Subrecipient Policy

POLICY NO: 6108
EFFECTIVE DATE: 11-24-08

Basis of the Policy

The University of Nebraska Medical Center (UNMC) recognizes its responsibility to act as a good steward of public funds. Therefore as a component of that stewardship, it is the policy of UNMC to comply with federal regulations (OMB Circulars A-110 & A-133) pertaining to grants and contracts involving federal funds.

Purpose of the Policy

As a condition of its acceptance of funding from sponsors, UNMC is obligated in its role as primary recipient to undertake certain stewardship activities as well as to comply with federal, state and local regulations. When UNMC assigns responsibility for conducting a portion of the work sponsored by an award to a subrecipient, UNMC remains responsible to the sponsor for both the management of funds and the meeting of performance goals. The purpose of this policy is to detail how UNMC will comply with these obligations

Note: This policy does not include agreements for vendors, including items such as: consulting services or purchase orders for equipment, materials or other services, as explained below.

Explanation of Key Concepts

• When UNMC receives a federal award, UNMC is considered the primary recipient (or “prime”) of the federal funds and the subrecipient is the organization that receives the subcontract from UNMC.
• A subrecipient is a legal entity and is generally a university or non-profit organization.
• The relationship established by the subrecipient agreement (also called subcontract agreement, or subgrant, or subaward) is between UNMC and the subrecipient.
• As an example, when UNMC subcontracts part of a federal award to another university, UNMC remains fully responsible for the entire federal award.
• There is usually a legal contract between UNMC and the subrecipient.
• A subcontract creates no direct contractual relationship between the subrecipient and the awarding agency.
• For example, if UNMC subcontracts part of an NIH award to another university, there is no contractual relationship between NIH and the other university.

Explanation of Vendors:

Determination of whether the relationship is that of a subrecipient or a vendor is critical. OMB Circulars A-133 and A-110 contain definitions of vendor and subrecipient. In summary:

• Vendors generally supply goods and services that are necessary to the completion of a project but are not part of a cooperative programmatic effort.
• Vendors supply essential services or products to a program as a routine part of their daily business and are not subject to OMB Circular A-133 or the compliance requirements of the award terms and conditions.

Policy

It is the policy of UNMC to comply with federal regulations regarding subrecipient monitoring, when UNMC is the prime recipient of a federal award or contract. The following are the key compliance requirements:

• Federal agencies clearly hold prime recipients responsible for establishing monitoring systems and controls to give reasonable assurance that subrecipients are in compliance with federal policies.
• This means that when UNMC subcontracts part of a federal award to another organization, UNMC remains fully responsible to the federal government for the entire award (since UNMC is the “Prime”).
• Properly executed subcontract agreements protect both UNMC and the subrecipient institutions by making clear the subrecipient’s responsibilities.
• The subcontracting agreement lays the groundwork for the collaborative arrangement between UNMC and the other organizations. A well-structured and inclusive contract is required.
• Clear understandings of the respective roles and compliance with the terms and conditions of the award by Principal Investigators at both institutions are vital to the success of the project.
• The monitoring of technical and financial activities associated with a subrecipient is an integral part of UNMC’s stewardship of sponsor funds.
• The specific systems and controls adopted by UNMC for establishing and monitoring subrecipients are found in the UNMC Subrecipient Monitoring Procedures that explain all of the monitoring roles and responsibilities for:

Principal Investigators

Sponsored Programs Administration

Sponsored Program Accounting

Department Administrators

Refer to the Subrecipient Monitoring Procedures for specific obligations and guidance.

Additional Information

• UNMC Subrecipient Monitoring Procedures
• OMB Circular A-133, Audits of States, Local Government, and Non-Profit Organizations (June 2003)
• OMB Circular A-133, Compliance Supplement (March 2007)
• OMB Circular A-110, Uniform Administrative Requirements for Grants and Agreements with Institutions of Higher Education, Hospitals and Other Non-Profit Organizations (September 1999)
• OMB Circular A-21, Cost Principles for Higher Education (May 2004)
  
  

Any questions about this policy should be referred to Financial Compliance and Cost Analysis.

Subrecipient Monitoring Procedures

This is a new UNMC policy.

This page updated on Tuesday, December 3, 2008, by dkp.

Last Review by Policy Owner: November 13, 2008.