REG - 50.03.13 Subrecipient Monitoring

1.  Purpose 

When including subrecipients in a proposal, the federal government requires the University monitor the activities and expenditures associated with the relationship.  This monitoring should assist the University and the subrecipient in remaining in compliance and safeguarding the funding entrusted to the University and the subrecipient for the agreed upon purpose.  

2.  Scope 

This regulation applies to any grant or contract awarded to the University that includes a subrecipient.  The Principal Investigator and/or the Co-Principal Investigator(s) assigned to the award have primary responsibility for ensuring the University’s compliance with this regulation.

3.  Risk Assessment

3.1   Departmental and University Level

3.1.1   The Principal Investigator will determine if the proposed subrecipient can support the complexity required to execute the project as described in the Statement of Work. This determination should be based on the Principal Investigator’s experience with the subrecipient project director and may include previous collaborative work history between the Principal Investigator and the subrecipient project director.  

3.1.2   Risk Assessment

The Office of Sponsored Research and Programs will conduct a risk assessment of the subrecipient on behalf of the University. The subrecipient will be assigned a level of Low, Medium or High risk based on the following considerations, including but not limited to:

3.1.2.1   Organization status with the government (e.g. SAM registration);

3.1.2.2   Capacity of the subrecipient;

3.1.2.3   Administrative complexity of the project;

3.1.2.4   Experience of the subrecipient and/or project director; and/or

3.1.2.5   Verify if the potential subrecipient is on any state and/or federal debarment list.

3.1.3    Risk Rating 

3.1.3.1    Following the risk assessment, the subrecipient will be assigned a risk rating (High, Medium, or Low) and a monitoring plan will be implemented based on the rating. 

3.1.3.2.1  Low Risk – The subrecipient shall be monitored for compliance with programmatic and financial reporting requirements, including confirmation from the project director of satisfactory progress at annual increments for multi-year awards prior to issuance of subsequent year amendments.

3.1.3.2.2  Medium Risk - A sample of subrecipient invoice(s) will be selected for further review.  Subrecipients will be asked to provide supporting documentation for all expenditures shown on a selected invoice, including appropriate Time and Effort (“T/E”) certifications for direct salary expenditures. In the event T/E certification is not complete for the selected invoice at the time of the request, the subrecipient will be required to demonstrate the subject personnel are set-up for time and effort reporting for the period in question. In the event a subrecipient fails to provide adequate documentation in a timely manner, or cannot produce documentation to support expenditures on the selected invoice, the NCCU Office of Sponsored Research and Programs (“OSRP”) Director and the Principal Investigator will develop a corrective plan of action. The corrective plan of action may include:

3.1.3.2.2.1  Required submission of all supporting documentation with each claim for reimbursement;

3.1.3.2.2.2  Modification of contract terms and conditions; and

3.1.3.2.2.3  Site Visits.

3.1.3.2.3   High Risk - A communication plan will be developed in collaboration with the Principal Investigator. The plan will feature a pre-award briefing with the subrecipient project director and appropriate administrative staff and quarterly meetings thereafter, via telephone conference or in-person. Additional monitoring activities or requests for documentation may include:

3.1.3.2.3.1  Requiring supporting documentation for all expenditures presented on invoices;

3.1.3.2.3.2  Conducting a review of the subrecipient financial management systems to ensure funds can be segregated and expenditures attributed to the funds received;

3.1.3.2.3.3  Conducting a review of the subrecipient financial and administrative policies and procedures to ensure to determine if adequate internal controls are in place; and

3.1.3.2.3.4  Conducting a review of the description of roles/responsibilities of subrecipient project director and staff to ensure adequate segregation of duties are in place. 

3.1.3.2   A subrecipient will be monitored using the plans of action developed by the University of North Carolina – General Administration as a guidance for NCCU.

3.1.3.3   In order to continue to serve as a subrecipient on grants by the University, a subrecipient will be required to comply with the monitoring plan.  If a subrecipient fails to comply with the monitoring plan, the University may choose to remove the subrecipient from the grant.

4.   All Subrecipients

4.1    Prior to the issuance of a subaward, the Office of Sponsored Research and Programs will ensure the following documents are on file: 

4.1.1   Letter of Intent (from the subrecipient Authorized Official);

4.1.2   Statement of Work;

4.1.3   Budget and Budget Justification; and

4.1.4   Indirect Cost Rate Agreement.

4.2      The documents included in Section 4.1 of this regulation will be incorporated into the actual subaward agreement in addition to the prime award and terms and conditions from the funding agency.  

4.3   At the end of each fiscal year an A–133 audit confirmation and questionnaire is collected from subrecipients who received funding from the University in the preceding fiscal year. In the event a subrecipient discloses material findings relative to its subaward or relative to critical business practices that effect all transactions, the OSRP Director and the Principal Investigator, will develop a corrective plan of action. 

5.  Performance Monitoring

5.1         Primary Responsibilities

5.1.1      Principal Investigators are responsible for monitoring subrecipients to ensure responsible stewardship of funds and work performance including:

5.1.1.1   Endorsing the subaward – funding level, performance period and statement of work;

5.1.1.2   Certifying the work performed by the subrecipient is thorough and acceptable (to the best of the Principal Investigator’s knowledge);

5.1.1.3   Maintaining regular contact with the subrecipient Principal Investigator (PI) regarding all technical aspects of the project; 

5.1.1.4   Reviewing and approving subrecipient invoices in a timely manner; and

5.1.1.5   Immediately notifying the Office of Sponsored Research and Programs of any issues and/or concerns.

5.1.2   The Office of Sponsored Research and Programs is responsible for monitoring the subaward to ensure responsible stewardship of funds. These responsibilities include:

5.1.2.1   Authorizing the subaward, including ensuring organizational compliance and risk assessment; 

5.1.2.2   Reviewing and submit subrecipient invoices for payment after Principal Investigator approval;

5.1.2.3   Reviewing invoices, by answering the following questions:

5.1.2.3.1  Are invoiced amounts within the approved performance period?

5.1.2.3.2  Is there enough funding available?

5.1.2.3.3  Has the cost share been included (if applicable)?

5.1.2.3.4  Is the indirect cost being charged correctly? 

5.1.2.3.5  Are the charges allowable?

5.2    Once the Office of Sponsored Research and Programs has finished its review, the signed invoice is sent to Accounts Payable for processing and payment.