Subaward vs Contract and Subrecipient Monitoring Presented by

Subaward vs. Contract and Subrecipient Monitoring Presented by: Office of Assessment, Audit, and Management Subaward vs. Contract and Subrecipient Monitoring

Reference Terms Let’s start with the common terms used to define Subawards, Contracts and Subrecipient Monitoring. $ Subaward Subrecipient $ Recipient Award Goods and Services Procurement Contract Source: Uniform Guidance (2 CFR 200) Subaward vs. Contract and Subrecipient Monitoring 2

Subaward “Subaward means 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 passthrough 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. ” Uniform Guidance (2 CFR 200) $ $ Award Recipient Subaward vs. Contract and Subrecipient Monitoring $ Subaward $ Subrecipient 3

Contract “Contract means 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. ” Uniform Guidance (2 CFR 200. 92) $ Property or Services Subaward vs. Contract and Subrecipient Monitoring 4

Federal Government Monitoring Responsibility • It is important to correctly distinguish between a subaward and a procurement contract because the compliance requirements are different. • The grant manager is responsible for confirming the recipient’s determination is in compliance with the definitions in 2 CFR 200. Subaward? Contract? • Concurrence is an essential monitoring activity because the prime recipient’s reporting and monitoring requirements differ for subawards compared to procurement contracts. Subaward vs. Contract and Subrecipient Monitoring 5

Two Yes/No Questions • Guidance has been published on how to make and confirm the distinction between a sub-award and a contract. • Two simple questions can help identify a subaward or procurement contract. • Confirm by reviewing the Checklist to Determine Subrecipient or Contractor Classification. Found on the Training and Technical Assistance page at OJP. gov. Subaward vs. Contract and Subrecipient Monitoring Subaward? Contract? 6

Question 1 - Substance 1. Are the activities listed in the Subaward or contract document consistent with the activities listed in the published solicitation document? Solicitation Document NO Contract YES Go to question #2 Subaward or Contract Document Subaward vs. Contract and Subrecipient Monitoring 7

Question 2 - Eligibility 2. Does the affiliate of the recipient meet the eligibility requirements listed in the solicitation? Affiliate Eligibility? Subaward vs. Contract and Subrecipient Monitoring NO Contract YES Subaward Solicitation 8

Recap – Subaward vs. Contract YES $ Question 1 Question 2 Subaward NO Either Question 1 or 2 Subaward vs. Contract and Subrecipient Monitoring Procurement Contract NOTE: More complex cases should be discussed with your supervisor and may require consultation with the Office of General Counsel and the Office of Audit, Assessment and Management. 9

Subaward vs. Contract – Checklist Subaward vs. Contract and Subrecipient Monitoring 10

Subaward vs. Contract – Additional Resources OJP Web page - Subawards and Procurement Contracts under OJP Awards https: //ojp. gov/training/subawards-procurement. htm Checklist to Determine Subrecipient or Contractor Classification https: //ojp. gov/training/pdfs/Subrecipient-Procure-cklist-B. pdf Subawards under OJP Awards and Procurement Contracts under Awards: A Toolkit for OJP Recipients https: //ojp. gov/training/pdfs/Subaward-Procure-Toolkit-D. pdf Subaward vs. Contract and Subrecipient Monitoring 11

Monitoring Prime Recipients' Subaward Management Now that we have covered the process to classify subawards and procurement contracts, we will now focus on the grant manager’s responsibilities for monitoring award recipients with subawards. Grant Manager $ $ Recipient Subrecipient Period of Performance Subaward vs. Contract and Subrecipient Monitoring 12

Federal Grant Monitoring Structure Standard Progress Reports Financial Reports (SF 425) Standard monitoring procedures for required progress reports and quarterly financial reports (SF-425). Subaward vs. Contract and Subrecipient Monitoring Risk-Based Site Visits Desk Reviews Risk-based, in-depth monitoring through site visits or enhanced programmatic desk reviews. 13

Assessment of Recipient’s Monitoring Structure Does the recipient have: • Written policies and procedures? • Procedures to identify risks (programmatic & financial)? • Reporting structure (progress & financial)? • Reporting structure to roll up? • Monitoring plan based on the risk assessment? • Process to address issues found in monitoring (Sanctions & penalties)? Grant Manager $ Recipient Subaward vs. Contract and Subrecipient Monitoring 14

Federal Grant Manager’s Role Q Keep them on schedule A Respond to Questions Relationship Help with plan Grant Manager Subaward vs. Contract and Subrecipient Monitoring 15

Federal Grant Manager’s Role (continued) Subaward vs. Contract and Subrecipient Monitoring Adequate Subrecipient Files Risk Assessment Authorized by the Federal Government Compliance with FFATA Adequate Financial Systems Review of financial and programmatic reports 16

Site Visit Checklist Questions 13. Does the grantee have established, written procedures related to its subrecipient award process specifically related to the following areas: pre-award; post-award monitoring; and closeout? 14. Does the grantee have a risk assessment of all subawards in place for the current year? 15. Is there documentation to show that the grantee is conducting monitoring activities on their subrecipients? 16. Is the grantee maintaining subrecipient files with all applicable documents? 17. Does the grantee have federal authorization for entering into subawards with its subrecipients? 18. A) If this award was made after October 1, 2010, the award amount is more than $25, 000, and the grantee awarded sub-grants in excess of $25, 000, did the grantee file as required through the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS)? B) If yes, are you able to validate the data they reported? Subaward vs. Contract and Subrecipient Monitoring 17

Resources • Uniform Guidance 2 CFR 200 • OJP Subawards toolkit for OJP recipients • Checklist to determine sub-recipient or contractor classification • DOJ Grants Financial Guide Subaward vs. Contract and Subrecipient Monitoring 18

Subaward vs. Contract and Subrecipient Monitoring Thank You Subaward vs. Contract and Subrecipient Monitoring 19