1307 Subrecipient - Establishing, Managing, and Monitoring

Policy Sections

1307.1 Pre-Qualification of Subrecipients

1307.2 Subawards Under a Federal Prime Award: Required Data Elements

1307.3 Subrecipient Monitoring

1307.4 Subrecipient Prepayments

This document applies to all subawards issued under sponsored awards that are issued to Yale University regardless of the primary source of funding. (For additional information, see Procedure 1307 PR.01 Establishing Subrecipients Associated with Sponsored Programs, Procedure 1307 PR.02 Managing Subrecipient Activity Associated with Sponsored Programs, and Procedure 1307 PR.03 Monitoring Subrecipient Activity Associated with Sponsored Programs.)

This policy does not apply to professional services and consultant agreements (see Policy 3210 Purchase Contracts) nor does it apply to the procurement of goods or services from suppliers.

Policy Statement

A Yale University relationship with a subrecipient is documented in a formal agreement that is negotiated on behalf of Yale University by the Office of Sponsored Projects (“OSP”) and an authorized representative of the subrecipient organization.

Further, it is Yale’s responsibility to monitor the programmatic and financial activities of its subrecipients to ensure:

• The proper stewardship of sponsor funds;
• Performance goals (scope of work, specific aims, and/or deliverables) are achieved/received; and
• Compliance with the terms and conditions of the subrecipient agreement.

If a Yale Principal Investigator (“PI”) has a Significant Financial Interest (“SFI”) in the subrecipient entity, the PI will disclose the SFI to Yale’s Conflict of Interest Office and, when appropriate, the SFI will be managed by the Provost’s Committee on Conflict of Interest.  (See Yale University Policy on Conflict of Interest, Appendix A, for the definition of “Significant Financial Interest.”)

This policy informs the Yale community of its obligation regarding the proper monitoring and stewardship of sponsored funds when those funds are used to issue a subaward to a subrecipient.

As a condition of an award made to Yale, the University is obligated to comply with applicable federal, state, and local regulations.  When the University assigns responsibility to a subrecipient for conducting a substantive portion of the work under a Yale award, the University remains responsible to the sponsor for the management of funds and meeting performance goals.  Thus, the monitoring of technical and financial activities associated with a subrecipient is an integral part of the University’s stewardship of sponsor funds.

Subaward

A subaward (also referred to as a subgrant or subcontract) is an award of financial support from a prime awardee or pass-through entity (“PTE”) (e.g., Yale) to a qualified organization for the performance of a substantive portion of the programmatic effort under the prime award.  The term also includes awards made by a subrecipient to a lower tier subrecipient.  It does not include procurement of goods and services purchased under an award, as the providers of these goods and services have no programmatic responsibility.  Nor does it include payments to an individual who is a beneficiary of a federal program.  A subaward may be provided through any form of legal agreement, including an agreement that the prime awardee or PTE considers a contract.

Subrecipient

A subrecipient (also referred to as a subawardee or subcontractor) is the legal entity to which a subaward is issued and is accountable to Yale for the use of the funds to conduct a substantive portion of Yale’s programmatic effort under a sponsored project.  Typical subrecipients of Yale include institutions of higher education, for-profit corporations, not-for-profit entities, and foreign or international organizations.  It does not include an individual who is a beneficiary of such program.

Subrecipient Monitoring

Subrecipient monitoring includes those activities undertaken by Yale to review and monitor the subrecipient’s completion of the scope of work, as well as its financial stewardship of the funds the subrecipient received under the subaward.  This activity is intended to mitigate any financial and programmatic risk.

The University assesses the subrecipient’s financial status and internal controls.  Based on this evaluation, Yale determines the appropriate monitoring strategy, which is reflected in the terms and conditions of the subrecipient agreement.  The strategy is consistent with the level of risk determined by the University (see Procedure 1307 PR.01 Establishing Subrecipients Associated with Sponsored Programs).

For subawards issued under a federally funded prime award, Yale must ensure that every subaward is clearly identified to the subrecipient as a subaward and includes the data elements, as required by 2 CFR Part 200.332.  If at the time of issuing the subaward, any of the data elements are not available, Yale must provide the best information available to describe the Federal award and subaward.  If any of the data elements change after issuing the subaward, the changes will be included in a subaward modification.  The required data elements for all subawards under a federal prime award are outlined in 2 CFR Part 200.332.

The University shall perform monitoring activities (refer to Procedure 1307 PR.03 Monitoring Subrecipient Activity Associated with Sponsored Programs for specific monitoring activities) with regard to its sponsored awards involving subrecipients to ensure appropriate fiduciary responsibilities, regulatory compliance responsibilities, and technical/programmatic progress are met in accordance with the prime award.

The University’s preferred method of payment to a subrecipient is on a cost reimbursable basis.  Under certain unusual circumstances and with an acceptable justification (e.g., a financially constrained entity in a foreign country), a subrecipient may request and receive a prepayment (refer to Procedure 1307 PR.02 Managing Subrecipient Activity Associated with Sponsored Programs for specific details on prepayments).  If there is a balance from a prepayment that is not returned to the University, the department is responsible for absorbing that amount.

Office of Sponsored Projects

• Performs a subrecipient risk assessment at the time a subaward is made, which includes ensuring that the subawardee meets federal regulations and determining that the identified risk level is manageable.
• Ensures that all required data elements are included in the subaward.
• If a subrecipient’s risk is determined to not be low, OSP manages the mitigation and/or escalation process, as necessary.
• Engages in ongoing review and monitoring of subawards to assess any change in risk.
• At the time of proposal, ensures External Interests Disclosure form(s) is/are on file. 
• Using appropriate guidelines and regulations, determines whether a proposed subawardee is a subrecipient or consultant.
• Provides Department Business Offices/Faculty Research Management Services (“FRMS”) (hereinafter collectively referred to as “DBOs”) and PIs with training and guidance to better understand their roles.

Principal Investigator

• Identifies a qualified entity to carry out part of the funded project and, with the assistance of their DBO, ensures that such entity submits all required documentation to OSP prior to Yale’s proposal submission, updates at JIT, or in advance of issuing a subaward and meeting non-NIH sponsor requirements.
• Monitors the technical progress of a subrecipient’s performance as defined in the Statement of Work of the subaward.
• Reviews and approves subrecipient invoices in a timely manner consistent with relevant terms and conditions of the award and verifies that claims are consistent with technical/progress reports, the project requirements, and received deliverables.
• Notifies OSP and DBO immediately if there is a performance problem with a subrecipient or the need to add/reduce funding, extend the performance period, or terminate the subaward.
• Obtains and retains all required deliverables, including but not limited to, final technical and interim progress reports, patent/invention documentation, and equipment reports in accordance with sponsor and University policy.
• If appropriate, may delegate tasks to DBOs to support their work.