invoices because of inadequate progress) and communications with and efforts to correct the situation.

If the prime sponsor terminates the project, the PTE should represent the subrecipient’s interests towards a fair and orderly closeout and settlement. The subaward agreement provisions will typically allow for payment of all non-cancelable costs, if applicable, prior to the date of termination. In early termination situations, the prime sponsor usually still requires the submission of all reports. Therefore, closeout procedures will be very similar, if not identical, to the procedures followed if the project had continued to the projected subaward end date.

5.2 Subaward Closeout

Due to the strict enforcement of the 120-day award closeout deadline (2 CFR §200.344), the subrecipient’s final invoice must be received by the due date, according to the Terms and Conditions of the subaward agreement. Therefore, the PI may want to remind the subrecipient to submit the final invoice marked “FINAL” by the due date. Additionally, the subrecipient needs to submit to the OSPA Subaward Administrator the Subrecipient Release Form (PDF).

When the final invoice is received, the PI must certify that all technical reports and /or deliverables have been received and that the subrecipient has fulfilled its obligations. Final verification of technical completion by the subrecipient is documented by the PI’s signature and date on the Final Subaward Payment Authorization Form (PDF).

A subaward is generally considered closed when all deliverables have been met and the final payment has been made. The OSPA Subaward Administrator will then close the subaward in PeopleSoft.

All files related to the subrecipient’s performance and administrative and financial management of the subaward must be retained for a minimum of three (3) years after submission of the final financial report to the prime sponsor. See the University’s Retention Policy for additional information.

The following Roles and Responsibilities chart serves as a reference for UofL Principal Investigators (PI), designated department administrative personnel (Dept Admin.), the Office of Sponsored Programs Administration (OSPA) Proposal Core, Award Core, Negotiation Core, Compliance Core – Subaward Administrator and the Subrecipient to assist in the development and management of subawards.

P = PRIMARY

S = SECONDARY