Overview

As the recipient of a federally sponsored award (“sponsored project”), the Research Foundation, CUNY (RFCUNY) on behalf of the Colleges of The City University of New York (CUNY) must comply with the guidance outlined in OMB’s “Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards.”

RFCUNY is responsible for financial and programmatic monitoring of sponsored project funds awarded to CUNY that are subawarded to another institution or organization (“subrecipient”). RFCUNY may award financial assistance to a collaborator to facilitate performance of and payment for specific work to be conducted by such subrecipient in connection with the sponsored project (subaward).

As condition to its acceptance of funding from a sponsor, RFCUNY is obligated in its role as the prime awardee to undertake certain stewardship activities and ensure compliance by the subrecipient with all applicable laws and regulations, and with the restrictions placed upon the award by the sponsor. RFCUNY will use reporting, regular contact, site visits, and other means to provide reasonable assurance that the subrecipient administers awards in compliance with such provisions and that contract performance goals are achieved.

Scope

This procedure applies to all federal subawards issued in connection with sponsored projects administered by RFCUNY on behalf of CUNY.

Objectives

This procedure seeks to:

  • Ensure risks associated with a subaward or a subrecipient are identified and managed when granting a  subaward;
  • Promote compliance with all applicable laws and regulations relating to subrecipient monitoring;
  • Assign appropriate responsibility and accountability for the establishment and management of subawards; and
  • Ensure sponsor funds are appropriately spent and that CUNY and its sponsors receive value for funds expended.

Definitions

Award

An award is financial assistance in the form of a grant or contract with a defined scope of work that provides support to accomplish a set purpose.

Pass-through Entity

A pass-through entity is a non-federal entity that provides an award of federal funds to a subrecipient to carry out the programmatic activities of a sponsored project.

Subaward

A subaward is an award of financial assistance from a prime awardee (e.g., RFCUNY) to a qualified organization or individual for the performance of a substantive portion of the programmatic effort under the sponsored project. 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.

Subrecipient

A subrecipient is a legal entity (also referred to as a subawardee) to which a subaward is made and which is accountable to the recipient (e.g., RFCUNY) for the use of funds provided to carry out a portion of the programmatic effort under a sponsored project. It may include institutions of higher education, for-profit corporations, not-for-profit entities, and foreign or international organizations. A subrecipient may also be the recipient of other Federal awards directly from a federal awarding agency.

Subrecipient Monitoring (Pre-Award, Post-Award)

Subrecipient monitoring includes the oversight of activities undertaken by the prime recipient (e.g., RFCUNY) that provides reasonable assurance that subawards are being administered in compliance with laws, regulations, and the provisions applicable to the grant or contract agreement.

Contract

Contracts cover goods or services purchased that do not provide a substantive portion of programmatic effort of the sponsored project. Generally, the contractor provides the services commercially, operates in a competitive environment, and retains no rights to intellectual property.

Roles & Responsibilities

Principal Investigator (PI)

The PI should complete the Checklist to Determine Subrecipient or Contractor Classification form prior to requesting a subaward agreement from RFCUNY’s Office of Legal Affairs. The Grants Officer (GO) may assist the PI with this process. Once a subaward is issued the PI is responsible for monitoring the ongoing activity of the subrecipient to ensure the statement of work is being satisfactorily completed within budget. The nature and degree of monitoring is dependent on a variety of factors including, but not limited to, the complexity of the program, the percentage of the award passed through to the subrecipient, the amount of the award passed through to the subrecipient, the amount of risk undertaken by the subrecipient as compared to the overall project, and any previous audit findings. The PI is responsible for review and approval of all subrecipient invoices, reports and deliverables.

If deliverables are not received in a timely manner, the PI should contact the subrecipient, to quickly address any potential problems. In addition to reviewing documents, the PI may monitor the progress of the subaward by initiating regularly scheduled conference calls and periodic or random site visits. Award changes affecting the subrecipient that require monitoring or management should be promptly communicated to the College’s Grants Officer, RFCUNY’s Project Administrator, and RFCUNY's Compliance Manager.

Project Administrator (PA)

PAs are responsible for assisting PIs in discharging their monitoring responsibilities, reviewing invoices from subrecipients, and questioning expenditures, if necessary. PAs are also responsible for encumbering funds that will be paid under a subaward and confirming that the costs are allowable under the sponsored project.

Compliance Manager

The Compliance Manager has primary oversight responsibility for ensuring subrecipients complete an annual certification which discloses any audit findings. The Compliance Manager may also be involved in the follow-up of subrecipient audit findings, where necessary, including but not limited to, participation in site visits designed to check the integrity of a subrecipient’s financial controls.

RFCUNY's CFO or Deputy CFO

When audit findings exist, or other compliance concerns are identified through the certification process, the CFO or the Deputy CFO makes a management decision to determine if additional monitoring is required or other action is necessary. This includes reviewing the sufficiency of the subrecipient’s corrective action plan and steps taken by the subrecipient to implement the plan. When a management decision is made, the Finance department works with Grants & Contracts to appropriately document the situation and notify the subrecipient. If it is determined that the subrecipient’s non-compliance with sponsor requirements is so serious and that the risk of continuing the subaward so high, Finance will notify the Office of Legal Affairs and request termination of the subaward.

Grants & Contracts

Grants & Contracts provides further training, monitoring and guidance in interpreting applicable regulations and subrecipient award terms and conditions, and in interpreting and executing these guidelines.

Subrecipient Monitoring

Pre Subaward Submission

If a PI plans to include another institution in an upcoming proposal to undertake the responsibility for a substantive portion of the programmatic effort, a number of documents should be obtained from the subrecipient institution and submitted to RFCUNY’s Office of Legal Affairs. These documents include but are not limited to:

  • Subrecipient Commitment Form (Contract Manager only);
  • Statement of Work; and
  • Budget

Risk Assessment

RFCUNY may enter into a subaward with an entity not on the government’s exclusion list (refer to www.sam.gov for the full exclusion listing). For organizations other than another university, college or university-affiliated hospital, such as small businesses, non-profits or clinics with whom CUNY has not conducted business, RFCUNY will determine the capabilities and adequacy of the subrecipient’s financial and management systems as prescribed by OMB’s Uniform Guidance.

As part of the assessment process, the subrecipient is required to complete a Subrecipient Profile Questionnaire, which allows the Compliance Manager to identify potential risks. The risk assessment takes into account several factors including the following:

  • Whether the subrecipient is subject to an audit or other federal financial review;
  • The degree of external oversight by auditors or sponsor agencies;
  • Evidence of effective financial controls within the subrecipient’s systems and administrative operations;
  • The size of the subaward compared to the total award;
  • The amount of the subaward;
  • RFCUNY and CUNY’s prior experience with the subrecipient;
  • Type of subrecipient organization (private/government, foreign/domestic).

Subrecipients that expend $750,000 or more of federal funds during the fiscal year are required to file audited financial statements with a Schedule of Expenditures of Federal Awards (SEFA) no later than nine months after their fiscal year end. The Compliance Manager reviews all subrecipient statements for the presence of audit findings. If financial statements have not been received from the subrecipient, the Compliance Manager may use the Federal Audit Clearinghouse (FAC) database (https://harvester.census.gov/facdissem/SearchA133.aspx) to find the statements and complete the review.

If the Compliance Manager identifies risks that should be managed during the subaward, a risk mitigation strategy will be developed in consultation with the applicable PI, Grants Officer and Grants & Contracts. In the event that the parties are unable to agree on a risk mitigation strategy, it may be determined that the applicable subaward agreement should be terminated. In such cases, the Compliance Manager will instruct the Office of Legal Affairs to terminate the subaward. In this instance, the PI should notify the subrecipient and, if necessary, identify a new subrecipient to conduct the work described in the notice of award or contract.

Authorization & Establishment of Subaward

Following receipt of an award notice and Legal Affairs staff ensuring the prospective subrecipient is not on the government’s exclusion list, certain steps will be taken by the Office of Legal Affairs and Grants & Contracts to authorize and establish the subaward. Appendix B describes these actions.

Post-Award Subrecipient Monitoring

RFCUNY relies on PIs to be the primary control point for allowability, allocability and reasonableness of research expenses. The PI is responsible for monitoring the activities of subrecipients to ensure that awarded funds are used for authorized purposes and performance goals are achieved. The PI should report any material problems with respect to any subaward to the Grants Officer and Project Administrator.

Performance Monitoring & Site Visits

Review of technical performance reports should be done by the PI on a timely basis. Any unusual or unforeseen items should be investigated and documentation retained in the PI's files for ready access by regulators. 

In some cases, the subaward scope of work and/or budget may require specific deliverables in addition to, or in lieu of, technical reports. The PI is responsible for monitoring the subrecipient’s advancement. The PI may receive informal progress reports via phone conversations or e- mail communications. Site visits are a discretionary monitoring procedure, but are recommended to evaluate the subrecipient’s compliance with the scientific objectives of the sponsored project and the appropriateness of the subrecipient’s administration of the subaward. The frequency of site visits will depend on the risk associated with the subaward, level of complexity, and scope of work. Site visits should be documented in writing and retained.

Invoices

The PI will review all subrecipient invoices and compare them to the subaward budget. The requirements for reviewing and authorizing invoices are described in Appendix C.

Annual Monitoring

Annually, the Compliance Manager takes the following actions with respect to each subrecipient:

  • Send an audit certification Letter
    • To each non-federal entity - All subrecipients where RFCUNY, on behalf of CUNY, is the prime awardee will be sent an Audit Certification Letter requiring a copy of their most recent audited financial statements and supplementary information on federal awards programs. Any reportable conditions or qualifications relating to the subrecipient’s internal controls, non-compliance with laws and regulations, or other reportable audit findings that may affect the award must be included therein.
    • If the subrecipient falls below the $750,000 threshold - it will still be required to provide a copy of its latest annual financial report, including audited financial statements and auditor’s management letter.
    • Follow up - The Compliance Manager will follow up in a timely fashion with any subrecipients that do not provide the required information. In the event that the subrecipient fails to respond, or provide a corrective action plan, subsequent invoices from subrecipient should not be paid.
  • Update the Subaward Log – to record receipt of a subrecipient’s Certification Letter. A risk assessment will be based on any findings and, if applicable, a corrective action plan. Corrective action plans cited by the subrecipient should be verified to ensure subrecipient compliance and may necessitate on-site monitoring. In certain instances non-compliance may be so serious, the findings so egregious, or the risk of continuing so high, that the subaward will be terminated. Where necessary, the CFO and Deputy CFO will assist the Compliance Manager in her determination.
  • Site Visits – Audits may be conducted of subrecipients who are deemed high risk by the Compliance Manager.

Closeout of Subawards

The Grants & Contracts department, in collaboration with the PI, will begin subaward closeout actions immediately following conclusion of the subaward period of performance. Subawards should be formally closed out within 60 days of the end of the award period, unless an extension was approved by sponsor. The requirements for closeout are described in detail in Appendix D.

Subrecipient Record Retention

Per federal regulation, subrecipient documentation must be retained for a period of three years from the date of the final expenditure report. Records for real property and equipment acquired with federal funds must be retained for three years after final disposition.

Essential Forms

Contracts & Agreements