The Administration of Subrecipient Agreements Rural Counties Task Force Maura Twomey Diane Eidam July 14, 2017       Introduction. As an MPO, SACOG is mandated by Federal and State governments to develop regional plans for transportation, growth management, air quality and other issues of regional significance. Work governed by the terms of the Master Fund Transfer Agreement and applicable state and federal regulations. Documented annually in the OWP. Often elements of work in the OWP performed by partner agencies. In such instances, SACOG is considered a “pass-through entity” and its partner agencies are known as subrecipients. 1

Administration of Subrecipient Agreements Overview Definitions Code of Federal Regulations Subrecipient Monitoring Reasonable, allocable & allowable costs Local Match Requirements A Pass-through entity is defined as a non-Federal entity that provides a Federal award to a Subrecipient to carry out a Federal program. A Subrecipient is a non-Federal entity that expends Federal grant awards or State funds received from a pass-through entity to carry out a Federal or State program. The Subrecipient is subject to the same Federal and State regulations as the pass-through entity. 2

Administration of Subrecipient Agreements Definitions: Pass-through entity Subrecipient A Pass-through entity is defined as a non-Federal entity that provides a Federal award to a Subrecipient to carry out a Federal program. A Subrecipient is a non-Federal entity that expends Federal grant awards or State funds received from a pass-through entity to carry out a Federal or State program. The Subrecipient is subject to the same Federal and State regulations as the pass-through entity. 2

Administration of Subrecipient Agreements Code of Federal Regulations, Title 2, Chapter 2, Part 200.331 Requires that the Pass-through entity monitor the activities of the subrecipient as necessary to ensure that the award is used for authorized purposes, in compliance with Federal statutes and agreement terms and that the performance goals are achieved.5 million As a Pass-through entity, a local agency is required to comply with the Code of Federal Regulations, Title 2, Chapter 2, Part 200.331, which details the responsibilities of a Pass-through entity. 3

Administration of Subrecipient Agreements Effective monitoring of Subrecipient agreements begins with an effective grant proposal and selection process: Clear & detailed description of project Project goals & objectives Description of regional significance Scope of work, timeline & budget How project addresses emphasis areas, priority areas & planning factors Effective monitoring of Subrecipient agreements begins before the grant is awarded. Whether through an agreement with regional partners or through a competitive process, it is critical that the proposed grant be clearly documented so that the Pass-through Entity understands the project scope, budget, timeline and deliverables. Without a detailed Application, it is difficult to effectively administer and monitor subrecipient agreements. The Grant Application becomes the basis for the OWP Work Element and the Continuing Cooperative Agreement. Application for Consolidated Planning Grant Funds (see handout) 4

Administration of Subrecipient Agreements Continuing Cooperative Agreement Master Agreement between local agency & Subrecipient Documents the terms of agreement between agencies Improves accountability Supplements document actual grant budget, timeline & deliverables A Continuing Cooperative Agreement is used to document the overall grant requirements and responsibilities of the local agency and a Subrecipient. Includes applicable State and Federal requirements. The CCA is a master agreement between the local agency and the Subrecipient. A formal Supplement is executed for specific grant awards, documenting the budget, timeline and deliverables. Intent of CCA and Supplement is to improve accountability by documenting the applicable State and Federal requirements, as well as the agreement between the agencies. 5

Administration of Subrecipient Agreements Overall Work Program (OWP) The Annual OWP is part of an agreement with Caltrans which includes the Master Fund Transfer Agreement. The OWP establishes the terms & conditions for the expenditure of State and Federal funds. The Annual OWP establishes the terms & conditions for the expenditure of State and Federal funds by the agency. Grant Awards to Subrecipients are documented in the OWP. 6

Administration of Subrecipient Agreements Local Agency Project Manager Responsibilities Review Progress Reports to ensure project work is adequate and on schedule Review Invoices to ensure that costs are eligible and within budget Ensure appropriate supporting documentation is submitted Approve payments to Subrecipients The agency will designate a Project Manager for every Subrecipient grant. The primary role of the Project Manager is to ensure that the Subrecipient completes the project in compliance with the terms of the Continuing Cooperative Agreement. Ensures that work performed meets standards, that deliverables are on schedule and that costs reimbursed are eligible and within budget. It is also the responsibility of the Project Manager to manage the grant to ensure that all administrative requirements are met, including OWP and CCA amendments as appropriate. 72

Administration of Subrecipient Agreements A critical element of Subrecipient monitoring is the completion of a Risk Assessment, which evaluates: Financial stability Quality of management systems Historical performance Past audits and/or reviews As a pass-through entity, the local agency is required, in accordance with 2 CFR Part 200.331 to evaluate each Subrecipient’s risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward. The Risk Assessment is not an audit, but a review of past performance and financial information to determine the Subrecipient’s risk of noncompliance. The results of the Risk Assessment guide the agency in the development of appropriate monitoring for Subrecipient grants. 8

Administration of Subrecipient Agreements Invoice Review Requirements Confirm invoice format & support documentation Review invoice and related Progress Report for consistency Review invoice amount with project budget Review invoice to determine that it reflects reasonable & allowable costs 9

Administration of Subrecipient Agreements Determining Reasonable, Allowable & Allocable Costs Code of Federal Regulations, Title 2, Part 200, Subpart E Indirect Cost Allocation Plan 10

Administration of Subrecipient Agreements Accounting for Local Match Annual Plan & Budget that includes a description and source of match Subrecipient must complete and submit a local match certification prior to reimbursement All in-kind contributions and valuation methods must be documented. 11

Administration of Subrecipient Agreements Questions??? 12