Subrecipient Entities
Subrecipient Entities
A subrecipient is an entity that receives funds from Purdue via a subcontract or subgrant For example, if Purdue receives an award from National Science Foundation and subcontracts a portion of the research to University of Arizona, Purdue is the Prime Institution and University of Arizona is the subrecipient of the Federal dollars. State of Indiana funds
A-133 requires Purdue provide each subrecipient information as listed in Attachment C. This includes CFDA number and title, project title, award number and name of the subrecipient entity. State of Indiana funds
For A-133, subrecipients for the year are identified by including all expenditures in Federal funds 41XXXXXX and also 42XXXXXX, State of Indiana funds with Federal flow-down, for the current reporting year using subcontract object codes:
533220, SUBCONTRACT PAYMENTS LE $25,000
533225, SUBCONTRACT PAYMENTS GT $25,000
533240, MGMT CONTRACT, SPS ONLY
These are identified on the Schedule of Federal Expenditures and also identified in an Excel spreadsheet for the Daily Systems Clerk. The Daily Systems Clerk compares the spreadsheet with the entities in the database and adds new ones along with contact information.
Monitoring of these subrecipient entities is required and should be adequate to ensure that Federal monies are used for authorized purposes in compliance with laws, regulations and provisions of contract or grant agreements and that they meet performance goals.
In April of each year, a letter and certification form are sent to each subrecipient entity that is governmental or not for profit. The definition of a subrecipient versus a for-profit entity is listed below:
Subrecipent:
Determine who is eligible to receive what Federal assistance.
Have responsibility for programmatic decision making.
Use Federal funds to carry out a program.
For-Profit Vendor:
Provide goods and services within normal business operations.
Provide similar goods or services to different purchasers (other customers).
Operate in a competitive environment.
Are not subject to compliance requirements of the Federal program.
See Attachment C (letter) and Attachment C-1 (form) for examples of the documents sent to each subrecipient. A spreadsheet is maintained by the Daily Systems Clerk indicating when the forms were mailed and received. As forms are received, the spreadsheet is updated to reflect the date received. A review is made of the form to determine how it was completed, and if it was returned complete and with the necessary documentation as indicated on the form.
If the first box on the form is completed indicating their A-133 is complete and no instances of non-compliance were noted, the form is filed in the files.
If the 2nd box is completed indicating that their A-133 report is complete and there were findings. The form is routed along with their audit report and letter of findings and corrective action to the Associate Director of SPA for further review to determine if there is risk to the Purdue project(s).
If the form indicates that the entity’s audit is not yet complete, a follow up date is determined (usually provided on the form) and the Daily Systems Clerk follows up after that date to obtain the certification and necessary documentation.
If the entity indicates that they are not subject to the provisions of OMB Circular A-133, a further designation on the form is needed to indicate whether they expend more or less than $500,000 and whether they are a “for-profit” entity.
If the entity indicates they are for-profit, the form is filed in the files.
If the entity indicates they expend less than $500,000 annually in Federal funds, the entity’s financial report along with the form are sent to the Associate Director of SPA for further review. The Daily Systems Clerk insures that a financial report is provided. If one has not been provided, follow up is made and logged in the spreadsheet as incomplete until received.
Foreign sponsors outside the U.S. are not subject to A-133, but sometimes pose the high risk.
The Associate Director reviews the financial report to insure no issues are identified that would impose a risk to Purdue. If the Federal versus non-Federal activity is not separately identified, the Associate Director may contact the entity and request further breakdown. The financial statements are reviewed to determine the overall level of expenditure activity and what percentage applies to Purdue. The lesser the percentage of Purdue activity determines a lesser risk. If an audit report is provided, the Director reviews the report for findings and assesses the impact to Purdue and the project(s). If the findings are determined to have impact to Purdue, the Director will contact the subrecipient entity using the contact information on the certification form to request more information and clarification regarding the finding and will further pursue impact to Purdue and a resolution to the issues. This dialog and investigation notes are recorded on the certification form. Most issues are resolved by obtaining additional information, but it may be necessary to pursue additional audit actions such as additional follow up on questions regarding the financial report, request copies of supporting documentation, limited scope or program specific audits and on-site testing of the entity’s records.
When the form is returned to the Daily Systems Clerk, the Associate Director will have signed and dated if OK. This documentation is maintained in the file for history purposes.
Throughout the life cycle of a project, monitoring is also on-going to insure the work is completed as intended. Before payment is made to subrecipient entities, the invoice voucher that would authorize payment, is sent to the Principal Investigator via the departmental Business Office to review and insure that the work performed by the subrecipient was satisfactory and the deliverables were met. The PI should sign the invoice voucher in the Material Received OK section. The invoice voucher is not processed until this process is complete. If the PI expresses concern regarding the work, the issue is handled by the Assistant and Associate Director working with the subrecipient entity. Payment is withheld until the PI and SPS staff have ensured the work was completed satisfactorily and funds were used for authorized purposes and that the deliverables have been met.
Roles and Responsibilities - Subrecipient Monitoring:
Daily Systems Clerk: Distributes letter and form to subrecipent entities. Monitors receipt and ensures completed certification forms are given to the Associate Director for review. Maintains accurate and complete files for historical purposes.
Daily Systems Administrator: Follows up with Daily Systems Clerk to insure process is proceeding according to the schedule. Assists with follow-up on outstanding forms.
Developer: Generates the file to upload to A-133 database which identifies subrecipient entities. This is the same source used to produce the A-133 schedule of expenditures.
Associate Director: Reviews audit or financial records of subrecipient entities and determines the level of follow up necessary. If no followup is needed, the Director approves by signing the certification form.
Account Manager: Reviews expenditures versus budget and insures all invoice vouchers are submitted to the Principal Investigator for review and approval prior to payment.
Principal Investigator: Reviews the invoice voucher to insure that the work performed by the subrecipient was satisfactory and the deliverables were met. Please note: The Business Office can assist with obtaining approval from the PI, but should never sign the invoice voucher. This approval can only be given by the PI or someone with direct knowledge of the activity on the project.